Regional Economic Integration
Completion requirements
While going through this reference, focus on the EU. It will provide you with a historical perspective of the EU and a future outlook of the EU as a trading bloc. In addition, it will be beneficial to read about other trade agreements as it will provide you with more details on the different forms of economic integration. Which is more beneficial for states, lax economic integrations or more comprehensive ones?
Key Takeaways
- Regional economic integration refers to efforts to promote free and fair trade on a regional basis.
There are four main types of economic integration:
- Free trade areais the most basic form of economic cooperation. Member countries remove all barriers to trade between themselves, but are free to independently determine trade policies with nonmember nations.
- Customs unionprovides for economic cooperation. Barriers to trade are removed between member countries, and members agree to treat trade with nonmember countries in a similar manner.
- Common marketallows for the creation of an economically integrated market between member countries. Trade barriers and any restrictions on the movement of labor and capital between member countries are removed. There is a common trade policy for trade with nonmember nations, and workers no longer need a visa or work permit to work in another member country of a common market.
- Economic unionis created when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies.
- The largest regional trade cooperative agreements are the European Union (EU), the North American Free Trade Agreement (NAFTA), and the Asia–Pacific Economic Cooperation (APEC). The African Economic Community (AEC) has more member countries than the EU, NAFTA, and APEC but represents a substantially smaller portion of global trade than these other cooperatives.