Module 5
Module 5
Module 5
REGIONAL
INTEGRATIONS
Introduction:-
Regional integration
refers to agreements among
countries in a geographic region to
reduce Tariff barriers to the free
flow of goods, services and factors
of production between each other.
Nature of Economic
Integration:-
The economic integration takes different
forms like free trade area, customs union,
common market and economic union. So that
countries adopt a system of preferential tariffs like
lower rate on duty on import.
The approach towards regional
integration has been increasing throughout the
globe. So The Economic Integration result in
grouping up of smaller economies in to larger and
single economy and market.
Levels of Economic
Integration
Preferential trading Agreement:
A group of countries have a
formal agreement to allow each others
goods and services as to be traded on an
preferential terms. This requires that the
tariffs are reduced between the countries
or the special quotas allow preferential
access for their products
Example :- Agricultural products
Free Trade Area:-
A free trade area is
usually a permanent agreement
between neighboring countries. It
involves the complete removal of
tariffs on goods traded among the
members of the free trade area.
Customs Union :
The custom union
establishes a common trade policy
with respect to non-members. So this
takes the form of a common tariff,
whereby imports from non-members
are subject to the same tariff when
sold to any member countries in a
prescribed formula.
Common Market :
A common market
has no barriers to the trade
among members and has a
common external policy.
Economic Union :
This represents
full integration of the economies
of two or more member countries.
In addition to eliminating internal
trade barriers they adopting
common external trade policies
for the factors of production
among member countries.
Political Union :
A limited form of political
union may exist where tow or more
countries share common decision-
making and have common policies.
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