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a. integration as an outcome integration as something static; integration can be
achived when certain criteria are fulfilled
b. integration as a processintegration as a dynamic process; represented by
stages of integration going form FTA to political integration
2. objective
An increase of welfare has been recognized as a main objective of economic
integration. The increase of trade between member states of economic unions is
meant to lead to the increase of the GDP of its members, and hence, to better
welfare.
The Term economic integration has been interpreted in different ways. Some
authors even include social and political integration in economic integration.
As per some authors the mere existence of trade relations between two or
more
independent national economies signifies economic integration.
As per some authors economic integration is a type of an arrangement which
leads to removal of artificial trade barriers for example tariffs between two
or moreindependent economies.
Economic integration is a general term which covers several kinds of
arrangements by means of which two or more independent economies agree
to come
closer economically. By economically integrating themselves in the form of
a union they
would like to discriminate against goods produced by countries of the rest of
the world
lying outside the economic union.
As per Timbergen economic integration is the creation of most desirable
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structure of international economy removing artificial barriers to the
optimum operation and introducing deliberately all desirable elements of
coordination or unification.While
defining the term economic integration he draws a distinction between two
types of
economic integration viz. positive and negative economic integration.
Positive economic
integration refers to bring about reforms in the existing institutional
arrangement,
checking out the neo policy to correct the market imperfections. On the other
hand the
negative economic integration refers to removal of artificial barriers like
tariffs on he
movement of goods among the member countries of the group.
Mr. Balasa defines economic integration as, a process and as a state of
affairs.
As a process it encompasses measures designed to abolish discrimination
between
economic units belonging to different national states; viewed as a state of
affairs, it can
be represented by the absence of various forms of discrimination between
national
economies.
While interpreting the term economic integration he draws a distinction
between
economic integration and economic co-operation. The nature of the
difference is both
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quantitative and qualitative. Co-operation entails action leading to lessen the
severity of
discrimination while economic integration is a process which leads to
adoption of
measures which can be used for the suppression of some form of
discrimination. For
example G.A.T.T. or W.T.O. are the examples of cooperation. It is an
agreement
between the member countries of the world about the trade policies to be
pursued in
order to intensity the volume of trade among the member countries of the
world while
removal of trade barriers the tariffs and other non-tariff barrier is an example
of
economic integration.
Causes of popularity
Now a days economic integration is becoming more popular because of the
mutual benefits which spring up from economic integration. United we
stand divided we
fall. In economic integration the economic activities of the member
countries are
harmonized, co-ordinated and unitedly operated.
Following are the reasons of the popularity of economic integration:-
i) Widening of market:- By regional grouping or integration the domestic
market gets
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widened. There happens to be a move from domestic market to a regional
market.
ii) Economies of scale:- Due to regional integration or grouping production
takes place
at a very large scale due to specialization. Due to specialization economies
of scale
both internal and external spring up.
iii) High degree of specialization:- The regional integration leads to
widening of market,
large scale production, economies of scale (internal and external) which
paves the
way for a very high degree of specialization. A micro-level specialization ie
specialization amongst the specialized items takes place which gets referred
to as
high degree specialization.
iv) Optimum reallocation of resources:- Assuming full employment when
the market
widens due to economic integration in order to cope up with the increased
demand
the country concerned has to reallocate resources ie resources are withdrawn
from
high cost production and put in use to the low cost production.
v) Increase in the volume of trade: Due to reallocation of factors of
production the
volume of production increases ie the volume of production doubles.
vi) Changes in the cost price structure:- As per the modern theory of foreign
trade due
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but also quality of product increase due to which life style changes.
xi) Increase in economic development:- The increase in the volume of trade
leads to
increase in per capita income and the standard of living of the people. It is an
indication of increase in the rate of economic growth of the member
countries.
xii) Overall increase in welfare:- All the above mentioned factors, pave the
way for
increasing the general welfare and well being of the people of the member
countries.
2.0 OBJECTIVES
1. To understand the term Economic Integration
2. To know the causes of popularity of Economic Integration
3. To understand the various types of Economic Integration
4. To know the concepts of Protection and Trade Liberalism
5. To understand the meaning and types of Regional Trade Blocks
6. To know about European Union
7. To know about North American Free Trade Agreement
LEVELS :-
Free Trade Area
Free Trade Areas (FTAs) are created when two or more countries in a region agree to
reduce or eliminate barriers to trade on all goods coming from other members. TheNorth
Atlantic Free Trade Agreement(NAFTA) is an example of such a free trade area, and
includes the USA, Canada, and Mexico.
