Economic Integration
Economic integration
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Economic cooperation between countries and co-ordination of their economic policy
Economic integration happens because of the benefits it can possibly occur, and there are different kinds and levels of economic integration.
Preferential Trade Agreement (PTA)
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An agreement between two or more countries to lower trade barriers between each other on particular products.
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There are also bilateral, multilateral, and regional agreements
Trading blocs
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group of countries that have agreed to reduce tariff and other trade barriers, in order to promote free trade and the cooperation between countries
Free Trade Area > Customs Union > Common Market > Monetary Union
Free trade area (FTA)
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An agreement between countries that agree to gradually eliminate trade barriers themselves
Customs union
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Consists a group of countries that fulfills the requirement of a free trade area, and in addition adapts a common policy toward non-member countries
Common market
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Consists within countries that has formed a customs union, but in addition eliminate all restrictions on movements of any factors of production within the common market
Monetary Union
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Occurs when the member countries of a common market adopt a common current and a common central bank for monetary policy. Ex. EU
Advantages of a Trading bloc
Disadvantages of a Trading bloc
Advantages of a Monetary Union
Disadvantages of a Monetary Union
