Leader Development Program Pupuk Indonesia

The Diamond of National Advantage Jump to Appendix 2 long image description © McGraw-Hill Education. THE DIAMOND FRAMEWORK Answers important questions about competing on an international basis by: ● Predicting where new foreign entrants are likely to come from and their strengths ● Highlighting foreign market opportunities where rivals are weakest ● Identifying the location-based advantages of conducting certain value chain activities of the firm in a particular country 47 © McGraw-Hill Education.

PORTER DIAMOND © McGraw-Hill Education. PORTER DIAMOND 48 © McGraw-Hill Education.

WHY INVESTOR GO TO VIETNAM © McGraw-Hill Education. WHY INVESTOR GO TO VIETNAM 49 © McGraw-Hill Education.

SUPPLY CHAINS © McGraw-Hill Education. SUPPLY CHAINS 50 © McGraw-Hill Education.

REASONS FOR LOCATING VALUE CHAIN ACTIVITIES ADVANTAGEOUSLY ♦ Lower wage rates ♦ Proximity to suppliers and technologically ♦ Higher worker related industries productivity ♦ Proximity to ♦ Lower energy costs customers ♦ Fewer environmental ♦ Lower distribution regulations costs ♦ Lower tax rates ♦ Available or unique natural resources ♦ Lower inflation rates © McGraw-Hill Education. THE IMPACT OF GOVERNMENT POLICIES AND ECONOMIC CONDITIONS IN HOST COUNTRIES ♦ Positives ♦ Negatives 51 ● Tax incentives ● Environmental regulations ● Low tax rates ● Subsidies and loans to ● Low-cost loans ● Site location and domestic competitors ● Import restrictions development ● Tariffs and quotas ● Worker training ● Local-content requirements ● Regulatory approvals © McGraw-Hill Education. ● Profit repatriation limits ● Minority ownership limits

CROSS-COUNTRY DIFFERENCES IN DEMOGRAPHIC, CULTURAL, AND MARKET CONDITIONS Key Strategic Whether to customize offerings Considerations in each country market to match the tastes and the preferences of local buyers Whether to pursue a strategy of offering a mostly standardized product worldwide © McGraw-Hill Education. Jump to Appendix 3 long image description STRATEGIC OPTIONS FOR ENTERING AND COMPETING IN INTERNATIONAL MARKETS ♦ Maintain a home country production base and 52 export goods to foreign markets. ♦ License foreign firms to produce and distribute the firm’s products abroad. ♦ Employ a franchising strategy in foreign markets. ♦ Establish a subsidiary in a foreign market via acquisition or internal development. ♦ Rely on strategic alliances or joint ventures with foreign companies. © McGraw-Hill Education.

EXPORT STRATEGIES ♦ Advantages ♦ Disadvantages ● Low capital ● Maintaining relative requirements cost advantage of home-based ● Economies of scale production in utilizing existing production capacity ● Transportation and shipping costs ● No distribution risk ● Exchange rates risks ● No direct investment risk ● Tariffs and import duties ● Loss of channel control © McGraw-Hill Education. LICENSING AND FRANCHISING STRATEGIES ♦ Advantages ♦ Disadvantages ● Low resource ● Maintaining control of requirements proprietary know-how ● Income from royalties ● Loss of operational and franchising fees and quality control ● Rapid expansion into ● Adapting to local many markets market tastes and expectations 53 © McGraw-Hill Education.

FOREIGN SUBSIDIARY STRATEGIES ♦ Advantages ♦Disadvantages ● High level of control ● Costs of acquisition ● Quick large-scale ● Complexity of market entry acquisition process ● Avoids entry ● Integration of the barriers firms’ structures, cultures, operations, ● Access to acquired and personnel firm’s skills © McGraw-Hill Education. CORE CONCEPT- GREENFIELD VENTURE A greenfield venture is a subsidiary business that is established by setting up the entire operation from the ground up. 54 © McGraw-Hill Education.

USING A GREENFIELD STATEGY FOR DEVELOPING A FOREIGN SUBSIDIARY A greenfield strategy is appealing when: ● Creating an internal startup is cheaper than making an acquisition ● Adding new production capacity will not adversely impact the supply-demand balance in the local market ● A startup subsidiary has the ability to gain good distribution access ● A startup subsidiary will have the size, cost structure, and resource strengths to compete head-to-head against local rivals © McGraw-Hill Education. PURSUING A GREENFIELD STRATEGY ♦ Advantages ♦ Disadvantages ● High level of control ● Capital costs of initial over venture development ● “Learning by doing” ● Risks of loss due to in the local market political instability or lack of legal protection ● Direct transfer of the of ownership firm’s technology, skills, business ● Slowest form of entry practices, and culture due to extended time required to construct facility 55 © McGraw-Hill Education.