Customs Union
http://www.nafta-sec-alena.org/en/view.aspxhttp://www.nafta-sec-alena.org/en/view.aspxhttp://www.nafta-sec-alena.org/en/view.aspxhttp://www.nafta-sec-alena.org/en/view.aspxhttp://www.nafta-sec-alena.org/en/view.aspxhttp://www.nafta-sec-alena.org/en/view.aspx8/11/2019 Eco. Integration Rough
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A customs union involves the removal of tariff barriers between members, plus the
acceptance of a common (unified) external tariff against non-members. This means that
members may negotiate as a single bloc with 3rd
parties, such as with other trading blocs,
or with theWTO.
Common Market
A common marketis the first significant step towards full economic integration, and
occurs when member countries trade freely in all economic resources not just tangible
goods. This means that all barriers to trade in goods, services, capital, and labour are
removed. In addition, as well as removing tariffs, non-tariff barriers are also reduced and
eliminated. For a common market to be successful there must also be a significant level
of harmonisation of micro-economic policies, and common rules regarding monopoly
power and other anti-competitive practices. There may also be common policies affecting
key industries, such as theCommon Agricultural Policy(CAP) and Common Fisheries
Policy (CFP) of the European Single Market (ESM).
Economic Union
Economic Union is a term applied to a trading bloc that has both a common market
between members, and a common trade policy towards non-members, but where
members are free to pursue independent macro-economic policies.
Forms of economic integration
The economic integration of several countries or states may take a variety of forms.
The term covers preferential tariffs, free-trade associations, customs unions, common
markets, economic unions, and full economic integration.
The parties to a system of preferential tariffslevy lower rates of duty on imports from
one another than they do on imports from third countries.
In free-trade associationsno duty is levied on imports from other member states, but
different rates of duty may be charged by each member on its imports from the rest of
the world.
A further stage is the customs union, in which free trade among the members is
sheltered behind a unified schedule of customs duties charged on imports from the
rest of the world.
http://www.economicsonline.co.uk/Global_economics/The_WTO.htmlhttp://www.economicsonline.co.uk/Global_economics/The_WTO.htmlhttp://www.economicsonline.co.uk/Global_economics/The_WTO.htmlhttp://www.economicsonline.co.uk/Global_economics/Common_Agricultural_Policy.htmlhttp://www.economicsonline.co.uk/Global_economics/Common_Agricultural_Policy.htmlhttp://www.economicsonline.co.uk/Global_economics/Common_Agricultural_Policy.htmlhttp://www.economicsonline.co.uk/Global_economics/Common_Agricultural_Policy.htmlhttp://www.economicsonline.co.uk/Global_economics/The_WTO.html8/11/2019 Eco. Integration Rough
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A common marketis an extension of the customs union concept, the additional feature
being that it provides for the free movement of labour and capital among the
members.
The term economic uniondenotes a common market in which the members agree to
harmonize their economic policies generally.
Finally, total economic integrationimplies the pursuit of a common economic policy by
the political units involved.
Advantages Of Economic IntegrationTrade Creation: Member countries have (a) wider selection of goods
and services not previously available; (b) acquire goods and
services at a lower cost after trade barriers due to lowered tariffs
or removal of tariffs (c) encourage more trade between member
countries the balance of money spend from cheaper goods and
services, can be used to buy more products and services
Political Cooperation:A group of nation can have significantly
greater political influence than each nation would have
individually. This integration is an essential strategy to address
the effects of conflicts and political instability that may affect the
region. Useful tool to handle the social and economic challenges
associated with globalization
Employment Opportunities:As economic integration encourage
trade liberation and lead to market expansion, more investment
into the country and greater diffusion of technology, it create
more employment opportunities for people to move from one
country to another to find jobs or to earn higher pay. Forexample, industries requiring mostly unskilled labor tends to shift
production to low wage countries within a regional cooperation
Disadvantages Of Economic Integration
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Creation Of Trading Blocs: It can also increase trade barriers
against non-member countries.
Trade Diversion: Because of trade barriers, trade is diverted from a
non-member country to a member country despite the
inefficiency in cost. For example, a country has to stop trading
with a low cost manufacture in a non-member country and trade
with a manufacturer in a member country which has a higher
cost.
National Sovereignty: Requires member countries to give up some
degree of control over key policies like trade, monetary and fiscal
policies. The higher the level of integration, the greater the
degree of controls that needs to be given up particularly in the
case of a political union economic integration which requires
nations to give up a high degree of sovereignty.
