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Region Paper

In: Business and Management

Submitted By mcon1973
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Regional Analysis and ASEAN
Michael Concepcion
July 16, 2012
Martha Alcala

Regional Analysis and ASEAN
Regional integration can provide stability to a nation’s economic and political arenas. However, regional integration can be costly if trade diversion is not considered. The Association of Southeast Asian Nations (ASEAN) is advantageous for the member countries because it offers promise of solidarity and economic prosperity. However, historically member countries of ASEAN have not always been political allies and unresolved territorial disputes are still an issue. Finally, economic development of the countries of ASEAN is becoming increasingly enticing to larger countries such as China and America because of its potential “…as a market and production center for big companies from all over the world.” (Rabin, 2012)
Regional Integration
Regional integration can open up trade amongst nations that can have economical and political advantages but can often be costly due to diversion. Two cases can be made for regional integration. First, the economical advantages stem from the theory of free trade. According to Hall (2009), “…the theoretical ideal is an absence of barriers to the free flow of goods, services, and factors of production among nations.” (pg. 279, para.2) Regional integration among a few countries is easier to coordinate and function than integration on a global scale. Regional integrating bodies like the Association of Southeast Asian Nations (ASEAN), represent the Southeast Asian community and present itself to the global community as one, theoretically.
Two main arguments against regional integration are cost and national sovereignty. First, although regional integration helps all countries collectively, there are costs associated with integration. For example, “…due to the 1994 establishment of NAFTA, some Canadian and U.S. workers in...

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