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5.2.2RegionaleconomicintegrationP2Inrecentyears,theintegrationofregionaleconomyhasstartedanupsurge/'?ps??d?/inthewholeworld,withthecharacteristicsofvarioustypesofintegration,whileDohaRoundhasnotdeliveredtheresults.Nationsturntoregionalismtoachievetheirtradeambition.P3asthefiguresshown,Chinahassigned14agreementsandsomeareundernegotiation。Themostinfluentialoneistheonebeltandoneroadinitiative.P4TheUnitedStatesstartedTPPandTTIP,evenafterMR.Trumpquitfromthenegotiations,hestillenhancesthelevelofNAFTAandproposesanarrangementwithJapan.Atthesametime,JapancontinuesTPPnegotiationandTPPwilltakeintoeffectinDecember30,2018.P5EUisenlargingtotheeastinlastdecadeswhiletheU.K.quitfromit.Itisbreakingnewstotheworld.Economiccooperationamongdifferentregionsbecomesthefocusoftheglobaleconomy.P6Inthischapter,weexamineeconomicintegrationingeneralandcustomsunionsinparticular.Thetheoryofeconomicintegrationreferstothecommercialpolicyofdiscriminativelyreducingoreliminatingtradebarriersonlyamongthenationsjoiningtogether.Thedegreeofeconomicintegrationrangesfrompreferentialtradearrangementstofreetradeareas,customsunions,commonmarkets,andeconomicunion.Preferentialtradearrangementsprovidelowerbarriersontradeamongparticipatingnationsthanontradewithnonmembernations.Thisistheloosestformofeconomicintegration.ThebestexampleofapreferentialtradearrangementistheBritishCommonwealthPreferenceScheme,establishedin1932bytheUnitedKingdomwithmembersandsomeformermembersoftheBritishEmpire.Afreetradeareaistheformofeconomicintegrationwhereinallbarriersareremovedontradeamongmembers,buteachnationretainsitsownbarrierstotradewithnonmembers.TheNorthAmericanFreeTradeAgreement(NAFTA)formedbytheUnitedStates,Canada,andMexicoin1993.ChinaandSouthKoreareachedfreetradeagreementin2012.Acustomsunionallowsnotariffsorotherbarriersontradeamongmembers(asinafreetradearea),andinadditionitharmonizestradepolicies(suchasthesettingofcommontariffrates)towardtherestoftheworld.Acommonmarketgoesbeyondacustomsunionbyalsoallowingthefreemovementoflaborandcapitalamongmembernations.TheEUachievedthestatusofacommonmarketatthebeginningof1993.Aneconomicuniongoesstillfurtherbyharmonizingorevenunifyingthemonetaryand?scalpoliciesofmemberstates.Thisisthemostadvancedtypeofeconomicintegration.AnexampleisBenelux,whichistheeconomicunionofBelgium,theNetherlands,andLuxembourg,formedafterWorldWarII(andnowpartoftheEU).P7Sowedrawaconclusionaboutthefeaturesofregionalarrangementsinatable.Wefind,fromfreetradeareatoeconomicunion,theintegrateddegreeofregionalarrangementsaredeepeningP8Fromcommodityfreeflowtoharmonizationofalleconomicpolicies,anationneedstogiveawaymorepolicy-makingpowertosupranational/,su?pr?'n??(?)n(?)l;,sju?-/body.Firstlyjustconcedestariff,nexttariff-makingpolicy,andthendomesticpolicyconcerningfactormovement,lastfiscalandmonetarypolicy-makingpower.Itisnecessaryforanationtoweighthegainandlossfromtheregionalarrangements.Wewilldiscussfurther.P9Becauseregionalarrangementsflourishnow,weneedtoanalyzethewelfareeffectofaregionalarrangement.Wewilltaketariffunionasexampleandillustratefromstaticeffectsanddynamiceffects.P10Thestatic,partialequilibriumeffectsofformingacustomsunionaremeasuredintermsoftradecreationandtradediversion.Whataretradecreationandtradediversion?Westartwithavideo大國崛起之德國篇:關(guān)稅同盟的形成P11Supposetherearethreenationsintheworld,Nation1andNation3areexportingnationswhileNation2istheimportingnation.DXandSXrepresentNation2’sdomesticdemandandsupplycurvesofcommodityX.Atthetariff-inclusivetime,P1X=$2P3X=1.5+1=2.5beforetheformationofthecustomsunion.Because2.5>2,soNation2importsfromNation1.Atprice2,Nation2consumes50X,with20Xproduceddomesticallyand30XimportedfromNation1.Nation2alsocollectstariffrevenue,areac+e,whichimportstimestariffrate.ThefirstsituationisthatNation2formsacustomsunionwithNation3only.Withouttariff,P3x=1.5,atthispriceNation2willconsumes60X,with15Xproduceddomesticallyand40XimportedfromNation3.P12Nowweturntothetabletoclearouttheprocessandmeasurethestaticeffectwithconsumersurplusandproducersurplus.Asshowninthefigure,wecanconcludethechangeofimportingpricewhichdeclinesafterformationofcustomsunion,domesticproductionreducingbecauseofpriceconcession,domesticconsumptionincreasingwithlowerpriceandimportingquantityexpandingcorrespondingly.Theimportsincreasedto45X.Nowwedecomposethe45X,wefind30XisdivertingfromNation1toNation3,5Xiscomingfromdecreaseofdomesticproductionand10Xfromincreaseofdomesticconsumption.P13Aftertheanalysisabove,wegetthetradecreationandtradediversion.30Xrepresentstradediversioneffectofcustomsunion.Tradediversionoccurswhenlower-costimportsfromoutsidethecustomsunionarereplacedbyhighercostimportsfromaunionmember.Thisresultsbecauseofthepreferentialtradetreatmentgiventomembernations.Tradediversion,byitself,reduceswelfarebecauseitshiftsproductionfrommoreef?cientproducersoutsidethecustomsuniontolessef?cientproducersinsidetheunion.Thus,tradediversionworsenstheinternationalallocationofresourcesandshiftsproductionawayfromcomparativeadvantage.P14Tradecreationcomesfromthereductionofdomesticproduction5Xandincreaseofdomesticconsumption10X,representingbyareaAandareaDrespectively.Becausewithlowerprice,themoreefficientproductionfromNation3replacesthelessefficientdomesticproductionandconsumersexpandtheirconsumption.P15totaleffectsofcustomsunionareshownasfollow.Tonation2,itisuncertaindependingonthecomparisonofimprovementoftradecreationanddeteriorationoftradediversion.ToNation1,itistotallybadnewandwillestablishitsowntradebloc.ToNation3,itisagoodaction.P16Supposeanothersituation,thatNation2formsacustomsunionwithNation1.Whatwillhappen?P17wewillusethesimilartabletoshowtheinfluence.P18similartotheformeranalysis,withNation1,thepriceismuchlower,importsexpandlargerandthetotaleffectispositive.P19ToNation1,itconsolidatesandexpandsitsmarketshare.ToNation3,itisstilloutsideofthemarketandperhapsitwillestablishitsowntradebloc.P20Theformationofacustomsunioncouldincreaseorreducethewelfareofmembernationsandoftherestoftheworld,dependingonthecircumstancesunderwhichittakesplace.Choosingdifferenttradingpartnertoformacustomsunionhasdifferentresult.Itbecomesaresearchtopic.Whatever,acustomsunionbenefitsconsumersandintroducescompetitiontoproducers.P21Thisisanexampleofthetheoryofthesecondbest,whichstatesthatifalltheconditionsrequiredtomaximizewelfareorreachParetooptimumcannotbesatis?ed,tryingtosatisfyasman
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