How is the World Connected into a Global Economy?

Global economic integration means that the world s economic activities go beyond national boundaries, making economic activities between countries and regions of the world interdependent and interrelated, forming an organic whole worldwide; or that all countries in the world participate in comprehensive economic cooperation Changes in the economic field of any of these countries will cause changes in the world economy as a whole. In the process of continuous deepening of international economic activities and continuous changes in international markets, the influence of transnational corporations is very large. At present, it is almost impossible to find a company among the world's top 500 companies that produces and sells domestically, almost all of which are super enterprises with global branches. The annual sales and annual output of these large companies can almost be compared with the annual gross national product of a small country or even a middle country. And these large companies are further adjusting their business direction and organizational structure in order to seek their own development, hoping to build themselves into a company with international division of labor within the organization. On the other hand, the development of information technology and its extensive application in the economic field have provided a material and technological basis for world economic integration. In particular, the development of Internet technology has provided great convenience for enterprises of all countries to carry out global information communication and operations. ^[1]

global economic integration

In the region of this multinational economic union, goods, capital and services can flow freely without any

Depending on the specific conditions and conditions of the participating countries and their target requirements, there are

	Mutual trade preferences	Free trade among member states	Common external tariff	Free flow of factors of production	Coordination of economic policies	Unified economic policy
Preferential tariff zone
Free trade zone
Customs Union
Common market
Economic union
Complete economic integration

Establishment of the European Union

time	event
May 9, 1950	Proposed joint planning of coal and steel resource supply in European countries; established the strategic goal of creating a "European Union".
May 1951	The European Coal and Steel Community (ECSC) is established.
May 27, 1952	Signed the "European Defense Union Treaty", which was not adopted in France.
March 25, 1957	Signed the Treaty of the European Economic Community and the Treaty of the European Atomic Energy, collectively referred to as the Rome Treaty.
January 1, 1958	The European Economic Community was formally established.
January 1, 1959	Reduce tariffs by 10% for the first time.
January 30, 1962	The common agricultural policy takes effect.
July 1, 1967	The European Coal and Steel Alliance, the European Economic Community and the European Atomic Energy Commission are integrated.
July 1, 1968	The Customs Union came into effect, abolished the circulation of industrial products within the European Union, and formulated a common external tariff.
July 29, 1968	Free circulation of labor within the EU.
March 1972	The creation of a "snake in a hole" exchange rate system has reduced the currency fluctuation of countries to 2.25%.
January 1973	Denmark, the United Kingdom and Ireland joined the European Economic Community, expanding the community to nine countries.
February 28, 1975	Signed the Lom Convention and established links with 44 African, Caribbean and Pacific countries.
April 3, 1978	Signed a Trade Agreement with China.
1978	The European Coal and Steel Consortium, the European Economic Community and the European Atomic Energy Commission form the European Community (EC).
March 13, 1979	The Aju system replaced the currency serpentine floating system; the European Monetary Unit (Aju) became the European unit of account.
January 1, 1981	Greece joins the European Community.
January 1, 1986	Spain and Portugal join the European Community.
February 1986	Signing of the Single European Act.
July 1, 1987	The "Single European Act" came into force, providing for voting-weighted voting rules in the European Commission and no longer applying the principle of consensus.
July 1, 1990	Capital flows were liberalized, and the first phase of the Economic and Monetary Union was implemented.
February 7, 1992	Treaty of Maastricht
January 1, 1993	The European Community achieves a single large market.
November 1, 1993	The "Mayo" came into effect, and the European Community was renamed the European Union (EU).
January 1, 1994	The second phase of the Economic and Monetary Union begins; the European Monetary Authority is established.
January 1, 1995	Austria, Sweden and Finland join the European Union.
December 1995	The third phase of determining the European single currency started on January 1, 1999. The name of the currency is "Euro".
June 1997	Sign the Stability and Growth Pact and the Second Exchange Rate Mechanism.
June 1998	The European Central Bank is established.
January 1999	The birth of the euro
January 15, 2000	Ready to accept Bulgaria, Romania, Slovenia, Latvia, Lithuania and Malta as members of the European Union.
January 2, 2001	Greece became the 12th member of the Eurozone.
January 1, 2002	The euro began to circulate.
December 13, 2002	The European Union Copenhagen Conference decided to accept Poland, Hungary, Czech Republic, Slovakia, Latvia, Slovenia, Estonia, Cyprus, Lithuania and Malta as official EU members before May 1, 2004.

