Regional Integration PAGE 6
The Role of Regional Integration in Promoting Global Business
Greg Kear University of Phoenix MGT 448 April 5, 2007
The Role of Regional Integration in Promoting Global BusinessIntroductionOne would think that John Sweeney, as a life-long unionist and current president of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), would be opposed to the concept of globalization. In fact, he sees globalization as inevitable, although, "in its current form, globalization cannot be sustained. Democratic societies will not support it. Authoritarian leaders will fear to impose it". (Sweeney among the Globalists, November 2000) His view is that globalization needs to be rethought and reshaped to manifest more values than the freedom of capital in order "to make the global system safe for decent societies" (ibid.).Sweeney might be right on all counts, particularly as applied to Southeast Asia. Initially ambivalent to toward regional integration and with issues of trust, member nations of the Association of Southeast Asian Nations (ASEAN) have been careful in their implementation (Munakata, 2002, p.1). This paper will offer an analysis of the role of regional integration of Southeast Asia in the promotion of global business by examining the advantages and disadvantages of regional integration, comparing the economic development stages of countries within the region, and examining the ramifications of the region's economic development for global business.Advantages and Disadvantages of Regional IntegrationIdeally, regional integration should increase efficiencies through competition and lower and reduce variation of prices across the region. Reality, however, often falls short of this ideal. Even in Europe where there has been a sustained effort and high impetus for regional integration, neither of which are evident in ASEAN, it took the adoption of a common currency for the costs of automobiles to begin to normalize from county to country. (Hill, 2005, p.268)Some of the other benefits of the preferential trading agreements that are negotiated within regional blocs like ASEAN are the liberalization of services (including financial), investment, protection of intellectual property rights, better labour and environmental standards, and dispute resolution.(Carstens, 2005)One of the negative aspects of regional integration is the loss of low-skilled, low paying jobs in some member countries to other member countries where labour and other costs are less expensive. It can be argued, however, that this is a short term problem and that the benefits of lower prices for the goods once produced domestically and the increased opportunities to sell raw materials, equipment, and services to the countries now manufacturing those goods realize a net benefit that offsets the loss of those jobs. (Hill, 2005, pp.272-273). ASEAN's member countries' ability to realize such benefits, however, has been very limited. As...