Advantages Of Economic Integration
Trade Creation: Member countries have (a) wider selection of goods and services not previously
available; (b) acquire goods and services at a lower cost after trade barriers due to lowered tariffs
or removal of tariffs (c) encourage more trade between member countries the balance of money
spend from cheaper goods and services, can be used to buy more products and services
Greater Consensus:Unlike WTO with hugh membership (147 countries), easier to gain consensus
amongst small memberships in regional integration
TYPES OF ECONOMIC INTEGRATION :-
Economic cooperation or integration may take any one or a combination of any of the following
forms:
(i) Economic Union, (ii) Customs Union, (iii) Free Trade Area, (iv) Sectoral or Partial Integration, (v)
Preferential Trading, (vi) Long-term Trade Agreements.
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These different forms of integration visualise different degrees of economic cooperation in the
descending order.
An Economic Union is a case of absolute integration. It implies complete economic integration of a
group of countries. There is, thus, free mobility of factor resources and commodities in such a union.
The economic activities and policies (fiscal, monetary and general) of the member nations areperfectly harmonised, coordinated and collectively operated. Benelux (Belgium, the Netherlands and
Luxembourg) and the European Common Market (ECM) are such economic unions.
An economic union is, therefore, commonly referred to as a common market.
A Customs Union involves a common external tariff against non-member countries, while within the
union itself there is unrestricted free trade. From the customs union gradually, complete economic
union is evolved. For instance in the case of ECM, the Rome Treaty (1958) laid the basis of a customs
union of the six member countries, leading finally to an economic union by 1970.
A Free Trade Area involves the abolition of all trade restrictions within the group, but each individual
country in the group is free to maintain any sort of relation with the non-member countries.
Countries in a free trade area have, thus, no common external tariffs to maintain.
The European Free Trade Association (EFTA), 1959, and the Latin American Free Trade Association
(LAFTA) serve as examples of such free trade areas.
A Sectoral of Partial Integration refers to the establishment of a common market in a given product
or products. The European Coal and Steel Community (ECSC), 1952, is such a sectoral integration by
which members of the "Inner Six" have created a common market in coal and steel products within
their territories.
Preferential Trading is a sort of trading technique involving various measures for promoting trade
among the members of the group.
Generally, agreements may be entered into to ensure to each contracting party a favoured treatment
as compared to others. Such an agreement is usually referred to as the most-favoured nation
agreement. It may relate to commerce, industry and navigation, or it may relate either to
commodities or merely to customs duties. Ordinarily, the most-favoured nation clause is bilateral in
operation.
The trade liberalisation programme of the OEEC can be regarded as an example of preferential
trading. In 1950, the Code of Liberalisation was adopted by the members of the OEEC in order to
increase intra-European trade.
The Long-term Trade Contract is a type of bilateral arrangement, either in a single product or many
products of trade between any two nations. Its minimum duration may be an year or more. For
instance, India had once entered into a trade agreement with Japan for the supply of iron ore for a
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period of five years. Such an agreement tends to stabilise the export of a given product or products of
the country concerned.
CASE STUDY :-
The Role of Economic Integration in Asia
Kazakhstans foreign minister on the Asian Development Bank and the needto improve the regions physical links.
ByErlan Idrissov
May 03, 2014
http://thediplomat.com/2014/05/the-role-of-economic-integration-in-asia/
When the Asian Development Bank (ADB) was set up nearly half a century ago topromote economic development across the continent, not even the greatest optimistscould have dreamt of the scale of change and rate of progress we have seen. After all, in1966, Vietnam was the scene of a terrible conflict. China was firmly outside the globaleconomy. The Soviet Union and the West were still locked in the Cold War. Japan wasthe only major economic power in the region. Hundreds of millions of people wereseemingly trapped in poverty.
As finance ministers, central bank governors, and industry leaders gather in Astana,Kazakhstan, for the ADBs annual meeting, the picture could hardly be more different or
more positive. It is peace, prosperity and potential which are the hallmarks of Asia in the21st century.
China, the worlds second biggest economy, is driving global growth. India, Indonesia
and South Korea have joined China and Japan in the G20 group of largest economies.Growth is strong across the continent with millions lifted out of poverty. Asia nowproduces up to 30 percent of the world GDP and its share is expected to reach 50
percent by 2050.Kazakhstan, which did not exist as an independent country even a generation ago letalone when the ADB was established, is an example of the speed of change and directionof travel. Born out of the break-up of the Soviet Union, it is already among the50th biggest global economies with dramatic improvements in living standards for itscitizens.
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But despite this remarkable progress and predictions that this will be the AsianCentury, the continent still faces many challenges. Not all countries, nor all parts of
society, have shared in the fast pace of development. Asia remains home to two thirds ofthe worlds poor. Afghanistan is one of a number of countries still struggling withconflict.