(I) Historical Evolution of the European Union

Events of European Economic Integration

global economic integration

(2) Eastern Expansion of the European Union and European Integration

The EU's eastward expansion plan has gone through three stages:

Preparatory stage (first half of the 1990s). It is mainly to sign agreements with associated countries (also known as the European Agreement) with Central and Eastern European countries, to develop accession standards and to implement advance preparation strategies. Poland and Hungary in 1991, the Czech Republic, Slovakia, Romania and Bulgaria in 1993, the Baltic States in 1995, and Slovenia each signed an Association of Countries Agreement with the European Union in 1996. The Associated Countries Agreement legally defines the political and economic relations between the EU and the associated countries, with the aim of gradually integrating the associated countries into the community. The objective of the associated country agreement is to achieve free trade in industrial products by 2002 and lay the foundation for economic cooperation in other sectors.

global economic integration

Formulate the timetable for the negotiation of accession. In 1995, the Madrid Summit proposed that negotiations on accession should begin six months after the end of the intergovernmental meeting. The proposal was endorsed by the Florence Summit in 1996. At the June 1997 meeting in Amsterdam, the leaders instructed the Council to review the comments of the European Commission on applicant countries, which will be launched in July. The European Commission published the 2000 Agenda in July 1997. The agenda is divided into three parts, namely the prospects of Community policy, the EU's fiscal framework from 2000 to 2006, and the EU's eastward expansion. In the "Agenda 2000", the European Commission believes that according to Copenhagen standards, the EU should first accept Poland, Hungary, the Czech Republic, Slovenia, Estonia and Cyprus as member states. In December 1997, the Luxembourg summit of the European Union approved the European Commission's proposal and decided to first enter into negotiations with the above-mentioned six countries. The remaining five countries, namely Slovakia, Romania, Bulgaria, Lithuania, and Latvia, will be subject to their progress. set. The meeting also rejected Turkey's candidacy.

Formal accession negotiation stage. March 12, 1998. The European Conference was held in London. EU member states and heads of government applying for EU membership attended the meeting. Turkey refused to attend. The European Congress is a forum for participants to discuss common foreign and security policies, judicial and internal affairs, and economic cooperation, and is designed to complement the EU's eastward expansion process. On March 30, the foreign ministers of the EU countries and the first six foreign ministers of Central and Eastern Europe gathered in Brussels to officially begin the negotiation process for joining the Union. After the Kosovo War, the EU obviously accelerated the pace of eastward expansion and at the same time decided to adjust its eastward expansion strategy. At the EU Helsinki Summit in December 1999, the European Union announced that it would begin negotiations with the six new candidate countries in 2000, namely Slovakia, Romania, Bulgaria, Lithuania, Latvia and Malta, and announced that Turkey would be a candidate for membership. Qualifications, but will not negotiate with them for the time being. On February 14, 2000, the Council of Foreign Ministers of the European Union formally began negotiations on joining the six new countries. In mid-December 2002, the Copenhagen Summit of the European Union decided to officially accept 10 countries including Poland, Hungary, Czech Republic, Slovenia, Estonia, Cyprus, Slovakia, Lithuania, Latvia and Malta on May 1, 2004. , Bulgaria's accession time and Turkey's accession negotiations have made relatively clear provisions. During the EU Athens Informal Summit on April 16, 2003, 15 EU member states signed the accession treaty with the above 10 applicants.

Eastward expansion is one of the major events at the turn of the century in the European Union. It will not only have a profound impact on the future development of the European Union, but also have a significant impact on the global political and economic structure. When the European Community was established, it had already expressed its desire to expand integration throughout Europe. The first sentence of the "Roman Treaty" is: "Determining to lay the foundation for an ever-increasing alliance between European peoples and peoples" and "Determining joint action to eliminate the obstacles that divide Europe and ensure the economic and social progress of its country. That is to say, the EU will eventually become the spokesperson for European integration. However, within the EU, national and national borders cannot disappear for a long period of time. Outside the EU s unification, there are other interest groups. External imbalances and inconsistencies also affect internal equilibrium. These have determined that after the eastward expansion, the EU's integration road will not be smooth.

