ABSTRACT
It seems to be a universal phenomenon that, while private firms expand their activities beyond national borders and become multinational companies, individual national governments – of both developing and developed countries alike – try to attract multinational firms to start up on their home territories in order to take advantage of their technology and capital for stimulating new industries and generating production and employment. This phenomenon has not taken place uniformly across the world, but more intensively in some geographical areas than in others. It is a process called ‘regional economic integration’. The form regional integration takes ranges from the elimination of tariffs and non-tariff barriers to the harmonization of domestic regulations and policies, and even to the creation of a single currency area. Its most advanced form can be found in the European Union (EU), which has undertaken extensive integration for the past forty years, and now aims for monetary union and possibly political union sometime in the future. The North American Free Trade Agreement (NAFTA) is at a lower level of integration as it moves towards becoming a free trade area (FTA). These FTAs not only focus on the elimination of cross border measures that limit trade, but also introduce the harmonization of domestic commercial conditions to varying degrees.
