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    Regional Economic Integration

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    Sale Brankovic
    Regional economic integration involves countries in a geographic region reducing barriers to trade and movement of goods, services, and factors of production between each other. There are three main types of regional integration arrangements: free trade areas, customs unions, and common markets. Between 1948 and 1994 there were 124 regional trade agreements formed. Regional integration has been very successful in Europe through the European Union, which functions as a single market of over 500 million consumers. Other examples of regional integration include NAFTA between Canada, Mexico, and the United States, as well as MERCOSUR between South American countries. While regional integration can increase efficiency and competitiveness, there is also a concern that an increase in regional blocs could divide the world into competing trade regions

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    Regional Economic Integration

    Uploaded by

    Sale Brankovic
    71 views1 page
    Regional economic integration involves countries in a geographic region reducing barriers to trade and movement of goods, services, and factors of production between each other. There are three main types of regional integration arrangements: free trade areas, customs unions, and common markets. Between 1948 and 1994 there were 124 regional trade agreements formed. Regional integration has been very successful in Europe through the European Union, which functions as a single market of over 500 million consumers. Other examples of regional integration include NAFTA between Canada, Mexico, and the United States, as well as MERCOSUR between South American countries. While regional integration can increase efficiency and competitiveness, there is also a concern that an increase in regional blocs could divide the world into competing trade regions

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    Regional economic integration involves countries in a geographic region reducing barriers to trade and movement of goods, services, and factors of production between each other. There are three main types of regional integration arrangements: free trade areas, customs unions, and common markets. Between 1948 and 1994 there were 124 regional trade agreements formed. Regional integration has been very successful in Europe through the European Union, which functions as a single market of over 500 million consumers. Other examples of regional integration include NAFTA between Canada, Mexico, and the United States, as well as MERCOSUR between South American countries. While regional integration can increase efficiency and competitiveness, there is also a concern that an increase in regional blocs could divide the world into competing trade regions

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    71 views1 page

    Regional Economic Integration

    Uploaded by

    Sale Brankovic
    Regional economic integration involves countries in a geographic region reducing barriers to trade and movement of goods, services, and factors of production between each other. There are three main types of regional integration arrangements: free trade areas, customs unions, and common markets. Between 1948 and 1994 there were 124 regional trade agreements formed. Regional integration has been very successful in Europe through the European Union, which functions as a single market of over 500 million consumers. Other examples of regional integration include NAFTA between Canada, Mexico, and the United States, as well as MERCOSUR between South American countries. While regional integration can increase efficiency and competitiveness, there is also a concern that an increase in regional blocs could divide the world into competing trade regions

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    6.

    Regional Economic Integration

    By regional economic integration we mean that agreements among countries in a geographic region
    to reduce, and ultimately remove, tariff and non-tariff barriers to the free flow of goods,
    services and factors of production between each other. There are 3 types of regional integration
    arrangements (RIA):
    A free trade area (FTA) - an RIA formed by removing tariffs among FTA members, without
    changing tariffs on Imports from non-members;
    A customs union (CU) - members' tariff structures on the extra-CU are equal;
    A common market (CM) - which permits free movement of factors as well as goods
    and services between states.

    Between 1948 and 1994 there were 124 regional trade agreements made. Regional economic
    integration is very successful in Europe. The EU is a single market with more than 500 million
    consumers. The member-states of the EU have launched a single currency, and they are discussing
    including other European states.

    There are similar moves toward regional integration in other parts of the world.

    Canada, Mexico and the United States have implemented the North American Free Trade
    Agreement (NAFTA).
    Argentina, Brazil, Uruguay, and Paraguay are starting to reduce barriers to trade. It is known as
    MERCOSUR, and is a move towards South American Free Trade Area (SAFTA).
    21 Pacific Rim countries, including the NAFTA member states, Japan, and China, have been
    discussing a possible pan-Pacific free trade with the help of the Asia Pacific Economic
    Cooperation forum (APEC).
    Closer integration of economies is seen as first step in creating a larger regional market for trade
    and investment. This is good for efficiency, productivity gain, and competitiveness. This is not only
    good for lowering border barriers, but also for reducing other costs and risks of trade and
    investment. Bilateral trading arrangements encourage a shift towards greater market openness.
    These agreements can reduce the risk of reversion towards protectionism, supporting further
    structural adjustment.
    This trend raises fear that in the future the world will be divided into regional trade blocs which
    compete with each other. In this scenario, free trade will exist within blocs but each bloc will
    protect its market with high tariffs. The presence of the EU and NAFTA turns into economic
    fortresses" that shut out foreign producers with high tariff barriers. If this really happens the
    decline in trade might be greater than the benefits of free trade within blocks.
    There are many facts in favour of regional free trade agreements, but there is a certain concern that
    the benefits of regional integration have been overestimated, and that the costs have been ignored.

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