BENEFITS OF ALLIANCE AND JOINT VENTURE STRATEGIES ♦ Gaining partner’s knowledge of local market conditions ♦ Achieving economies of scale through joint operations ♦ Gaining technical expertise and local market knowledge ♦ Sharing distribution facilities and dealer networks, and mutually strengthening each partner’s access to buyers ♦ Directing competitive energies more toward mutual rivals and less toward one another ♦ Establishing working relationships with key officials in the host-country government © McGraw-Hill Education. STRATEGIC MANAGEMENT PRINCIPLE (4 of 6) Cross-border alliances enable a growth-minded firm to widen its geographic coverage and strengthen its competitiveness in foreign markets; at the same time, they offer flexibility and allow a firm to retain some degree of autonomy and operating control. 56 © McGraw-Hill Education.

THE RISKS OF STRATEGIC ALLIANCES WITH FOREIGN PARTNERS ♦ Outdated knowledge and expertise of local partners ♦ Cultural and language barriers ♦ Costs of establishing the working arrangement ♦ Conflicting objectives and strategies or deep differences of opinion about joint control ♦ Differences in corporate values and ethical standards ♦ Loss of legal protection of proprietary technology or competitive advantage ♦ Overdependence on foreign partners for essential expertise and competitive capabilities © McGraw-Hill Education. INTERNATIONAL STRATEGY: THE THREE MAIN APPROACHES Competing Internationally Multidomestic Global Transnational Strategy Strategy Strategy 57 © McGraw-Hill Education.

CORE CONCEPTS (3 of 6) An international strategy is a strategy for competing in two or more countries simultaneously. A multidomestic strategy is one in which a firm varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer preferences and market conditions. It is a think-local, act-local type of international strategy, facilitated by decision making decentralized to the local level. © McGraw-Hill Education. CORE CONCEPTS (4 of 6) A global strategy is one in which a firm employs the same basic competitive approach in all countries where it operates, sells much the same products everywhere, strives to build global brands, and coordinates its actions worldwide with strong headquarters control. It represents a think- global, act-global approach. A transnational strategy is a think-global, act-local approach that incorporates elements of both multidomestic and global strategies. 58 © McGraw-Hill Education.

Three Approaches for Competing Internationally © McGraw-Hill Education. Jump to Appendix 4 long image description COMPETING INTERNATIONAL 59 © McGraw-Hill Education.

INTERNATIONAL OPERATIONS AND THE QUEST FOR COMPETITIVE ADVANTAGE Build Competitive Advantage in International Markets Use international Share resources Gain cross-border location to lower and capabilities coordination cost or differentiate benefits product © McGraw-Hill Education. Jump to Appendix 5 long image description Advantages and Disadvantages of a Multidomestic Strategy Multidomestic (think local, act local) Advantages Disadvantages • Can meet the specific needs of • Hinders resource and capability each market more precisely sharing or cross-market transfers • Can respond more swiftly to • Has higher production and localized changes in demand distribution costs • Can target reactions to the moves • Is not conductive to a worldwide of local rivals competitive advantage • Can respond more quickly to local opportunities and threats 60 © McGraw-Hill Education.

Advantages and Disadvantages of a Global Strategy Global (think global, act global) Advantages Disadvantages • Has lower costs due to scale and • Cannot address local needs scope economies precisely • Can lead to greater efficiencies • Is less responsive to changes in due to the ability to transfer best local market conditions practices across markets • Increases innovation from • Involves higher transportation knowledge sharing and capability costs and tariffs transfer • Offers the benefit of a global • Has higher coordination and brand and reputation integration costs © McGraw-Hill Education. Advantages and Disadvantages of Transnational Strategy Transnational (think global, act local) Advantages Disadvantages • Offers the benefits of both local • Is more complex and harder to responsiveness and global implement integration • Enables the transfer and sharing • Entails conflicting goals, which of resources and capabilities may be difficult to reconcile and across borders require trade-offs • Provides the benefits of flexible • Involves more costly and time- coordination consuming implementation 61 © McGraw-Hill Education.

