Regional trade is the trade that involves two or more countries that happen to hail from the neighboring location or geographical pattern. Trade as an economic activity is very vital in providing essential needs required improving the standards of life.
Trade is a catalyst for regional integration. Regional trade helps in the integration of the countries that trade with each other. Trade is based on international specialization and co-production as well as the consolidation of economic relations between states and business entities. The countries that do trade with one another tend to promote integration amongst each other. The citizens of those respective countries are free to travel to those other countries without much scrutiny and complications in the name of enforcing integration. Integration is an objective law of the development of international economic relations. One notable thing is that those countries which have integrated and even formed a strong union are more prosperous. Countries like England, Wales, Scotland and Northern Ireland, which form the United Kingdom, are more prosperous than other countries in Europe which are autonomous. Many investors opt to invest in these societies because the markets and conditions provided by the governments involved are favorable. On the other hand, some countries which have isolated themselves from integrating with others, either regionally or internationally, perform poorly economic wise. For example, Morocco, which is not a member of the African Union tends to be underperforming because it is not maximizing its potential like it could, were it part of the . Another example is Taiwan a country which has no connections to any existing union .the country suffers economically because many countries including her neighbors do not recognize .
There is availability of resources. Whenever many counties, both regionally and internationally, trade, the goods, services, and ideas become more diversified, cheaper, and of higher quality. First, different countries provide different products; agricultural products, mechanical, and tertiary. This makes the market diversified and complementary because one can find different products from those that are in their countries. Even in situations where they produce the same goods, one can choose those that are of higher quality and cheaper. On the idea part, regional trade provides a platform where different producers, manufacturers, and other investors can share different ideas on how best to improve the quality of their products. This provides a market where there is a healthy competition which is very essential for the rapid growth of those respective countries and the region at large.
Regional trade promotes peace. Whenever more than two countries unite for a common cause, the results are better compared to when these countries . Most countries suffer from insecurity especially in the modern society where the crimes committed by criminals are international. They affect the country involved directly and those that are not involved indirectly. The most common modern crimes that are faced in all countries are terrorism and money laundering. For instance, when a country like Germany becomes a victim of terrorism, the pain is felt by a person in Kenya which is miles away and also by a person in France who is her immediate neighbor. This is because nowadays the world is a global village and one is in a position to find hundreds of dozens of both Kenyans and French citizens in Germany. This shows how insecurity affects the countries jointly regardless of their geographical pattern. It is for this reason that when the U.S decided to confront the Islamic State(ISIS) in both Syria and Iraq decide to ask for military help from all countries whether neighbors or not because the human race at large was in danger. Without the support from other countries regionally and internationally, the U.S could not deal with ISIS easily and completely. It is, therefore, evident and unquestionable that regional trade, which in turn translates to regional co-operation is very beneficial to the administration of peace in the region and the globe.
Regional trade helps in the reduction of trade tariffs and other market unfriendly barriers and conditions. The regional trade also helps in the establishment of a common, single market that is regulated by strong institutions that will foresee the increase in market capacity thus leading to regional development. The institutions that are established as a result are charged with the responsibility of enacting laws and regulations that discourage cartels and other unscrupulous parties in the market. This creates an environment where the markets maximize their profits and development occurs because the market is devoid of conmen.
There is eradication of poverty. Regional trade helps in the reduction of the existing gap between the poor and the rich. This is noticeable especially in Africa and South American part of the continent where many people live below poverty line. When there is massive trade among states in the region. This group of people who are mainly referred to as small scale farmers stand to gain because they are mainly the producers and at the same time the source of labor. When there is demand for their products in the regional market, they gain maximum profits from selling their products to their governments and other regional governments though their governments. In the long run they manage to alleviate themselves from abject poverty and can now improve their living standards .This helps in avoiding many societal conflicts which come forth as a result of conflict between the bourgeoisie and the proletariat.
There is creation of jobs .The regional trade organization such as the TPP is very pivotal in creation of jobs in the signatory states. This is because many types of businesses will arise from different sectors of the economy. Sectors such as agriculture will see many people especially the youth being involved both directly and indirectly .Other sectors which will create jobs for the citizens of those countries include the technology sector. This is one very essential field in terms of creating jobs especially in these modern times.
The other important positive impact caused by regional trade such as the TPP, is the creation of strong alliance that will be able to offer stiff competition to other existing alliances. This will discourage any chance of any other alliance becoming dominant and dictatorial thus giving other treaties democratic space to conduct their activities independently.
There is improvement in infrastructure. Infrastructure is another field that is affected positively by regional trade practiced by respective countries. This is very necessary because for goods and services to be transported from one country to the other in an effective manner, systems have to be put in place. Systems in this case happen to be good roads, railway line systems, airports, ferries and waterways. This is very true because many countries that know the importance of good infrastructures have invested hugely in this sector. In Europe where we have the European Union, there exists an efficient railway system that can transport goods and services from England up to Russia so are the airport systems. It is for this same reason that even countries classified under third world countries are spending beyond their means to improve their infrastructures. For example Kenya a developing country can afford to spend billions of dollars which happens to be a loan in the construction of an effective standard gauge railway linking it to her neighbors namely South Sudan and Uganda.
