Question
We live in a globalized world, where international imports and exports play an important role in the world economy. This is why business alliances play
We live in a globalized world, where international imports and exports play an important role in the world economy. This is why business alliances play a fundamental role in business worldwide. A commercial alliance is a union between two or more countries to jointly develop some business cooperation, considering a long-term period of time. In a sense, it is a way of sharing risks and strengths. There are important alliances around the world that have been significant for the activation of the international economy. During the course of this writing, we will be presenting the purpose, advantages, and disadvantages of treaties and examples of these in America, Europe, and Asia. Free Trade Agreements (FTA) are international, regional, or continental associations between two or more countries that decide to trade reciprocally in the most open way possible, without tariffs, trade barriers, or other obstacles that could limit the flow of goods. and services between their territories. The purpose of the treaties is to eliminate trade barriers and facilitate the transit between borders of goods and services, promote fair trade, increase investment opportunities, protect intellectual property, provide conflict resolution and provide opportunities to improve the benefits of this agreement.
The treaty covers a variety of areas, such as market access, rules governing the origin of goods, customs procedures, energy, agriculture, and measures to be taken in case of emergencies. Therefore, expanding participation in international trade will increase the productivity and competitiveness of each country's economy and ensure the sustainability of its economic growth. Currently, some of the main trade alliances in the world are NAFTA (North American Free Trade Agreement) or NAFTA (North American Free Trade Agreement), which entered into effect in 1994, and includes agreements between the United States, Canada, and Mexico. CAFTA (Central American Free Trade Agreement), includes agreements between Central American countries and the Dominican Republic. We can mention that some of the advantages or strengths that companies or countries have when establishing alliances with other countries are: it generates codependency, the nations that trade freely come to depend on one another and strengthen commercial and diplomatic ties, thus going against the appearance of wars; it promotes comparative advantage, that is, countries tend to specialize in goods that are more efficient in producing and exporting, thus being able to import goods in which they are not as efficient at a good relative price. This would mean an improvement in the country's quality of life; it does not distort trade, it allows the emergence of international trade dynamics free of tariffs and other mechanisms that interfere with its natural dynamics; it allows regional growth, it enriches the regions that trade freely with each other, as opposed to the ordinary international market.
As disadvantages or weaknesses, we can mention: the lack of freedom of action depending on the constant consensus of the parties that are part of the agreement, the absence of a shared vision of the business, use of confidential information that leads to mistrust between the parties and poor management of a partner can harm the perception of the brand in the company's customers. There have been cases where alliances between countries have not come to fruition or have even caused huge losses. As threats or risks exist in alliances between countries, we can mention cultural factors, repercussions for the environment, public health, social rights, and labor standards. Being aware that we are not going to be able to control these factors, the fact of opting for an appropriate negotiation model is key, in addition to reflecting all the advances in the appropriate documents and contracts. ASEAN Free Trade Agreement (AFTA) and all related import and export forms. The Association of Southeast Asian Nations (ASEAN) is made up of 10 member countries in Southeast Asia. The association was originally established in 1967 by Thailand, Indonesia, the Philippines, Singapore, and Malaysia. Brunei, Vietnam, Laos, Myanmar, and Cambodia joined ASEAN in the 1990s. ASEAN's goal is to strengthen economic, political, and social cooperation among all member countries. At first, the region also wanted to protect itself from communism at the height of the Cold War.
As a result of these conflicts, ASEAN has had to deepen its relationship with each other in order to adapt to the changes taking place around the world. All heads of state meet annually to discuss important issues in the region and address potential problems. In the 2000s, it established free trade agreements with member countries China, India, South Korea, Australia, New Zealand, and Japan. Today, ASEAN has a combined GDP of $3 trillion, making it the seventh largest economy and growing steadily. With a population of 650 million, it has the third largest workforce in the world, after China and India. ASEAN countries are also rapidly embracing online consumption, making it attractive to Western markets. Each country has unique advantages in exports, and services, and also has a large number of economic free zones. The following is the list of ASEAN member states (as of 2021 Vietnam, Laos, Myanmar, Cambodia, Thailand, Brunei, Indonesia, Malaysia, Philippines, Singapore What is the ASEAN Free Trade Agreement (AFTA)? AFTA stands for ASEAN Free Trade Agreement and it is an initiative and a trade agreement between all the countries that belong to this organization to further build and develop the ASEAN economy. Since the young, tech-savvy population has a working knowledge of how Asia works, there is a need to harness capabilities and strengths to benefit the entire region. AFTA's vision is to improve economic prospects, follow best regulatory practices, facilitate smooth trade, and increase the likelihood of foreign investment through agreements that help reduce tariffs and facilitate business.