USING LOCATION TO BUILD COMPETITIVE ADVANTAGE Key Location To customize offerings in each Issues country market to match tastes and preferences of local buyers To pursue a strategy of offering a mostly standardized product worldwide © McGraw-Hill Education. Jump to Appendix 6 long image description WHEN TO CONCENTRATE ACTIVITIES IN A FEW LOCATIONS ♦ The costs of manufacturing or other activities 62 are significantly lower in some geographic locations than in others. ♦ There are significant scale economies in production or distribution. ♦ There are sizable learning and experience benefits associated with performing an activity in a single location. ♦ Certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. © McGraw-Hill Education.

WHEN TO DISPERSE ACTIVITIES ACROSS MANY LOCATIONS ♦ Buyer-related activities can be conducted at a distance. ♦ There are high transportation costs. ♦ There are diseconomies of large size. ♦ Trade barriers make a central location too expensive. ♦ Dispersing activities reduces exchange rate risks. ♦ Dispersion helps prevent supply interruptions. ♦ Dispersion helps avoid adverse political developments. ♦ Dispersion allows for location-based technology and production cost competitive advantages. © McGraw-Hill Education. SHARING AND TRANSFERRING RESOURCES AND CAPABILITIES TO BUILD COMPETITIVE ADVANTAGE ♦ Building a resource-based competitive advantage requires: ● Using powerful brand names to extend a differentiation- based competitive advantage beyond the home market ● Coordinating activities for sharing and transferring resources and production capabilities across different countries’ domains to develop market dominating depth in key competencies 63 © McGraw-Hill Education.

STRATEGY OPTIONS FOR COMPETING IN THE MARKETS OF DEVELOPING COUNTRIES ♦ Prepare to compete on the basis of low price. ♦ Prepare to modify the firm’s business model or strategy to accommodate local circumstances. ♦ Try to change the local market to better match the way the firm does business elsewhere. ♦ Stay away from developing markets where it is impractical or uneconomical to modify the company’s business model to accommodate local circumstances. © McGraw-Hill Education. 64 DEFENDING AGAINST GLOBAL GIANTS: STRATEGIES FOR LOCAL COMPANIES IN DEVELOPING COUNTRIES 1. Develop a business model that exploits shortcomings in local distribution networks or infrastructure. 2. Utilize knowledge of local customer needs and preferences to create customized products or services. 3. Take advantage of aspects of the local workforce with which large multinational firms may be unfamiliar. 4. Use acquisition and rapid-growth strategies to defend against expansion-minded internationals. 5. Transfer company expertise to cross-border markets and initiate actions to contend on an international level. © McGraw-Hill Education.

BENCHMARKING EXPERIENCE OF : WIKA – GMF - SINOFERT © McGraw-Hill Education. BENCHMARKING - WIKA 65 © McGraw-Hill Education.

BENCHMARKING © McGraw-Hill Education. Benchmarking 66 © McGraw-Hill Education.

BENCHMARKING - WIKA 60 © McGraw-Hill Education. BENCHMARKING - WIKA 67 © McGraw-Hill Education.

BENCHMARKING - GMF © McGraw-Hill Education. BENCHMARKING - GMF 68 © McGraw-Hill Education.

BENCHMARKING - GMF © McGraw-Hill Education. BENCHMARKING - SINOFERT 69 © McGraw-Hill Education.

BENCHMARKING - SINOFERT © McGraw-Hill Education. BENCHMARKING – SINOFERT HOLDING Of SINOFERT HOLDING 70

BENCHMARKING – SINOFERT © McGraw-Hill Education. Case Study Problem Identification : Pupuk Indonesia Group memiliki rencana untuk melakukan ekspansi ke sektor hilir dalam rangka mengamankan jaringan distribusi ke negara tujuan ekspor . Rencana ini diharapkan dapat meningkatkan daya saing dengan keunggulan pada struktur biaya dan diferensiasi dalam jangka panjang . Lakukan analisa bisnis sederhana untuk menghasilkan the best alternative solutions . Tools : SWOT – Porter Five Forces – Value Chain Analysis-Blue Ocean Strategy – etc Recommendation: Corporate Level Strategy and Business Level Strategy 71 © McGraw-Hill Education.