For the benefit of all countries involved and those wanting to join investment treaties such as the Trans-Pacific Partnership (TPP) have been formed to bring countries in those regions that are interested in working together towards a common goal and vision. Members who fall under the treaty involve themselves in signing treaties that are vital in fostering the growth and development of the region in trade. This includes increasing the volumes of trade so as to meet the demands and needs of people in that region. Such kind of treaties and partnerships help a region to pull itself in unison. Countries that have progressed well economic-wise such as the United States are in a position to help the less progressed countries such as Vietnam.
Just like any other cliché, every good thing has its bad side. Regional trade is not spared from this too. There are many other negative consequences that emanate from both regional and international trade. One notable consequence is the death of smaller businesses. When many businesses are consumed by the craze of going regional or international, the major victims of this craze happens to be the small businesses. This is because they lack the adequate funds that are needed in the production o large number of goods some of them are consumed by the bigger businesses while others are eventually closed because they cannot cope with the pressure and competition brought by their partners. When this happens, the smaller businesses collapse leading to unemployment. This is very wrong because the respective governments ought to have provided fair conditions for competition. This could be done by allocating different slots to businesses respectively based on their ability to produce when exporting their products. This will help in the retention of small companies that have a brighter future ahead of them.
Rise in cases of insecurity. This is brought up by the opening of borders by respective countries when conducting trade with each other. As the society becomes more capitalistic where everyone is only interested in money, other aspects of the society such as security become compromised. Many criminals, terrorists and money launderers take advantage of this situation and travel across the region committing their crimes. Crime becomes like order of the day because citizens in those regions can travel from one country to another without much scrutiny. This is what is happening in Europe with the European Union. The recent terror attacks in France, Belgium and Germany to name but a few are orchestrated by people from neighboring countries who happen to cross the borders with ease because they are all part of the European Union. It is for this reason that Countries such as England have chosen to withdraw from the European Union because it does not want her national security to be compromised.
Expensive cost of conducting trade. This is evident in most regional trade organizations such as the European Union (EU), African Union (AU) and the Trans-Pacific Partnership (TPP).This is because the countries that are members of those partnerships have different financial capabilities. For instance in the EU, the financial capability of Germany differ a lot with that of Malta, in the AU ,South Africa’s capability differs with that of Somalia and so is U.S.A’s to that of Vietnam in the TPP. What this means is that some member countries will at some point be joy riders because they will have to be supported financially once in a while by those other capable countries. This cripples the economies of those said capable countries because they cannot be able to sustain their independent economies and those of the organizations that they subscribe to. Internationally, the developed nations such as U.S.A, China, Germany and the U.K find themselves funding other nations and missions through initiatives such as the UKAID and the USAID at the expense of their citizens. This triggers reactions and criticism from the citizens of those donor countries because they feel that those monies spent overseas in helping other countries should be spent in improving their lives because they are the tax payers.
Trade is less effective. This happens because when more than two countries are involved in trade, there are bureaucracies that need to be observed. This complicates the situations further when dealing with an entire organization made of many countries. The protocols make it hard or trade to be conducted in a timely manner.
Isolation of non-members. Counties which do not belong to trade organizations n their region feel left out. For example countries like Taiwan and Morocco in their respective regions feel unwanted and cannot rely on the support of their neighbors unless the goodwill of a few. This compromises their economies because they limited partners to trade with. There is also creation of trade barriers to non-members.
There is the feeling of loss of sovereignty by some countries. Some countries tend to lose their autonomy whenever they enter into some organizations or trade pacts. This is because the bigger and influential countries tend to overlook their counterparts when making decisions. The smaller countries because they do not have the numbers due to under representation and financial muscles have to subscribe to those rules regardless of how punitive they are.
There is loss of values brought by integration. This is a topic that has brought a lot of heat especially in Europe. The natives of the European countries feel that their values and cultures are being invaded by foreigners in the name of regional and international integration. The feel that these foreigners come with their beliefs which are totally different from theirs instead of them adapting to what they find in countries they immigrate to. This creates tensions and panic because of conflicting interests. The natives especially from those well performing countries argue that the immigrant who come to their countries courtesy of regional co-operation and trade take up all their jobs and are left with none thus leading to unemployment. This is the reason why there have been many demonstrations across Europe because there are people and leaders who hold divergent opinions. For example the German Chancellor Angela Merkel faces opposition from majority of German leaders. This was also experienced in England during the stay or exit campaigns where Britons chose to exit EU because of the issue of immigrants. This cost the former Prime Minister David Cameron his job because he strongly advocated for the equal and fair treatment of Immigrants an opinion which was not shared by many.
There is exploitation of the developing countries by the developed countries. This is where the big countries take away natural resources from the developing countries so as to get the raw materials needed for their industries. This was common in both the colonial and the immediate years of the post colonial era. Even in the present times, this exploitation still happens only that those countries downplay it.
A notable blunder made by the governments of the members’ states of TPP is failing to create public awareness. Many critics believe that TPP’S main agenda was not to economically empower the signatory states economically but to keep China an emergent force at bay. To prevent it from making the big strides that it has managed to make so far. The voters of those nations feel that the negotiations were made secretly and the governments are seeking to bring in sweeping changes without their knowledge.
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