Trade or investment? location decisions under regional integration

This paper studies the production and trade patterns that may arise between two different countries if plant location is introduced as a first step in the producers' decision making. A three-stage game is used: the first deals with location and the next two with capacity and final sales decisions. Demand and cost structures differ by country, and the latter contain specific elements related to the foreign operation. The structure of possible Nash-equilibria is examined and an analysis of the changes in the solution, if the countries engage in an integration process, is made. As in previous models, though global welfare gains may not be very high, single country ones may be considerable, due to changes in the location of the plants. However, even if full integration takes place, global Marshallian welfare may decrease. Conditions which determine a tendency towards multinationalisation are obtained. Assuming a move toward integration, conditions are also provided to characterize when exporting will be preferred to local production. The fact that producers may retain a certain discriminating power, notwithstanding the elimination of barriers to arbitrage, creates a tendency to locate production in the country where prices are higher. This explains why welfare gains may not be obvious. An empirical illustration, with real data from two MERCOSUL countries (Brazil and Argentina) illustrates the possible outcomes.

The Impact of Domestic Politics and International Changes on the Brazilian Perception of Regional Integration

This article aims to analyze the impact of domestic politics and international changes that influence Brazilian positions regarding regional integration processes in South America, particularly the Southern Common Market, Mercosur. The dynamics of the international system and their impact on the evolution of the elite's perception of the role the country should play in the world are important variables for understanding these positions. The state's postures in relation to integration were and are based on a real interest, but this interest is also linked with the objective of ensuring better conditions for participation in other international arenas. Starting with the hypothesis that transformations in the international setting have strongly influenced Brazil's positioning, the elements of continuity and change in the country's behavior toward Mercosur are identified, with domestic politics as the main explanation.

UNASUR: insfrastructure for regional integration

Includes bibliography

Regional integration in the Caribbean assessing the impact of CSME on CARICOM's poorest member state

Includes bibliography

Regional integration and public policy. Evaluation of the European experience and possible implications for Latin American integration

Includes bibliography

Regional integration and the issue of choosing an appropriate exchange-rate regime in Latin America

Includes bibliography

Regional integration in Latin America and dynamic gains from macroeconomic cooperation

Includes bibliography

Options for regional integration

Includes bibliography

Regional integration in the 1990s

The renewed interest sparked by the potential for intraregional cooperation in Latin America and the Caribbean today has been reflected in numerous agreements regarding trade preferences and in attempts to establish free trade areas, customs unions or common markets. The possibility has even been discussed of setting up free trade arrangements on a hemispheric scale. This plethora of proposals inevitably raises a great many questions. What is the reason for this renewed interest? Are the differences between the schemes of today and those of the 1960s and 1970s significant enough to avert the obstacles and difficulties encountered by those earlier schemes? What are the most suitable mechanisms and instruments for promoting intra-Latin American integration? What are the defining characteristics of the various categories of integration initiatives, such as free trade areas, customs unions and common markets? Is it feasible to set up free trade areas involving countries having very dissimilar levels of development or macroeconomic policies? Would it be wise to work towards a gradual convergence of all these initiatives into a single, regionwide scheme? And most importantly: Just how functional would integration be in terms of the development strategies and policies adopted by the individual countries of the region? The various sections of this article attempt to answer, albeit tentatively, these questions.

Regional integration and macroeconomic coordination in Latin America

Includes bibliography

Regional integration and the labour market: the Brazilian case

Includes bibliography

Regional integration and export diversification in MERCOSUR: the case of Argentina and Brazil

Includes bibliography