(3) The impact of the EU on the world economy and its development prospects

The establishment of the European Union has a profound impact on the development of the world economy. On the one hand, it has a "gathering effect". Today it not only attracts the participation of many countries in Western Europe, but also many transitional countries in Central and Eastern Europe. From an economic point of view, this is mainly because of the customs union effect we introduced earlier. From a political point of view, the political influence of the EU in international affairs is far beyond the reach of individual member states. On the other hand, it has a "diffusion effect". This does not require that all countries are exactly the same as the EU, but from the perspective of integration economics, free trade at different levels and in different scopes will achieve different levels of trade creation, trade transfer, economies of scale, and investment stimulus. The establishment of the European Union is beneficial to the economic development of Europe, but it may have a very adverse impact on the exports and direct or indirect investment of goods and services of non-member countries to EU countries. In addition, due to the adjustment of production caused by the free flow of production factors and commodities within the European Union, the redistribution of the interests of various groups will also occur, which will cause some enterprises and individuals to suffer losses. However, in the long run, trade between the EU and non-member countries will likely expand with the strengthening of its economic strength, and it will also take favorable measures internally to regulate the distribution of benefits. It can be predicted that with the development of the EU's economic and political integration, the EU will continue to strengthen its economy and play an increasing role in international affairs, and will continue to move towards the establishment of a Great European Free Trade Area.

NAFTA

(A) the generation process of NAFTA

On January 1, 1989, the two countries signed the Canada-US FreeTrade Agreement. In 1990, Mexico formally proposed to hold negotiations on the North American Free Trade Agreement. After 14 months of intensive negotiations, the foreign trade ministers of the United States, Canada and Mexico finally reached the North American Free Trade Agreement on August 12, 1992. From January 1, 1994, a regional economic integration organization that more closely linked the economies of the United States, Canada, and Mexico was finally officially born.

(2) Contents of the North American Free Trade Agreement

Reduce and eliminate tariffs

Open financial insurance market

Relax restrictions on foreign investment

Fair bidding

Protection of intellectual property

(3) Evaluation of NAFTA

First of all, the North American Free Trade Area has enhanced regional cooperation, and the most prominent performance is the relief of the Mexican financial crisis that erupted at the end of 1994. Secondly, the NAFTA has promoted the expansion of trade and investment in the three countries. With the gradual elimination of tariff and non-tariff barriers of member states, the scale of free trade zones has been expanding, and the proportion of intra-regional trade in total trade of member states has increased. Finally, the NAFTA has facilitated the adjustment of agricultural policies in the three countries.

APEC

The Asia-Pacific Economic Cooperation (APEC) has 21 member countries and regions, including: China, Japan, South Korea, Chinese Taipei, Hong Kong, China, Thailand, Vietnam, Brunei, Indonesia, Malaysia, Singapore, Philippines, Australia, New Zealand , Papua New Guinea, United States, Canada, Mexico, Russia, Chile, Peru. In terms of scale, it is the world's largest regional economic integration organization.

global economic integration

(A) the emergence and development of Asia-Pacific Economic Cooperation

(1) Exploration stage (1989 ~ 1992). It is the stage where APEC seeks its own development direction, path and way. In this phase, in addition to the APEC inaugural meeting, the second ministerial conference held in Singapore in November 1990, the third ministerial conference held in Seoul in November 1991, and the first ministerial conference held in Bangkok in November 1992 Four ministerial meetings. (2) Development stage (1993-1996). During this period, the number of APEC members has continued to increase, and Mexico, Papua New Guinea, and Chile have been accepted as new members, increasing the number of APEC members from 15 to 18. Committees, working groups, expert groups, and various professional ministerial meetings, ministerial meetings, and informal leaders' meetings; APEC's action plan was approved and implemented. (3) Adjustment stage (1997 ~ present). The outbreak of the Asian financial crisis has triggered various contradictions within APEC. Some of the original internal flaws have been exposed, trade and investment liberalization has stalled, and economic and technological cooperation has lacked substantial action. As the differences among member states on many major issues are difficult to resolve, the centrifugal tendency within APEC has intensified, and countries have begun to question the effectiveness of APEC. Faced with these new situations, APEC can only continuously adjust to ensure that the organization can operate normally.

global economic integration

(II) Evaluation of the Asia-Pacific Economic Cooperation

The Asia-Pacific Economic Cooperation has gone through nearly 15 years since its establishment. Through the joint efforts of member states, APEC has made great progress, especially in recent years, progress has been rapid and smooth. It has made great achievements in promoting member countries 'trade and investment liberalization and economic cooperation, especially in implementing unilateral action plans, which has made members' trade dependence in the region increasingly increasing.

