LIKELY IMPACT OF REGIONALISM ON THE KENYAN INTERNATIONAL MARKETING FIRMS

Regionalism encompasses efforts by a group of nations to enhance their economic, political, social, or cultural interaction. Such efforts can take on different forms, including regional cooperation, market integration, development integration, and regional integration.

 Joseph Nye defined an international region "as a limited number of states linked by a geographical relationship and by a degree of mutual interdependence", and (international) regionalism as "the formation of interstate associations or groupings on the basis of regions.

Trade Creation: Member countries have (a) wider selection of goods and services not previously available; (b) acquire goods and services at a lower cost after trade barriers due to lowered tariffs or removal of tariffs (c) encourage more trade between member countries the balance of money spend from cheaper goods and services, can be used to buy more products and services

Political Cooperation: A group of nation can have significantly greater political influence than each nation would have individually. This integration is an essential strategy to address the effects of conflicts and political instability that may affect the region. It is a useful tool to handle the social and economic challenges associated with globalization. Marketing therefore in this region becomes easier.

Employment Opportunities: As economic integration encourage trade liberation and lead to market expansion, more investment into the country and greater diffusion of technology, it create more employment opportunities for people to move from one country to another to find jobs or to earn higher pay. For example, industries requiring mostly unskilled labor tends to shift production to low wage countries within a regional cooperation.

Progress in trade: All countries that follow economic integration have extremely wide assortment of goods and services from which they can choose. Introduction of economic integration helps in acquiring goods and services at much low costs. This is because the removal of trade barriers reduces or removes the tariffs entirely. Reduced duties and lowered prices save a lot of spare money with countries which can be used for buying more products and services and improvement.

Beneficial for financial markets: Economic integration is extremely beneficial for financial markets as it eases firm to borrow finances at low rate if interest. This is because capital liquidity of larger capital market increases and the resultant diversification effect reduces the risks associated with high investment.

Increase in Foreign Direct Investments.
Economic integration helps to increase the amount of money in Foreign Direct Investment (FDI). Once firms start FDI, through new operations or by merger, takeover, and acquisition, it becomes an international enterprise.

Creation of Trading Blocs: It can also increase trade barriers against non-member countries. Therefore non-member countries find it difficult to establish businesses and products in such countries.

Trade Diversion: Because of trade barriers, trade is diverted from a non-member country to a member country despite the inefficiency in cost. For example, a country has to stop trading with a low cost manufacture in a non-member country and trade with a manufacturer in a member country which has a higher cost.

National Sovereignty: Requires member countries to give up some degree of control over key policies like trade, monetary and fiscal policies. The higher the level of integration, the greater the degree of controls that needs to be given up particularly in the case of a political union economic integration which requires nations to give up a high degree of sovereignty. This can particularly harmful to international marketing.

Godfrey Chege