Regional integration has been around for a long time. A definition is not easily formulated. Ordinarily the term refers to the integration of a nation of states into a larger collection. Regional integration can be described on one hand, as a vital method that requires a country’s eagerness to contribute to or unite into a larger whole. The extent of which the country shares and what the country shares establishes the level of integration. The different levels of integration are dependent on a predefined criterion. The descriptions of levels are the advantages and disadvantages of regional integration and how the stage for economic development relates to a potential business opportunity.
The Advantage NAFTA
The North American Free Trade Agreement (NAFTA) is an economic, international trade treaty connecting three nations that inhabit the North American continent (Canada, Mexico, and the United States) that began in 1994. NAFTA is designed to remove various trade barriers between Canada, Mexico, and the United States as well as a reduction or elimination of numerous tariffs and nontariff barriers. NAFTA is exceptional in that it has created the foremost regional integration agreement linking two highly developed countries, the United States and Canada, and a developing country, Mexico. Export opportunities have grown under NAFTA because of the tariffs elimination in 2003.
The main advantage of NAFTA is that it is the world’s leading free trade area, connecting more 400 billion people and producing $11 trillion worth of goods and services. NAFTA has two-thirds of the United States exports entering Mexico duty-free and nearly all U.S. exports to Canada enter duty-free. Each day, just about $1.8 billion is trilateral trade between NAFTA countries. The United States manufactured exports to NAFTA partners increased 78% in the first six years. Massachusetts exports almost $1 billion more to Canada than to any other country in the world annually. Massachusetts exports nearly $3.5 billion in manufactured goods annually to Canada and Mexico (Massachusetts Export Center).
The NAFTA partnership strengthens the supply chain to and from plants in Mexico, which pushes growers and producers to meet the needs of an increasingly sophisticated world and market. An example would be the partnership of Modelo’s Corona and Anheuser-Busch, which created a mutually beneficial gateway to access both the United States and Mexico markets. Modelo’s expansion plans across North America include joint business opportunities with other industry leaders (NAFTANOW, 2008).
Modelo has invested in a high-tech malt plant in Idaho which benefits regional growth with long-term contracts. Modelo also arranged with Canadian brewery Molson to expand distribution in Canada, making Modelo’s beers more easily available in all Canadian provinces and territories. Modelo is an example of how further regional integration empowers organizations to produce quality foods and make the business stronger competitively on a global scale (NAFTANOW, 2008).