However, due to the inherent characteristics of the APEC: its diverse members, complex structural characteristics, and non-mechanical and non-binding operating characteristics, the role of the APEC has been limited. First of all, among the world regional economic integration organizations so far, APEC can be said to have the largest number of members, but the level of economic development of its members is very different. Secondly, APEC does not have a fixed organization. Its own operations mainly rely on meetings and consultations. It follows WTO rules and lacks a systematic foundation. APEC emphasizes non-bindingness. Any proposal for trade and investment liberalization and economic and technological cooperation comes from various members. The implementation of these plans also depends on the voluntary actions of individual member states. Finally, APEC has a complex structure of "small organizations in large organizations". Generally speaking, regional economic integration organizations have a single organizational structure, and there is no sub-organization under a unified organization. However, due to the diversity of cultures, religions, nationalities, etc., and differences in political systems with different values or ideologies, there are also "small groups" consisting of several members under the APEC, namely subregional economic integration organizations. The main ones are: ASEAN Free Trade Area, North American Free Trade Area, and Australia-New Zealand Free Trade Area, etc., and the "10 + 1" (China-ASEAN Free Trade Area), "10 + 3" (China, Japan, South Korea, and ASEAN) being implemented. Free Trade Area) and possible East Asian Free Trade Area in the future.

Construction of ASEAN Free Trade Area

(1) ASEAN

Association of Southeast Asian Nations, referred to as Association of Southeast Asian Nations (ASEAN), its predecessor was the Association of Southeast Asian Nations established in Bangkok on July 31, 1961 in Malaysia. In August 1967, the Ministers of Foreign Affairs of Indonesia, Malaysia, the Philippines, Singapore and Thailand held a meeting in Bangkok, officially announcing the establishment of the Association of Southeast Asian Nations, thereby replacing the original Southeast Asian Union and shifting from previous military alliances to economic cooperation. In this way, the Association of Southeast Asian Nations has transformed into a sub-regional economic cooperation organization. Since then, Brunei (1984), Vietnam (1995), Laos and Myanmar (1997), and Cambodia (1999) have successively joined ASEAN. At present, the ASEAN member countries include: Philippines, Malaysia, Thailand, Singapore, Brunei, Indonesia, Vietnam, Myanmar, Laos and Cambodia.

(2) ASEAN Free Trade Area

In October 2003, at the ASEAN and China, Japan, and South Korea leaders' meeting held in Bali, Indonesia, ASEAN issued the historic Bali Declaration, which states that 10 member states are determined to establish ASEAN in 2020 Economic Community. By then, ASEAN will not only be a single market and production base. Goods, services, investments and funds will flow freely in this region, but also be integrated in various areas such as politics, economy and security. At the same time, leaders of China, Japan and South Korea signed the Joint Declaration on Promoting Tripartite Cooperation between China, Japan and South Korea, which established the basic framework for promoting economic cooperation in Northeast Asia. China's formal accession to the Treaty of Amity and Cooperation in Southeast Asia has taken an important step towards establishing China-ASEAN free trade.

(3) China-ASEAN Free Trade Area

Facing the tidal wave of regional integration around the world, East Asian countries are catching up. Among them, the most noticeable move was the establishment of the China-ASEAN Free Trade Agreement (CAFTA) within 10 years announced at the ASEAN-China Summit in late 2001.

The "China-ASEAN Free Trade Area" concept was first put forward at the Fourth China-ASEAN Leaders' Meeting held in Singapore in 2000. In March 2001, the two sides formally established a joint expert group to study the feasibility of free trade zones, economic effects and the impact of China's accession to the WTO. The expert group believes that the trade structure between China and ASEAN is highly complementary, and the trade volume of both sides accounts for a small proportion of their respective foreign trade volume, indicating that the trade potential between the two sides is great; if a free trade area is established, Will have a greater trade creation effect, benefiting both sides. Since then, the two sides have conducted a series of consultations. At the Fifth China-ASEAN Leaders' Meeting in Brunei in November 2001, the two sides formally reached an agreement to establish a "China-ASEAN Free Trade Area" within 10 years. Immediately afterwards, the two sides signed the China-ASEAN Comprehensive Economic Cooperation Framework Agreement in Phnom Penh, Cambodia, on November 4, 2002, which confirmed the basic structure of the China-ASEAN Free Trade Area. According to the agreement, the free trade zone will include trade in goods, trade in services, investment and economic cooperation, among which negotiations on trade in goods will begin in early 2003 and end before June 30, 2004; negotiations on trade in services and investment will be Beginning in 2003 and ending as soon as possible; in economic cooperation, the two sides agreed to focus on agriculture, information and communication technology, human resource development, investment promotion, and development of the Mekong River Basin, and gradually expand to other areas. On this basis, from October 1, 2003, China and Thailand began to implement a zero-tariff agreement on vegetables and fruits. In addition, starting from January 1, 2004, the "early harvest" program under the general framework of the China-ASEAN Free Trade Area has been implemented, and grain, dairy, egg, and beverage products will take the lead in reducing tariffs; from January 1, 2005 From now on, including steel, machinery parts, cotton fabrics, fertilizers, chemicals, etc. will begin to reduce tariffs.