Economic integration and levels of integration

1. MAHADI HASANMAHADI HASAN
 ID 142003906ID 142003906
 East Delta University,ChittagongEast Delta University,Chittagong
 BangladeshBangladesh

2. Economic IntegrationEconomic Integration
and levels of integration:and levels of integration:
Economic integration occurs when two orEconomic integration occurs when two or
more countries within a geographic regionmore countries within a geographic region
create a formal agreement to cooperate increate a formal agreement to cooperate in
ways that facilitate economic developmentways that facilitate economic development
and regional prosperity.and regional prosperity.

3. We see five levels of economicWe see five levels of economic
integration globally. These are asintegration globally. These are as
belows:belows:
 1.Free Trade Area1.Free Trade Area
 2. Customs Union2. Customs Union
 3.Common Market3.Common Market
 4.Economic Union4.Economic Union
 5.Political Union5.Political Union

4. Free Trade Area:Free Trade Area:
A free trade area represents an agreement between twoA free trade area represents an agreement between two
or more countries to eliminate internal trade barriers.Inor more countries to eliminate internal trade barriers.In
a free trade area , goods and services can flow freelya free trade area , goods and services can flow freely
between the signatory countries duty-free.Free tradebetween the signatory countries duty-free.Free trade
areas help expand markets for companies doingareas help expand markets for companies doing
business within the area. Example of free trade area isbusiness within the area. Example of free trade area is
NAFTA and ASEAN . NAFTA is an agreement amongNAFTA and ASEAN . NAFTA is an agreement among
CANDA, MEXICO and the USA.CANDA, MEXICO and the USA.

5. Customs Union:Customs Union:
 A Customs Union is an agreement amongA Customs Union is an agreement among
several nations to open a free trade area and aseveral nations to open a free trade area and a
common policy on trade as it relates tocommon policy on trade as it relates to
nonmembers .nonmembers .
 Example of Customs Union are AndeanExample of Customs Union are Andean
Community consisting of five nations ofCommunity consisting of five nations of
northeast corner of South America.Mercosurnortheast corner of South America.Mercosur
(Southern Common Market) of Latin America.(Southern Common Market) of Latin America.
Which has four members.Which has four members.

6. Common Market:Common Market:
A Common Market combines the advantages of aA Common Market combines the advantages of a
free trade area and customs union with a furtherfree trade area and customs union with a further
agreement to eliminate barriers of the factorsagreement to eliminate barriers of the factors
like labor , capital, technology across members’like labor , capital, technology across members’
borders. Example of common market isborders. Example of common market is
Mercosur which is the coalition of SouthMercosur which is the coalition of South
American nations . The predecessor of currentAmerican nations . The predecessor of current
Eurpean Union was created as a commonEurpean Union was created as a common
market.market.

7. Economic Union:Economic Union:
An Economic union continues the move towardAn Economic union continues the move toward
greater economic integration and less nationalgreater economic integration and less national
autonomy by coordinating members economicautonomy by coordinating members economic
policies such montery policy, fiscal policy,policies such montery policy, fiscal policy,
taxation and social welfare policy. Mosttaxation and social welfare policy. Most
prominent example of economic union is theprominent example of economic union is the
current European Union.current European Union.

8. Political Union:Political Union:
Members of a trading bloc can add a politicalMembers of a trading bloc can add a political
dimension to their existng economic dimensiondimension to their existng economic dimension
by which they can form a political union. Whichby which they can form a political union. Which
creates some form of international government,creates some form of international government,
where members state subordinate nationalwhere members state subordinate national
political interests and decision making to the willpolitical interests and decision making to the will
of a multistate political organization. Europeanof a multistate political organization. European
Union is the such political Union.Union is the such political Union.