Economic integration

Economic integration

1. Common Union

   • Labour and capital have freedom of movement within the trading area
   • Desire of an Harmonisation of economic policies
   • A customs union shares the revenue from the common external tariff in a predetermined way
   • Third level of economic integration
   • economic policy harmonization

2. Free-trade area

   • Tariffs and quotas removed within the members
   • First level of economic integration
   • Each member impose its own tariffs on others non-members

3. Monetary union

   • Fourth level of economic integration
   • Coutry member share the same currency
   • Free factor mobility within the area
   • Harmonisation of economic policies
   • Common tariffs on imports from outside the agreement area
   • High degree of fiscal union

4. Custom union

   • Free trade within the trading block
   • Common external tariff on goods from outside the block
   • Common trade policy towards every non-member
   • Second level of economic integration

5. Single markets