We are also seeing the rapid pace of development putting increasing pressure onsocieties and resources. Kazakhstan itself is working hard to rebalance its economy awayfrom its natural resource wealth to build a successful and resilient future.
Delivering this goal for Kazakhstan and Asia as a whole and making sure all countriesand sections of society share in this prosperity depends critically on improved regionaleconomic integration. And this cant be achieved without tackling the barriers thatprevent the flow of trade across our continent and to the wider world.
It is why the decision by the ADB to focus this years annual meeting on improving
physical links transport and infrastructure is so important. At the heart of thisstrategy is the New Silk Road, which will enable trade to flow easily east and west just asit did centuries ago.
Chinas PresidentXi Jinping last year underlined the crucial role this development willplay in spreading prosperity. He outlined his vision for an economic belt from thePacific Ocean to the Baltic Sea, representing a market of unparalleled size and potential.This new Silk Road would help spread prosperity across the continent and give hope tocountries like Afghanistan.
With the withdrawal of international forces at the end of this year, economic prosperityand opportunity will be critical to building a stable Afghanistan. The development ofregional infrastructure can help integrate and open up the country to Asias growth.
Today, initiatives are already underway to strengthen connectivity and trade along thisancient route. New mega-projects, such as the Western China-Western Europe highway,which goes through Kazakhstan, will cut 45 days off delivery times between China andEurope. As part of this, Kazakhstan is upgrading more than 2,700 km of road in thesouth of the country to help reduce transport times and cut costs.
Such large-scale projects involve long-term vision and cross-regional cooperation. They
are built on shared ambitions and strong bilateral partnerships. Kazakhstansrelationship with China is an example of one of the building blocks in place.
Chinese-Kazakh trade has been growing strongly and is expected to reach $40 billion by2015. Our two countries are increasingly cooperating on cross-border energy andtransport projects whose positive impact will be felt far beyond our borders.
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But right across the continent, we need to find the confidence and courage to worktogether to remove barriers, whether physical or invisible, to trade and cooperation. Wehave the goal of joining the worlds top 30 economies the core objective of ourKazakhstan 2050 development strategy. But we know we cannot achieve this alone.
The ADB will be critical in realizing this bold ambition, through its work both withinKazakhstan and across Central Asia, where projects on water, energy, poverty reductionand business development among many others are confronting issues that directlyimpact the security and stability of the region. Kazakhstan intends to continue and growits support for the ADB and act as a reliable partner in its important work throughoutthe region.
It is why we hope the ADB this week in Astana will add renewed energy to efforts toimprove cooperation and connectivity within and beyond Asia. It is key to acceleratinggrowth, raising productivity and unlocking the continents vast potential.
The author is the Minister of Foreign Affairs of Kazakhstan.
Benefits Of Economic integration
Economic integration can be defined as a kind of arrangement where countries get in agreement to
coordinate and manage their fiscal, trade, and monetary policies in order to be mutually benefitted
by them. There are many degrees of economic integration, but the most preferred and popular one is
free trade. In economic integration no country pays customs duty within the integrated area, so it
results in lower prices both for the distributors and the consumers. The ultimate aim of economic
integration is to increase trade across the world. There are many other advantages associated with
this concept. Some of these are:
1.Progress in trade.
All countries that follow economic integration have extremely wide assortment of goods and services
from which they can choose. Introduction of economic integration helps in acquiring goods and
services at much low costs. This is because the removal of trade barriers reduces or removes the
tariffs entirely. Reduced duties and lowered prices save a lot of spare money with countries which
can be used for buying more products and services.2.Ease of agreement.
When countries enter into regional integration, they easily get into agreements and stick to them for
long periods of time.
3.Improved political cooperation.
Countries entering economic integration form groups and have greater political influence as
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compared to influence created by a single nation. Integration is a vital strategy for addressing the
effects of political instability and human conflicts that might affect a region.
4.Opportunities for employment.
The various options available in economic integration help to liberalize and encourage trade. This
results in market expansion due to which high amount of capital is invested in a countrys
economy. This creates higher opportunities for employment of people from all over the world. They
thus move from one country to another in search of jobs or for earning higher pay.
5.Beneficial for financial markets.
Economic integration is extremely beneficial for financial markets as it eases firm to borrow finances
at low rate if interest. This is because capital liquidity of larger capital market increases and the
resultant diversification effect reduces the risks associated with high investment.
6.Increase in Foreign Direct Investments.
