Economic Integration Flashcards
What is the definition of economic integration?
Economic integration refers to the policy of reducing or eliminating barriers only among nations joining together (member countries).
What are the different degrees of economic integration?
The degrees of economic integration range from preferential trade arrangements, free trade areas, customs unions, common markets, to economic unions.
What is the degree of economic integration provided by preferential trade arrangements?
Preferential trade arrangements provide lower barriers to trade among member nations than on trade with non-member nations.
What is an example of a preferential trade arrangement?
An example of a preferential trade arrangement is the British Commonwealth Preference Scheme, established in 1932 between the United Kingdom and members of the British Empire
What is the characteristic of free trade areas in terms of trade barriers?
Free trade areas remove all barriers to trade among members, but each nation retains its own barriers to trade with non-members.
Can you provide an example of a free trade area?
An example of a free trade area is the North American Free Trade Agreement (NAFTA), established in 1993 between the United States, Canada, and Mexico.
What is the characteristic of a customs union in terms of trade barriers?
A customs union removes all barriers to trade among its members and harmonizes trade policies toward the rest of the world.
Can you provide an example of a customs union?
An example of a customs union is the European Union (EU), or European Common Market, established in 1957 between West Germany, France, Italy, Belgium, Netherlands, and Luxembourg.
What additional characteristic does a common market have compared to a customs union?
A common market not only removes all barriers to trade among its members and harmonizes trade policies toward the rest of the world but also allows free movement of labor and capital among member nations.
Can you provide an example of a common market?
An example of a common market is the European Union (EU), which achieved common market status in 1993.
What is the distinguishing feature of an economic union compared to other forms of economic integration?
An economic union not only removes all barriers to trade among its members, harmonizes trade policies towards the rest of the world, and allows free movement of labor and capital among member nations but also unifies monetary and fiscal policies of its members.
Can you provide an example of an economic union?
An example of an economic union is Benelux, which was formed after World War II between Belgium, the Netherlands, and Luxembourg (and is now part of the EU)