OTHER ASPECT SOFT COMPETENCIES IN MULTI CULTURE MANAGEMENT © McGraw-Hill Education. JASA RAHARJA 72

HOEFSTEDE-POWER DISTANCE © McGraw-Hill Education. VISITING SASAC – CHINA Selasa, 17 Juli 2018 15:00 WIB Warta Ekonomi Toto Pranoto: Reformasi BUMN Ala SASAC WE Online, Jakarta - 73 Lembaga Manajemen Universitas Indonesia (LM UI) berdiskusi dengan pihak State Asset Supervision and Administration Commission (SASAC) dan beberapa BUMN di China dalam kesempatan business trip di awal Mei 2018 lalu. Bersama beberapa eksekutif BUMN yang tergabung dalam trip ini, dilakukan kegiatan diskusi, sharing experience, dan upaya membangun business networking di antara kedua belah pihak. Kunjungan pertama dilakukan ke lembaga pengelola BUMN di China, yaitu SASAC. Lembaga ini menjadi institusi seperti Kementerian BUMN di Indonesia. Delegasi BUMN Indonesia diterima oleh Mr. Yin Yisheng sebagai Deputi Direktur Bidang Restrukturisasi SASAC. © McGraw-Hill Education.

Visiting KHAZANAH Home Ekonomi Bisnis : BUMN Berorientasi Global Studi Banding ke Khazanah Nasional Berhad Kompas.com - 08/11/2018, 21:59 WIB JAKARTA, KOMPAS.com - Sejumlah BUMN yang berorientasi pada bisnis global melakukan studi banding ke Khazanah Nasional Berhad, Malaysia. Kunjungan ini difasilitasi oleh Lembaga Manajemen Fakultas Ekonomi dan Bisnis Universitas Indonesia (FEB UI). Dalam keterangan tertulisnya, Kamis (8/11/2018), Managing Director LM FEB UI Toto Pranoto menjelaskan aspek penting yang dibahas dalam workshop tersebut, antara lain terkait strategi memosisikan BUMN sebagai pemain di skala regional dan kemudian naik menjadi pemain global. “Prasyarat apa saja yang dianggap sebagai DNI pemain global dibedah secara tuntas dengan mengedepankan beberapa contoh perusahaan yang relevan. Juga aspek strategis dari pengelolaan risiko yang melekat pada pemain regional atau global dibahas tuntas,” tutur Toto. Pada kunjungan ke Khazanah Nasional Bhd, para eksekutif BUMN yang mengikuti benchmarking ini diterima oleh Executive Director Investment Khazanah, Amran Hafiz. Ia mempresentasikan proses transformasi agar mampu merubah kinerja menjadi lebih baik © McGraw-Hill Education. Referensi ♦ Gamble , Thomson , Essential of Strategic Management, 5th edition ,McGraw Hill , 2017 ♦ Sinofert Annual Report 2014 & 2015 ♦ Rothaermel, F. T. (2013). Strategic Management: Concepts & Cases. New York: McGraw-Hill Irwin ♦ BUMN Award 2018 74 © McGraw-Hill Education.

© McGraw-Hill Education. 75



Global Business Agenda I. Global Market II. Dynamics of Global Economy, Politics, and Culture III. Global Market Entry Requirements IV. Global Market Penetration and Expansion V. Global Hidden Champion and Disruption 76

I. GLOBAL MARKET What Is Globalization?  Globalization - the shift toward a more 77 integrated and interdependent world economy  The world is moving away from self- contained national economies toward an interdependent, integrated global economic system

Stages of Globalization Globalization 1.0: 1900–1941 • Sales, operations, and some procurement • Strategy flowed from HQ to international sites Globalization 2.0: 1945–2000 • To reconstruct damage from the war • Focus on European countries, Japan, and Australia • Greater local-responsiveness • HQ set goals, international sites influenced tactics Globalization 3.0: 21st Century • Business function locations are based on costs, capabilities, and PESTEL factors • Companies can operate 24/7, 365 days a year What Is The Globalization of Markets?  Historically distinct and separate national markets are 78 merging  It no longer makes sense to talk about the “German market” or the “American market”  Instead, there is the “global market”  falling trade barriers make it easier to sell globally  consumers’ tastes and preferences are converging on some global norm  firms promote the trend by offering the same basic products worldwide

What Is The Globalization of Markets? Firms of all sizes benefit and contribute to the globalization of markets  97% of all U.S. exporters have less than 500 employees  98% of all small and mid-sized German companies participate in international markets What Is The 79 Globalization of Production?  Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, energy, and capital  Companies can  lower their overall cost structure  improve the quality or functionality of their product offering

