The Role of the State to Promote National Competitiveness - Essay Example

This is a strategy to gain the advantage of size in the market a creating a large market for the major industries and protecting them from the outside competition (Hitt Ireland & Hoskisson, 1999). Removal of trade barriers may lead the firms to realign their organizational structures to focus on a regional market. These integrations will continue to be building blocks in the global economy.

The format of ion international integration like the European Union liberalized public procurement (Stanley Hoffman, 2002).  It also reduced the cost of once the certainty of different currencies. Tesco is the UK’s leading food retailer, benefits from European Union's fewer regulations. Therefore, it has been able to penetrate several countries within the region.

The United States also entered into a trade agreement with Canada and Mexico, NAFTA to eliminate trade restrictions (UN, 2001). NAFTA also encourages the improvement of infrastructures within member states. Wal-Mart was able to enter the Mexica market in 1990, and by 2004 it became the largest retail store.  This has enabled the Mexico retail sector to grow after the trade liberalization under NAFTA.  Moreover, NAFTA has necessitated foreign direct investments in Mexico (Paprzycki & Fukao, 2008).

The Agreement in Southeast Asia (ASEAN) was formed to promote multilateral economic cooperation within the Pacific region (Rondinelli, Heffron & Pacific Basin Research Center, 2007). The leaders committed themselves achieve free and open trade in the region. BYD also has benefited from zero tariffs under the free trade liberalization between China and ASEAN.

Conclusion

The market systems are the drivers of the national economic growth and ways through which private enterprise becomes competitive at the international level (Tabb, 2004). However, to operate effectively, they require a strong institutional framework. States through economic integrations promote local industries to penetrate in other countries, thus increasing their competitiveness.