AFTA benefits both consumers and manufacturers in the ASEAN region. Lower trade tariffs mean consumers have more purchasing power and can enjoy more market choices as the market becomes more competitive. On the other hand, manufacturers can enjoy lower tariffs, which means they can purchase raw materials or production inputs more competitively. They will also have the ability to import and export goods to other ASEAN countries at lower prices compared to countries in other regions. In terms of shipping and trade, FTAs ultimately reduce trade barriers between member countries, promoting healthy competition and ease of doing business. The integration of the economy and the multiplication of the labor force could create a win-win situation for all stakeholders in the ASEAN region. Who are ASEAN's dialogue partners? ASEAN member states can be viewed as a single economic bloc, similar in concept to the United States. Economic blocs also facilitate trade with other countries.
The move attracted larger economies and allowed each country to trade with ASEAN as a larger community. Dialogue partners are countries with which ASEAN countries have trade agreements. ASEAN dialogue partners are Australia, New Zealand, China, Japan, South Korea, and India. The ASEAN Trade in Goods Agreement (ATIGA) eliminates more than 99.65% of import duties on intra-ASEAN trade. To apply for these rates, certain forms must be submitted. Shippers can visit their country's trade department and customs authorities for more information. There are other types of ways to facilitate trade between ASEAN and its dialogue partners. Below are all known AFTA forms available. How to benefit from the AFTA agreement? Specific to AFTA and under the Rules of Origin, the origin of a product must be determined in order to reduce or eliminate import tariffs. There are two categories: 1. Some are produced in ASEAN countries (or dialogue partners), but certain conditions are met. 2. Entirely produced in ASEAN countries (or dialogue partner countries). As part of the processing of the export declaration, the shipper will request a Certificate of Origin from the local customs authority or the respective government agency. This certificate of origin will be delivered to the recipient along with other shipping documents. Importers will submit the appropriate AFTA forms and shipping documents for duty exemption. Therefore, it is important to understand and determine the origin of the load. The ASEAN Trade in Goods Agreement (ATIGA) is an excellent way to reduce or, in some cases, completely eliminate import taxes on trade between ASEAN countries and their dialogue partners or on trade within ASEAN.
The European Union is an international organization of 27 European countries that manage common economic, social, and security policies. Its objective is to contribute to the economic expansion of the countries and to the financial stability of the member countries. It is defined as a formal agreement between two or more European countries, that is, it is a formal agreement between two or more European countries. The objective of the European Treaty is to establish and maintain peace and security in Europe. The European Union is an example of the success of the current European Convention. As the number of member states increased from six to 28, subsequent treaties agreed on new areas of cooperation aimed at improving the functioning of the institutions of the European Union. For example, the agricultural policy was introduced in the European Union Treaty. The Nice Treaty on the European economy and the institutional framework for reform. The treaty requires member states to eliminate or modify important national laws and regulations. In particular, he radically reformed tariff and trade policy, eliminating all internal tariffs in July 1968. It also requires governments to remove domestic regulations that favor domestic industries and to cooperate in areas where they have traditionally acted independently, such as international trade. The treaty calls for common rules on anticompetitive and monopolistic conduct and common standards for land transportation and regulation. The treaty recognizes that social policy is an essential part of economic integration, and also establishes the European Social Fund, which aims to increase employment opportunities by promoting the geographical and occupational mobility of workers.
