ECONOMIC INTEGRATION

ECONOMIC INTEGRATION

1. MODALITIES

   • Integration formulas regional, they pursue a goal more ambitious and specific, its objective is to form a market unique.
   • Multilateral agreements, are signed among many countries in order to gradually eliminate barriers commercial.
   • Bilateral agreement, was signed between the two countries.

2. OBJECTIVES

   • Elimination of the barriers to trade and the free movement of goods, goods and people; the reduction of the costs of transport.
   • Implementation of common politics in different sectors of the economy.
   • They also establish rates or tariffs external countries non-member.
   • Increase trade between the Member countries.
   • Reduce risks arising from situations of uncertainty in the global economy.

3. ¿WHAT IS?

   • It is the process of union of markets which have as objective the formation of economic spaces supranational more competitive and efficient that those of origin.

4. ADVANTAGE

   • The increase in demand as income the consumer, because the free real competition and the new scheme of reduction of costs of the companies that will result in lower prices.
   • Integration promotes the production specialization.
   • With the Elimination of the trade barriers the size of the market grows in large proportions.
   • An increase in weight countries, economic as well as the obtaining of a more robust economy.

5. DISADVANTAGES

   • Integration brings disadvantages to countries with systems production less efficient or lower-level opening, as the elimination of trade barriers means increasing competition among producers and those that are not efficient to run the risk of losing the market.
   • Depending on the level of integration there is loss of sovereignty among the members of the agreement.
   • With the integration, an increase in imports is generated.

6. LEVELS OF ECONOMIC INTEGRATION

   • PREFERENTIAL AGREEMENT
     • These preferential arrangements are contracts for facilitation of trade, the benefits are generally of tariff rate.
   • FREE TRADE AREA
     • It is an agreement between countries that seeks the clearing of barriers to internal trade in order to give freedom to the movement of goods in the area.
   • CUSTOMS UNION
     • It is the agreement between countries that supposes, In addition to removing barriers trade between the member countries, a common tariff policy compared to the rest of countries.
   • COMMON MARKET
     • It is the economic area in which there is free movement of goods and factors of production, as a consequence of the total elimination of controls internal customs and lifting of non-tariff barriers existing.
   • ECONOMIC UNION
     • They are characterized by having an economic policy, fiscal and monetary policy, such policies guarantee harmony between members and create frames of economic stability.
   • FULL ECONOMIC INTEGRATION
     • Full economic integration occurs when they are contemplated within an agreement following requirements: free trade of goods, common external tariff, free mobility of factors, harmonized economic policy and unified economic policy.

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