Quiz 10: Europe, Africa, and the Middle East
Definition of various terms including multinational market regions, Free trade area (FTA), customs union, common market, political union, Maastricht Treaty, Single European Act, European Parliament, and Amsterdam Treaty are given below: Multinational market regions: It refers to the group of countries who reduce their trade and tariff barriers in order gain economic profit. European Union (EU), NAFTA, and ASEAN are few examples of multinational market regions. Free trade area (FTA): It refers to a trade alliance where the participating countries seek to reduce the trade barriers between themselves. In FTA, the participating countries sign a free trade agreement. For example, NAFTA is one the largest free trade area across the globe. Customs union: It refers to a trade alliance where the member countries reduce/eliminate the trade barriers for their mutual trade. However, unlike FTA, in customs union, a common external tariff is charged from the countries who are not the member of the customs union. Common market: It refers to an agreement made by different countries for removing all the trade barriers among them. In common market, the member countries can avail free flow of capital, services, as well as manpower. Political union: A state which is comprised of different smaller states would be termed as a political union. The political unions are governed by a joint government. Maastricht Treaty: This treaty was prepared for creating a union having common set of economic and monetary policies. This treaty was prepared to integrate the European economy in 1992. Single European Act: This Act was prepared in 1992 for the establishment of a single market in the European community. In this act, the Treaty of Rome was revised for the first time. European Parliament: It refers to the parliament of European Union that performs various legislation functions. Currently the parliament is comprised of 751 members. Amsterdam Treaty: By this treaty, the member states transferred some of the power of national government to the European Parliament. The powers that were transferred to the European Parliament include civil law, criminal law, immigration law, etc.
Global market stands for the market that exists around the world crossing the borders. The organizations today have widened their horizon and have entered foreign markets to undertake business activities and this as has given the world a global market and globally accepted goods and services to choose from. Multinational Market Region stands for the group of the countries that have reduced trade and tariff barriers to gain mutual economic benefit. The problems of multinational market groups poses are that it leads to globalization which is not that easy to harness; it calls for the creation of political union parties that pose threats in the future; and sometimes this type of business agreements pressurizes global competition and other countries unwillingly has to become a part of it. While, the benefits of multinational market groups are that it provides for the cooperation between the groups of economies, creates platform for free trade area, introduces customs union, establishes common market, and favors political union. These together provides for effective multinational market region.
Global market stands for the market that exists around the world crossing the borders. The organizations today have widened their horizon and have entered foreign markets to undertake business activities and this as has given the world a global market and globally accepted goods and services to choose from. Multinational Market Region stands for the group of the countries that have reduced trade and tariff barriers to gain mutual economic benefit. The political role of multinational market groups could be explained by stating that countries being a part of the multinational market region have to follow and abide by the rules and regulations that are framed for the countries being a part of the multinational unions. There exists a complete integration of political and economic policies which is also called as unification that is created between states using non-tariff restrictions. The integration of trade takes place when there is a provision for multinational market for countries being a part of it. This kind of unification of countries creates a roadmap for the political ups and downs of the market regions of the multinational markets.