Economic
integration refers to such kind of economic arrangement among the member
countries, where they co-operate with each other in many ways and eliminate
restrictions on the intra-regional flow of goods, services, capital &
labour.
Level of economic
integration.
Level of
economic integration are those extents by which the countries integrate their
economic operation among them. This includes:
(a)Free trade area: Refers to
those zones where there exist least amount of restriction on trades i.e. no tariff
and non-tariff barrier.
ex-ASEAN,
NAFTA, SAARC
(b)Custom union: The main ideas
about custom union are:
(1)Less or
no restriction will exist at the time of trade between intra-regional countries
(2)The rate
of tariff will be fixed while trading with 3rd country.
(c)Common market: It refers to
the free movement of factors of production such as: Labour, Capital,
Enterprise, Technologies. There will be no restriction, while trading between
intra-regional country also there will be no tariff barrier in the case of
labour & technology movement.
(d)Economic union: It refers to
the situation where there exist a common fiscal & monetary policy between
intra-regional countries.
ex-European
Union
(e)Political union: It is the
highest level of integration on which sometime two country merged with each
other and evolved as one nation.
ex-East
Germany + West Germany = Germany
