Economic Regionalism

Economic regionalism, institutional arrangements designed to facilitate the free flow of goods and
services and to coordinate foreign economic policies between countries in the same geographic region.
Economic regionalism can be viewed as a conscious attempt to manage the opportunities and constraints
created by the dramatic increase in international economic ties since the end of World War II. Examples
of economic regionalism include free-trade areas, customs unions, common markets, and economic
unions. Several schemes for regional economic integration were established in Europe in the decades
following World War II, including the European Community (1957) which then developed into
the European Union (EU; 1993). After the Cold War the number of these arrangements increased
dramatically throughout the world. The success of organizations and agreements such as the EU,
the North American Free Trade Agreement (NAFTA), and the ASEAN (Association of Southeast Asian
Nations) Free Trade Area (AFTA) depended not only on geographic proximity but also on increasing
economic interdependence, relatively homogenous political structures (e.g., democracy), and shared
cultural and political traditions.

Forms of economic regionalism can be distinguished by the level of integration they involve. The most
basic form is a free-trade area, which eliminates or greatly reduces customs duties between its members.
A customs union creates a greater degree of integration through a common tariff on nonmembers, and
a common market adds to these arrangements by allowing the free movement of capital and labour.
An economic and currency union, which requires a high degree of political consensus between member
states, aims at full economic integration through a common economic policy, a common currency, and the
elimination of all tariff and nontariff barriers.

One way of classifying forms of economic regionalism is by the level of institutional integration they
display. So-called “tight” regionalism is characterized by a high level of institutional integration through
shared norms, principles, rules, and decision-making procedures that limit the autonomy of individual
members. The EU is an example of tight regionalism, having evolved from a limited free-trade area to a
customs union, a common market, and finally an economic and currency union. In contrast, “loose”
regionalism is characterized by the lack of formal and binding institutional arrangements and a reliance
on informal consultative mechanisms and consensus-building measures. The Asia-Pacific Economic
Cooperation (APEC), which was established as a mechanism to foster the creation of a free-trade area, is
a good example of loose regionalism.
In addition to APEC, the EU, and NAFTA, there are nearly 30 active or inactive regional trading
arrangements, including the African Economic Community ASEAN, the Caribbean Community and
Common Market (Caricom), the Central American Common Market (CACM), the Common Market of
the South (Mercosur), the Common Market for Eastern and Southern Africa, and others.

Exercise 1. Complete the words:

Fl… of g… and s… Поток товаров и услуг g… p… Географическая

близость

t… and n… b… Тарифные и e… i… Экономическая

нетарифные барьеры интеграция

c… u… Валютный союз e… u… Экономический союз

p… c… Политическое f…-t… a… Зона свободной

соглашение торговли
 c… c… Единая валюта c… u… Таможенный союз

Exercise 2. Find pairs of antonyms: Shared, tight, solitary, limited, loose, binding, homogenous,
miscellaneous, optional, unrestricted.

Exercise 3. Match the terms with their definitions:

1. A government tax on imports or Free-trade area

exports.

2. A type of trade bloc which is Political consensus

composed of a free trade area with a
common external tariff.

3. A type of trade bloc which is Common currency

composed of a common market with a
customs union.

4. General agreement among the Economic union

members of political groups.

5. A system of money shared by two or Customs union

more countries.

6. A trade policy that does not restrict tariff

imports or exports.

Exercise 4. Combine the words and make up sentences with them:

To facilitate The creation of a free-trade area

To eliminate The flow of goods and services

To foster Tariff and non-tariff barriers

To depend on Geographic proximity

To require Economic policies

 To aim at Cultural and political traditions

To share Economic integration

To impose The autonomy autonomy of

members

To coordinate A political consensus

To limit Customs duties

Exercise 5. Complete the words:

1. It was the smooth introduction and easy acceptance of the co… cu…, the euro.
2. When we join the cu… u…, sales of unpackaged food will be banned.
3. Formally, the CIS countries constitute a f… tr… a… .
4. Our ge… pro… and common maritime borders create a range of shared interests.
5. The Russian Federation fears the imposition of quotas and no… ba…s on Russian goods.
6. The ec… un… between the two countries was dissolved and tensions between them worsened.
7. Globalization has encouraged a fl… of g… and se… from rich countries to poor ones, but not much
in the other direction.
8. The scientific principles of socialist ec… regionalization were first developed in the USS
R. 
Exercise 6. Unscramble the words:

1. Monetary coordination can move gradually towards the ultimate goal of creating a
MONOCM RENCYRUC.
2. Harmonization of the regulation systems and lowering  FIRATF SRABIRER would provide
favourable conditions for cross-border trade.
3. Efforts must continue with a view to reaching a political NUNCOSSES on a taxation system.
4. In a currency ONIUN, individual economies cannot alter their exchange rates.
5. Improved trade conditions will help underdeveloped countries to gain a more efficient WOLF of
DOGOS and services.
6. Indirect taxes include taxes on liquor and cigarettes, and MOSTUSC duties.
7. Some economic  EGRINOS
have formed or are forming in accordance with the territorial social division of labor. 
Exercise 7. Translate into English:

В 1992 году АСЕАН приняла

решение о поэтапном
создании зоны свободной торговли.
Страны создают таможенные
союзы и зоны свободной торговли с
целью экономической интеграции.
Потенциальная выгода
расширения зоны свободной
торговли – это рост экспорта.
Значительный импульс
двусторонним связям придало
вступление Армении в январе 2015
г. в Евразийский экономический
союз (ЕАЭС).
В каждом валютном
союзе существуют регионы-
кредиторы и регионы-должники.
Устранение искусственных
барьеров, сдерживающих поток
товаров и услуг, стимулировало бы
экономику и привело к повышению
производительности и
экономическому росту
Страны-участницы ЕС ввели
тарифные и нетарифные
ограничения и антидемпинговые
меры относительно российского
экспорта.
Мьянме, которая расположена
недалеко от эпицентра, также не
удалось полностью избежать
последствий цунами.
Социально-экономические
реформы могут принести плоды
только в условиях политического
консенсуса.