Economic integration refers to the unification of distinct economies by removing trade barriers between countries, resulting in a single larger economy. Various forms include preferential trade areas, free trade areas, customs unions, common markets, and economic unions, each with differing levels of integration and policy alignment. Benefits of economic integration encompass economies of scale, international specialization, enhanced output quality, job expansion, and improved living standards.

1. ECONOMIC INTEGRATION
Dr.Dhanya Shankar KS
Assistant Professor
Department of Economics
St. Mary’s College, Thrissur

2. Economics integration implies the arrangements that remove
artificial trade barriers between different countries. It means the
unification of distinct economies into a single largest economy.
ECONOMIC INTEGRATION
Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

3. FORMS OF ECONOMIC INTEGRATION
• Preferential trade area
• Free trade area
• Customs union
• Common market
• Economic union
Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

4. Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

5. Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College
• Most loosest form of economic integration
• Member countries lower tariffs on imports from each other and
thereby offer a preferential treatment.
• Member countries retain their own individual tariffs and commercial
policy against outsiders.
Free Trade Area
• Member countries abolish all tariff and other trade restrictions and
enjoy the atmosphere of free trade.
• Member countries retain their own individual tariff and commercial
policy against outsiders.
Preferential Trade Area

6. Customs Union
• member countries abolish all tariffs and other trade restrictions
and enjoy the atmosphere of free trade.
• Member countries adopt a common external tariff and uniform
commercial policy against outsiders
Common Market
• Customs union plus
• Free and integrated movement of goods and factors among the
member countries.
Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

7. Economic Union
• Most advanced form of economic integration common market
plus
• Harmonization and unification of social,economic,monetary,fiscal
and exchange policies.
• Member countries attempt to have a common currency and
banking system.
Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

8. EUROPEAN
UNION(EU)
NAFTA
ASEANSAARC
WTO
ECONOMIC INTEGRATION-EXAMPLES
Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

9. BENEFITS OF ECONOMIC INTEGRATION
• Economies of scale
• International specialization
• Qualitative improvement in output
• Expansion in employment
• Improvements in terms of trade
• Increase in economic efficiency
• Improvements in the living standards.
Economic integration, Dr.Dhanya Shankar KS,St.Mary’s College

10. THANK YOU
Economic integration, Dr.Dhanya sankar,St.Mary’s College