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Economic integration refers to creating multicountry markets by developing transnational rules that reduce the fiscal and physical barriers to trade as well as encourage greater economic cooperation among countries.
Most economic integration occurs through the institution of trade agreements allowing consumers the opportunity to choose from a significantly larger selection of goods than that previously available. Many of these agreements encompass a limited number of countries in close geographic proximity, but the General Agreement on Tariffs and Trade (GATT) involves over 100 nations worldwide.
Trade agreements have created access to more markets with vast numbers of new customers, new vendor sources for materials and labor, and opportunities for new production operations. In turn, competitive pressures from the need to meet or beat prices and quality of international competitors force organizations to focus on cost control, quality improvements, rapid time-to-market, and dedicated customer service. The accompanying News Note on page 12 reveals an interesting outcome from the North American Free Trade Agreement. As companies become more globally competitive, consumers’ choices are often made on the bases of price, quality, access (time of availability), and design rather than on whether the goods were made domestically or in another country.