Why Do We Need Global Institutions? Global institutions  help manage, regulate, and police the global marketplace  promote the establishment of multinational treaties to govern the global business system Why Do We Need 80 Global Institutions?  Examples include  the General Agreement on Tariffs and Trade (GATT)  the World Trade Organization (WTO)  the International Monetary Fund (IMF)  the World Bank  the United Nations (UN)  the G20

What Do Global Institutions Do?  The World Trade Organization (like its predecessor GATT)  polices the world trading system  makes sure that nation-states adhere to the rules laid down in trade treaties  promotes lower barriers to trade and investment  159 members in 2013 What Do Global 81 Institutions Do?  The International Monetary Fund (1944)  maintains order in the international monetary system  lender of last resort for countries in crisis  Argentina, Indonesia, Mexico, Russia, South Korea, Thailand, Turkey, Ireland, and Greece  The World Bank (1944)  promotes economic development via low interest loans for infrastructure projects

What Do Global Institutions Do?  The United Nations (1945)  maintains international peace and security  develops friendly relations among nations  cooperates in solving international problems and in promoting respect for human rights  is a center for harmonizing the actions of nations  The G20  forum through which major nations tried to launch a coordinated policy response to the 2008-2009 global financial crisis What Is Driving Globalization? 82  Declining barriers to the free flow of goods, services, and capital  average tariffs are now at just 4%  more favorable environment for FDI  global stock of FDI was $20.4 trillion in 2011  facilitates global production  Technological change  microprocessors and telecommunications  Internet: information backbone of the global economy  transportation technology

What Does Globalization Mean For Firms?  Lower barriers to trade and investment mean firms can  view the world, rather than a single country, as their market  base production in the optimal location for that activity  But, firms may also find their home markets under attack by foreign firms Declining Trade And Investment Barriers Average Tariff Rates on Manufactured Products as Percent of Value 83

What Does Globalization Mean For Firms?  Technological change means  lower transportation costs  help create global markets and allow firms to disperse production to economical, geographically separate locations  low cost information processing and communication  firms can create and manage globally dispersed production  low cost global communications networks  help create an electronic global marketplace  global communication networks and global media  create a worldwide culture and a global consumer product market The Changing Demographics 84 Of The Global Economy  Four trends are important: 1. The changing world output and world trade picture 2. The changing foreign direct investment picture 3. The changing nature of the multinational enterprise 4. The changing world order

What Is A Multinational Enterprise?  Multinational enterprise (MNE) - any business that has productive activities in two or more countries  Since the 1960s  the number of non-U.S. multinationals has risen  the number of mini-multinationals has risen II. DYNAMICS OF GLOBAL ECONOMY, POLITICS, AND CULTURE 85

How Will The Global Economy Of The 21st Century Look?  The world is moving toward a more global economic system…  But globalization is not inevitable  there are signs of a retreat from liberal economic ideology in Russia  Globalization brings risks  the financial crisis that swept through South East Asia in the late 1990s  the recent financial crisis that started in the U.S. in 2008-2009, and moved around the world Is An Interdependent 86 Global Economy A Good Thing?  Supporters believe that increased trade and cross-border investment mean  lower prices for goods and services  greater economic growth  higher consumer income, and more jobs  Critics worry that globalization will cause  job losses  environmental degradation  the cultural imperialism of global media and MNEs  Anti-globalization protesters now regularly show up at most major meetings of global institutions

How Does Globalization Affect Jobs And Income?  Critics argue that falling barriers to trade are destroying manufacturing jobs in advanced countries  Supporters contend that the benefits of this trend outweigh the costs  countries will specialize in what they do most efficiently and trade for other goods—and all countries will benefit How Does Globalization Affect Labor Policies And The Environment?  Critics argue that firms avoid the cost of adhering to labor and environmental regulations by moving production to countries where such regulations do not exist, or are not enforced  Supporters claim that tougher environmental and labor standards are associated with economic progress  as countries get richer from free trade, they implement tougher environmental and labor regulations 87

