Using the sources given below, assess the advantages and disadvantages of regional economic integration.
Source F
The aim of this research has been to investigate the pertinence of the theoretical notions of normative power Europe and market power Europe in explaining the nature of the EU's promotion of regional economic integration in ASEAN. This paper has argued that both conceptualizations, taken individually, are limited in explaining the EU's practice; however, together ... they offer helpful insights of its role and action. On the one hand, a normative perspective helps understand the spread of EU's ideas and practices of regionalism. On the other hand, the market power notion explains the EU's interests which go beyond the simple promotion of regional integration and are concretised through the externalisation of its internal market's practices and instruments.
Source G
The study by Hector Calvo-Pardo, Caroline Freund, and Emanuel Ornelas, "The ASEAN Free Trade Agreement: Impact on Trade Flows and External Trade Barriers" (chapter 6 of this volume), examines the interplay in Asia among regional free trade agreements, external tariff barriers, and the volume of international trade. The emphasis is on the impact of the ASEAN Free Trade Agreement (AFTA) of 1992 on developments from 1993 to 2007. This regional pact initially comprised six Asian countries but later in the 1990s it was extended to cover four more.
Source H
Regional economic integration also comes with a number of challenges, the most important of which is to minimise negative effects on economic links with outside countries. Such effects typically occur through trade diversion, whereby a relative change in tariff barriers can divert trade from more efficient external exporters to less efficient ones. For example, should the introduction of a common external tariff by a regional bloc result in a relative increase in the import tariff for country A outside the region compared with that for country B inside the region, one would expect an increase in imports from country B and a drop in imports from country A. As a result, however, consumers must buy goods from the less efficient producer.
Concerns about trade diversion have been raised in the context of the Eurasian Customs Union. Its common tariff, which was formulated in the crisis environment of 2009, was also used in part as a tool of industrial policy to promote selected import substitution through an increase in tariffs (for example, in the case of the automotive sector). The common tariff's introduction resulted in significant changes to the import tariff structure in each constituent country, with tariff lines adjusted upwards and downwards. ...