1. Association of South East Asian Nations (ASEAN)

The Association of South East Asian Nations (ASEAN), organized in 1967, comprises Brunei, Cambodia Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. It promotes cooperation in many areas, including industry and trade. Member countries are protected in terms of tariff and non-tariff barriers. Yet they hold promise for market and investment opportunities because of their large market size (500 million people). On January 1, 1993, ASEAN officially formed the ASEAN Free Trade Area (AFTA). AFTA’s goal is to cut tariffs on all intrazonal trade to a maximum of 5 percent by January 1, 2008.

2. The E.U, and EMU

1. The E.U was created aiming at free trade between the member states.

2. Free trade means that there are no barriers in terms of duties, quotas, etc.

3. Free trade requires free movement of labour (no visas), capital (businessmen are treated equally regardless nationality), and goods and services (same product specifications with no barriers to entry).

4. The single market was declared so that the member states will enjoy one big domestic market (France and the U.K, for instance, will be the same as Male’ and Addu, as no tariffs, no quotas).

5. The single market requires single currency. Because exchange rate fluctuations might make it difficult for free trade to take place. The currency used in Male’ and Addu is the Rufiyaa, so that the currency used in the U.K and France, for example, should be the same.

6. The starting step was with the ERM, to minimize the problem of exchange rate fluctuations, but the U.K withdrew itself from that system in 16 September 1992, after two years of membership.

7. Till today, the U.K is not a member state in the Euro.

8. Now we cannot find French franc or German mark, as they are all replaced by the Euro.

9. The Euro has 12 member states so far (as at 30^th January 2003).

10. The main advantage of the Euro is the certainty assured in transactions across the member states in terms of exchange rate. But the ERM, which led to Euro later, makes it difficult for countries to control their economies.

11. Euro makes it easy for businesses all over the member states to trade between them. It is difficult for the U.K businesses now as the pound is struggling with new powerful comer, the Euro.

12. However, the U.K goods do have the free access into the E.U as it is a member in the single market.

13. The single market, common specification and the Euro represent challenges, in terms of competition, to big businesses, and, in fact, a big threat to the smaller ones.

14. Businesses outside the E.U have to use the Euro in exchange. They have to follow the product specifications approved by the E.U as well. Matching the E.U specifications increases cost because it requires full revise for the business techniques.