Regional economic integration refers to cooperation between countries in a particular region to reduce trade barriers and promote economic growth. There are various types of integration arrangements, ranging from free trade areas to economic unions. Free trade areas only remove barriers between members, while customs unions also implement common external trade policies. Common markets and economic unions involve deeper integration, including coordinated economic policies and movement of labor/capital. Regional integration can increase trade and investment opportunities, but may also divert trade away from non-member nations or cause disruptions as production and employment shifts between members.

1. PRESTIGE INSTITUTE OF MANAGEMENT
AND RESEARCH,INDORE
TOPIC :- REGIONAL ECONOMIC INTEGRATION
MBA IB 3 SEM
PRESENTED BY :- KARAN SHARMA
AMAN AWASTHI

2. INTRODUCTION
 Regional economic Integration refers to cooperation between various countries of a
particular region in order to develop that particular area. It includes economic integration of
various trading areas of different countries. It is also known as Regional trade block,
Regional economic forces and Regional grouping.
 A regional trade block is a type of inter-governmental agreement, in which barriers to trade are
reduced or eliminated among participating countries.
 Regional economic integration is a collaborative arrangement between different countries in
order to take advantage of market opportunities and to promote economic growth and stability.
 The goal is to increase cross-border trade and investment and raise living standards.

3. TYPES OF REGIONAL ECONOMIC INTEGRATION
Free trade area:- This is the most basic form of economic cooperation.
Member countries remove all barriers to trade between themselves but
are free to independently determine trade policies with non-member
nations. An example is the North American Free Trade Agreement
(NAFTA). Policies differ greatly against nonmember countries from one
country to another. Countries in a free trade area also establish a
process to resolve trade disputes between members.

4. Customs union:-
This type provides economic cooperation as in a free-trade zone. Barriers to
trade are removed between member countries. The primary difference from the
free trade area is that members agree to treat trade with nonmember countries in
a similar manner. Countries remove all barriers to trade among members but erect
a common trade policy against non-members treat all nonmembers similarly.
Countries might also negotiate as a single entity with other supranational
organizations such as the WTO.

5. COMMON MARKET
Common market:- Countries remove all barriers to trade and the movement
of labor and capital between themselves, but erect a common trade policy
against nonmembers. This type allows for the creation of economically
integrated markets between member countries. Trade barriers are
removed, as are any restrictions on the movement of labor and capital
between member countries. Like customs unions, there is a common trade
policy for trade with nonmember nations.

6. ECONOMIC UNION
Economic union:- Countries remove barriers to trade and the movement of
labor and capital, erect a common trade policy against nonmembers, and coordinate
their economic policies. This type is created when countries enter into an economic
agreement to remove barriers to trade and adopt common economic policies.
Requires members to harmonize their tax, monetary, and fiscal policies, create a
common currency, and concede a certain amount of sovereignty to the supranational
organization. An example is the European Union (EU).

7. BENEFITS
 These agreements create more opportunities for countries to trade
with one another by removing the barriers to trade and investment.
 Regional economic integration significantly contributes to the relatively
high growth rates in the less-developed countries.
 By removing restrictions on labor movement, economic integration
can help in expand of job opportunities.
 Member nations may find it easier to agree with smaller numbers of
countries. Regional understanding and similarities may also facilitate closer
political cooperation.

8. EFFECTS
 The flip side to trade creation is trade diversion. Member countries may
trade more with each other than with nonmember nations. This may mean
increased trade with a less efficient or more expensive producer because it is in a
member country. In essence, regional agreements have formed new trade barriers
with countries outside of the trading block.
 Countries may move production to cheaper labor markets in member countries.
Similarly, workers may move to gain access to better jobs and wages. Sudden shifts in
employment can tax the resources of member countries.
 The trade will be restricted to a region only and dispute will increase
Among all region which will affect the international trade & the small countries
will suffer.