Regional Economic Integration as a Growth Strategy
To achieve cost efficiencies while increasing quality and staying ahead on the innovation curve, companies often rely on a mix of materials and services from suppliers around the world. As more countries have opened their economies to trade and investment, suppliers of specific components and inputs have become linked through ever-growing and evolving global supply networks.
Regional economic integration has emerged as a policy strategy to pursue growth and job creation objectives, while enabling manufacturers to better meet consumer demands. As firms leverage global differences and complementary resources, they are incentivized to focus on countries in geographic proximity. Policy arrangements like free trade agreements, investment agreements, and other forms of deeper informal or formal economic integration are intended to capture as much manufacturing value-added as possible within the region while strengthening the ability of regionally-made products to compete globally.
In this section, we analyze the approaches to macroeconomic integration in North America, the European Union, the Asia-Pacific Economic Cooperation (APEC), and the Central America Free Trade Agreement (U.S.-DR-CAFTA) to discern the impact on each region's global competitiveness.
We believe that, done right, regional economic integration promotes growth, per capita growth, global trade, and job creation – but we invite you to engage with the data and reach your own conclusions.