Economic Geography

Economic Geography
Economic Unions SOL WG.9d
Economic Unions
• Examples of economic unions:
A. EU - European Union
B. NAFTA - North American Free Trade
C. ASEAN - Association of Southeast Asian
D. OPEC - Organization of Petroleum
Exporting Countries
European Union
• The European Union is an economic union
in Europe. Most countries in Europe are
members of the EU. Switzerland, Norway,
and Iceland did not join the EU.
• One goal of the EU is to create a common
market by getting rid of tariffs, improving
transportation networks, introducing one
currency, and making it easier for people to
travel between countries.
European Union
Blue = Area where euro
is used
Red = Other eu
• The North American Free Trade Agreement
is a trade agreement between Canada, the
United States, and Mexico. NAFTA has
eliminated tariffs between these three
countries, which means there is no tax on
imported goods.
Some negative impacts of NAFTA are:
A. The price of food increased in Mexico due to
cheap imported food from U.S. agribusiness.
U.S. manufacturing workers lost jobs because
many factories moved to Mexico.
Large factories called maquiladoras operate on
the Mexican side of the border and they often
mistreat workers and pay low wages.
• ASEAN stands for Association of
Southeast Asian Nations.
• ASEAN has ten members: Brunei,
Vietnam, Laos, Cambodia, Malaysia,
Thailand, Singapore, Philippines,
Indonesia, and Myanmar (Burma).
• ASEAN has many goals but it has reduced
or eliminated tariffs between most of the
• OPEC stands for Organization of Petroleum
Exporting Countries. The members of this
organization set the price and production of oil.
Most of the members of OPEC are in the Middle
East, but Venezuela, Nigeria, and Indonesia are
also members.
Not every country that has oil is a member of
OPEC. Russia and the U.S. are not members.
Advantages of Unions
A. More efficient industries
B. Access to larger markets
C. Access to natural, human, and capital
resources without restrictions
D. Greater influence on world market
Disadvantages of Unions
A. Closing of some industries
B. Concentration of some industries in
certain countries
C. Agribusiness replacing family farms
D. Difficulty in agreeing on common
economic policies
• Agribusiness refers to large scale farming
done by businesses. Agribusiness
operations typically cultivate thousands of
acres of land or raise thousands of animals
at a time and they are integrated with the
processing and distribution networks.