Integrative added value and its expressions in MERCOSUR and other regional organizations

Abstract

PURPOSE: While doing research on European Union activities a phenomenon of creation European Added Value was discovered. It is worth examining whether a similar phenomenon appears in other regional organizations/Free Trade Areas, such as: MERCOSUR, EFTA, NAFTA and ASEAN.

DESIGN/METHODOLOGY/APPROACH: In the article, apart from statistical information, reports of the European Commission and different Free Trade Areas (FTAs) were examined. The study analyzes different statistics as well as reviews literature on the MERCOSUR and other FTAs. Document analysis and comparative methods, were employed.

FINDINGS: The analysis shows that in all the surveyed groupings similar joint activities were carried out like in the European Union. However, they did not concern agriculture, defense policy and internal security. Joint budget generally determines joint ventures that create added value in the groupings in question. Activities that in the FTA are jointly managed generate integrative added value in the economic, social and environmental spheres.

PRACTICAL IMPLICATIONS: The results of the research shall be of interest for scientists, students, politicians and decision makers.

ORIGINALITY/VALUE: This is a new approach. Besides the trade creation and trade diversion effects as described in theories of economic integration one can find the third “integrative added value effect”.