Economic Integration

Economic Integration

1. What is?

   • The economic integration is an arragement among the nations aimed to reducing trade barriers and to cordinate the monetary and fiscal policies.
     • Stages of the economic integration
       • 1. Preferential trading area: The contries grand preferential terms of trade to each other, it doesn't implies a reduction in trade barriers. Example: ASEAN Free Trade Area (AFTA)
       • 2. Free trade area: The members of the countries eliminate tariffs and quotas on trade inside the area. Example: North America Free Trade Agreement (NAFTA)
       • 3. Customs union: The members adopt a common external traiff of non-members countries. Example: Mercosur
       • 4. Common market: Allows the free movement of labor and capital. Example: European Single Market
         • 5. Economic union: Common market plus harmonization of economic policies. Example: West Africa Economic and Monetary union (WAEMU)
           • 6. Economic and monetary union: Economic union with a shared currency. Example: Eurozone
             • 7. Complete economic integration: The harmonization of fiscal and monetary union. Example: The closest example of this stage is the European Union (EU)
     • Advantages
       • Trade creation: Reduce the trade costs between member countries
         • Employment oportunities: The market expansion create new jobs
           • Agreement and cooperation: Stronger economic promove political cooperation
     • Example
       • The European Union (EU)
         • Represents a economic integration, it include 27 member states in a single market, common currency and cordination of fiscal policies

2. Jerónimo Páramo Samper

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