FORMS OF INTEGRATION

PRESENTED BY :VAISHALI SHARMA LECTURER MBA – IBE

ECONOMIC INTEGRATION

The term Economic Integration has been interpreted in different ways.

FREE TRADE AREA

A FTA’s area is grouping of countries to bring about free trade between them. It abolishes all restrictions on trade among the members but each member is left free to determine its own commercial policy with nonmembers.

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CUSTOM UNION

A CU is a more advanced level of economic integration than the FTA. It is not only eliminates all restrictions on trade among members but also adopts a uniform commercial policy against the non-members.

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COMMON MARKET
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The CM is a step ahead of the Custom Union. A CM allows free movement of labour & capital within the CM , besides having the two characteristics of the Custom Union , namely FTA’s among members & uniform tariff policy towards outsiders.

ECONOMIC UNION

A still more advanced level of integration is the Economic union. Apart from satisfying the conditions of the common market mentioned above , the economic union achieves some degree of harmonisation of national economic policies , through a common central bank unified monetary & fiscal policy etc. For example EU

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ECONOMIC INTEGRATION

The ultimate form is full Economic integration characterized by the completion of the removal of all the barriers to intra –bloc movement of goods & factors , unification of social as well as economic policies and all the members bound by decisions of a super national authority consisting of executives , judicial & legislative branches.

Regional Integration

ORGANISATIONS

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