chapter  2
18 Pages

An Approach to Industrial Integration

ByElias T. Ghantus

This chapter starts with a brief discussion of the factors which give rise to locational advantages, as well as of the concept of ‘equity’ in the distribution of integration benefits and costs and the criteria by which it could be established. Approaches to industrial integration may be considered as ‘alternative’, either because they are different from the classical approach which takes the form of across-the-board trade liberalisation on a regional basis, or because they are radically different from those that are being followed at present. It has already been emphasised that integration schemes among developing countries, including the Arab countries, started on the basis of trade liberalisation arrangements. The approach to industrial integration is that of the ‘integration industries’ which was introduced by the Central American Common Market. This approach rests on the idea that the member-countries encourage and promote the establishment of new industries, and the specialisation and expansion of existing industries.