MAHADI HASANMAHADI HASAN ID 142003906ID 142003906 East Delta University,ChittagongEast Delta University,Chittagong BangladeshBangladesh

Economic Economic Integration and Integration and

levels of levels of integration:integration:Economic integration occurs Economic integration occurs

when two or more countries when two or more countries within a geographic region create within a geographic region create a formal agreement to cooperate a formal agreement to cooperate in ways that facilitate economic in ways that facilitate economic

development and regional development and regional prosperity.prosperity.

We see five levels of We see five levels of economic integration economic integration globally. These are as globally. These are as

belows:belows: 1.Free Trade Area1.Free Trade Area 2. Customs Union2. Customs Union 3.Common Market3.Common Market 4.Economic Union4.Economic Union 5.Political Union5.Political Union

Free Trade Area:Free Trade Area:

A free trade area represents an agreement A free trade area represents an agreement between two or more countries to eliminate between two or more countries to eliminate internal trade barriers.In a free trade area , internal trade barriers.In a free trade area , goods and services can flow freely between goods and services can flow freely between the signatory countries duty-free.Free trade the signatory countries duty-free.Free trade areas help expand markets for companies areas help expand markets for companies doing business within the area. Example of doing business within the area. Example of free trade area is NAFTA and ASEAN . free trade area is NAFTA and ASEAN . NAFTA is an agreement among CANDA, NAFTA is an agreement among CANDA, MEXICO and the USA.MEXICO and the USA.

Customs Union:Customs Union: A Customs Union is an agreement A Customs Union is an agreement

among several nations to open a free among several nations to open a free trade area and a common policy on trade area and a common policy on trade as it relates to nonmembers . trade as it relates to nonmembers .

Example of Customs Union are Example of Customs Union are Andean Community consisting of five Andean Community consisting of five nations of northeast corner of South nations of northeast corner of South America.Mercosur (Southern America.Mercosur (Southern Common Market) of Latin America. Common Market) of Latin America. Which has four members.Which has four members.

Common Market:Common Market:

A Common Market combines the A Common Market combines the advantages of a free trade area and advantages of a free trade area and customs union with a further agreement customs union with a further agreement to eliminate barriers of the factors like to eliminate barriers of the factors like labor , capital, technology across labor , capital, technology across members’ borders. Example of common members’ borders. Example of common market is Mercosur which is the market is Mercosur which is the coalition of South American nations . coalition of South American nations . The predecessor of current Eurpean The predecessor of current Eurpean Union was created as a common market.Union was created as a common market.

Economic Union:Economic Union:An Economic union continues the An Economic union continues the

move toward greater economic move toward greater economic integration and less national integration and less national autonomy by coordinating members autonomy by coordinating members economic policies such montery economic policies such montery policy, fiscal policy, taxation and policy, fiscal policy, taxation and social welfare policy. Most prominent social welfare policy. Most prominent example of economic union is the example of economic union is the current European Union.current European Union.

Political Union:Political Union:

Members of a trading bloc can add a Members of a trading bloc can add a political dimension to their existng political dimension to their existng economic dimension by which they can economic dimension by which they can form a political union. Which creates form a political union. Which creates some form of international government, some form of international government, where members state subordinate where members state subordinate national political interests and decision national political interests and decision making to the will of a multistate making to the will of a multistate political organization. European Union is political organization. European Union is the such political Union.the such political Union.