The European Treaty is beneficial because it prevents war, promotes democracy, protects human rights, and encourages economic cooperation. Disadvantages of European treaties include the potential for abuse of power, the risk of being drawn into the conflict, and the possibility of a loss of sovereignty. European agreements could also plunge countries into conflict. Furthermore, European treaties could mean that some countries lose their sovereignty. The Treaty of Lisbon, Nice, and Maastricht are three examples of modern treaties that are considered examples of European treaties. The ratification of the Lisbon Treaty is a significant step more democratic, efficient, and open. The Treaty of Nice is an agreement that updates the Maastricht Treaty and brings significant changes to its operation. The Maastricht treaty, also known as the Treaty of the European Union, created three main components. These are a common foreign and security policy, deeper cooperation on home affairs and justice, and the European Community. When the signatories accepted the treaty, the European Economic Community became the European Community. This acted as the cornerstone of what was to become a prosperous European Union. The treaty gives broader authority to the community in several areas. This includes better policies for consumer protection, public health, education, and environmental protection. In addition, the treaty promotes development cooperation, social cohesion, and technological and economic research.
The European Union was created to provide long-term benefits in the form of economic growth. In the short term, its purpose is to meet the welfare needs of member states. The European Union and its treaties focus on The Union; both were created to promote human rights, democracy, equality, the rule of law, freedom, and human dignity. Both the EU and its treaties have legislative and legal value and serve to provide a borderless, secure, and fair environment for members. With this treatise, we can see that what seems to be beneficial in general, others see as not very good. In the agricultural case, the countries that oppose the agreement are affected because their products would not be consumed and the Union would be acquiring them from elsewhere, affecting the economy of those countries whose products are not purchased and are part of the European Union. Now, NAFTA is made up of the United States, Canada, and Mexico. Its purpose is able to expand exports among the affiliated countries, which in turn sought to achieve safer and broader access to the market in order to create a more favorable environment for the growth of the economy in the participating countries. This went hand in hand with regulations that the participating countries had to comply with. In the case of Mexico, minimum conditions were required for free trade, in the same way on January 1, 1994, the United States eliminated 80% of the taxes on Mexican exports and specific products. This was of great benefit to Mexico since they could export their products to affiliated countries immediately.
This gave rise to the export of vehicles, cattle, gas stoves, and other products to the United States. In the case of Canada, Mexico exported computer equipment, television parts, and beer, among other products. It should be noted that Mexico kept making other treaties with various countries, including Colombia and Venezuela, with the plan of expanding its commercial and economic ties, seeking to improve its economic processes and prepare for what would be the 21st century. It should be noted that Canada had the same regulations, objectives, and benefits as Mexico. Other treaties of America are: CAFTA-DR This free trade agreement is between the countries of Central America (Guatemala, El Salvador, Honduras, Costa Rica, Nicaragua, and the Dominican Republic) and the United States, which was carried out in the period from January 2003 to January 2004, being in July 2004 that the Dominican Republic was included, hence the DR-CAFTA insignia. Except for Costa Rica, the rest of the affiliated countries have ratified it. This treaty groups five important issues which are: institutional issues and administration of the treaty, trade in goods, trade in services and investment, public procurement of goods and services, and non-commercial issues, which are based on labor standards and environmental standards. MERCOSUR Composed of the countries: Argentina, Paraguay, Brazil, Uruguay, Peru, Colombia, Venezuela, Guyana, Chile, Ecuador, and Suriname. Beginning on March 26, 1991, Mercosur seeks to promote the free movement of services and goods among affiliated countries and eliminate tariff restrictions on the movement of goods. On the other hand, they sought coordination of macroeconomic policies in the sectors of agriculture, foreign trade, industrial zones, transport, and communications. This is in order to present conditions of equality for all the countries that compose it.
It is important to highlight that all these treaties have the same goal as a goal, which is to maintain their regulations so that in this way they have control and order, seeking that all countries benefit in one way or another. On the other hand, many of these countries hold non-treaty negotiations with different countries around the world. In conclusion, we can say that the treaties can open markets, eliminate barriers to exports and investments, promote internal reforms, and increase industrial competitiveness and also the productivity of the economy. However, we cannot ignore that an alliance is something very serious, it can lead the company or a country to improve its performance and value, or it can plunge her into more serious problems than the ones she wanted to solve through her. It must be clear that an alliance is successful to the extent that the allies add value, for the clients and for the respective shareholders.
Self-reflection on the work. You can take into consideration aspects such as mastery of the subject, deepening it, organization, clarity in expressing ideas, disposition, etc.
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