How Does Globalization Affect National Sovereignty?  Is today’s global economy shifting economic power away from national governments toward supranational organizations like the WTO, the EU, and the UN?  Critics argue that unelected bureaucrats have the power to impose policies on the democratically elected governments of nation-states  Supporters claim that the power of these organizations is limited to what nation-states agree to grant  the power of the organizations lies in their ability to get countries to agree to follow certain actions How Is Globalization Affecting The World’s Poor?  Is the gap between rich nations and poor nations getting wider?  Critics believe that if globalization was beneficial there should not be a divergence between rich and poor nations  Supporters claim that the best way for the poor nations to 88 improve their situation is to  reduce barriers to trade and investment  implement economic policies based on free market economies  receive debt forgiveness for debts incurred under totalitarian regimes

How Does The Global Marketplace Affect Managers?  Managing an international business differs from managing a domestic business because  countries are different  the range of problems confronted in an international business is wider and the problems more complex than those in a domestic business  firms have to find ways to work within the limits imposed by government intervention in the international trade and investment system  international transactions involve converting money into different currencies What Is Regional Economic Integration?  Regional economic integration - agreements between 89 countries in a geographic region to reduce tariff and non- tariff barriers to the free flow of goods, services, and factors of production between each other  Question: Do regional trade agreements promote free trade?  In theory, yes, but the world may be moving toward a situation in which a number of regional trade blocks compete against each other

What Are The Levels Of Regional Economic Integration? 1. A free trade area eliminates all barriers to the trade of goods and services among member countries  European Free Trade Association (EFTA) - Norway, Iceland, Liechtenstein, and Switzerland  North American Free Trade Agreement (NAFTA) - U.S., Canada, and Mexico What Are The Levels Of Regional Economic Integration? 2. A customs union eliminates trade barriers between member countries and adopts a common external trade policy  Andean Community (Bolivia, Colombia, Ecuador, and Peru) 3. A common market has no barriers to trade between member countries, a common external trade policy, and the free movement of the factors of production  Mercosur (Brazil, Argentina, Paraguay, and Uruguay) 90

What Are The Levels Of Regional Economic Integration? 4. An economic union has the free flow of products and factors of production between members, a common external trade policy, a common currency, a harmonized tax rate, and a common monetary and fiscal policy  European Union (EU) 5. A political union involves a central political apparatus that coordinates the economic, social, and foreign policy of member states  the EU is headed toward at least partial political union, and the U.S. is an example of even closer political union What Are The Levels Of Regional Economic Integration? Levels of Economic Integration 91

What Is The Status Of Regional Economic Integration In Europe? Member States of The European Union in 2012 What Is The Status Of Economic 92 Integration In The Americas?  There is a move toward greater regional economic integration in the Americas  The biggest effort is the North American Free Trade Area (NAFTA)  Other efforts include the Andean Community and Mercosur  A hemisphere-wide Free Trade of the Americas is under discussion

What Is The Status Of Economic Integration In The Americas? Economic Integration in the Americas What Is The North American 93 Free Trade Agreement?  The North American Free Trade Area includes the United States, Canada, and Mexico  abolished tariffs on 99% of the goods traded between members  removed barriers on the cross-border flow of services  protects intellectual property rights  removes most restrictions on FDI between members  allows each country to apply its own environmental standards  establishes two commissions to impose fines and remove trade privileges when environmental standards or legislation involving health and safety, minimum wages, or child labor are ignored

What Is The Andean Community?  The Andean Pact  formed in 1969 using the EU model  had more or less failed by the mid-1980s  was re-launched in 1990, and now operates as a customs union  renamed the Andean Community in 1997  signed an agreement in 2003 with Mercosur to restart negotiations towards the creation of a free trade area What Is Mercosur? 94  Mercosur  originated in 1988 as a free trade pact between Brazil and Argentina  was expanded in 1990 to include Paraguay and Uruguay and in 2005 with the addition of Venezuela  may be diverting trade rather than creating trade, and local firms are investing in industries that are not competitive on a worldwide basis  initially made progress on reducing trade barriers between member states, but more recently efforts have stalled

What Is The Central American Trade Agreement And CARICOM?  There are two other trade pacts in the Americas  the Central American Trade Agreement –(CAFTA, 2005) - to lower trade barriers between the U.S. and members  CARICOM (1973) - to establish a customs union  Neither pact has achieved its goals yet  In 2006, six CARICOM members formed the Caribbean Single Market and Economy (CSME) - to lower trade barriers and harmonize macro-economic and monetary policy between members What Is The Status Of 95 Economic Integration In Asia? Various efforts at integration have been attempted in Asia, but most exist in name only  Association of Southeast Asian Nations (ASEAN)  Asia-Pacific Economic Cooperation (APEC)