Economic integration helps to increase the amount of money in Foreign Direct Investment (FDI).
Once firms start FDI, through new operations or by merger, takeover, and acquisition, it becomes a
international enterprise.
Thus economic integration is a win-win situation for all the firms, people and the economies involved
in the process. Is has become a preferred strategy for most countries of the world.
http://www.britannica.com/EBchecked/topic/178433/economic-integration
economic integration,process in which two or morestatesin a broadly defined geographic area
reduce a range oftradebarriers to advance or protect a set of economic goals.
The level of integration involved in aneconomic regionalistproject can vary enormously from loose
association to a sophisticated, deeply integrated, transnationalized economic space. It is in its
political dimension that economic integration differs from the broader idea of regionalism in general.
Although economic decisions go directly to the intrinsically political question of resource allocation,
an economic region can be deployed as a technocratic tool by the participatinggovernmentto
advance a clearly defined and limited economic agenda without requiring more than minimal political
alignment or erosion of formal statesovereignty.The unifying factor in the different forms of
economic regionalism is thus the desire by the participating states to use a wider, transnationalized
sense of space to advance national economic interests
http://www.britannica.com/EBchecked/topic/178433/economic-integrationhttp://www.britannica.com/EBchecked/topic/178433/economic-integrationhttp://www.britannica.com/EBchecked/topic/563762/statehttp://www.britannica.com/EBchecked/topic/563762/statehttp://www.britannica.com/EBchecked/topic/563762/statehttp://www.britannica.com/EBchecked/topic/601624/tradehttp://www.britannica.com/EBchecked/topic/601624/tradehttp://www.britannica.com/EBchecked/topic/601624/tradehttp://www.britannica.com/EBchecked/topic/766752/economic-regionalismhttp://www.britannica.com/EBchecked/topic/766752/economic-regionalismhttp://www.britannica.com/EBchecked/topic/766752/economic-regionalismhttp://www.britannica.com/EBchecked/topic/240105/governmenthttp://www.britannica.com/EBchecked/topic/240105/governmenthttp://www.britannica.com/EBchecked/topic/240105/governmenthttp://www.britannica.com/EBchecked/topic/557065/sovereigntyhttp://www.britannica.com/EBchecked/topic/557065/sovereigntyhttp://www.britannica.com/EBchecked/topic/557065/sovereigntyhttp://www.britannica.com/EBchecked/topic/557065/sovereigntyhttp://www.britannica.com/EBchecked/topic/240105/governmenthttp://www.britannica.com/EBchecked/topic/766752/economic-regionalismhttp://www.britannica.com/EBchecked/topic/601624/tradehttp://www.britannica.com/EBchecked/topic/563762/statehttp://www.britannica.com/EBchecked/topic/178433/economic-integration8/11/2019 Eco. Integration Rough
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Forms of economic integrationAlthough there are many different forms of economic integration, perhaps the most convenient way to order
the concept is to think of a continuum that ranges from loose association at one end to an almost completemerging of national economies at the other end. Although it is far from a given that positive experiences in the
simpler forms of economic integration will lead to a deepening of the process to increasingly integrated shared
economic spaces, the more-complex forms incorporate and are founded on the substantive elements of theearlier forms. The significant point is that although economic integration is explicitly framed by trading
relationships, it acquires an increasingly political character as it reaches deeper forms.
Simple free-trade areaThe most basic type of economic integration is a simple free-trade area. In this form, attention is focusedalmost exclusively on a reduction of thetariffsandquotasthat restrict trade. Emphasis is placed almost
entirely on increasing the exchange of goods. The articulation of transnationalized production chains, trade in
services, labour mobility, and more-sophisticated forms of economic integration are not an explicit goal and
emerge as merely tangential to the primary goal of securing access to foreignmarketsfor domestic firms.
Second-generation free-trade areaIn a second-generation free-trade area, the basic nature of simplefree tradeis expanded to include trade in non-
goods such as services. Where a simple free-trade area need only address the question of tariffs and quotas, the
trade in services and a widening of trade in goods raises questions of regulatory convergence and theharmonization of rules of operation and governance. At this stage, attention needs to be turned to such things
as the transferability of professional certifications as well as questions of labour mobility, particularly for the
highly skilled professions such as legal,accounting,technology,and medical services. The increased
interdependence between the participating economies that comes with expanded trade in all economic areas
and a measure of regulatory convergence can lead to an increased distribution of production chains across
national boundaries.
Customs unionAs national production structures transnationalize across the regional space, the next stage is to deepen
regulatory harmonization to present a common stance to the extra-regional market. The result is the formation
of acustoms unionrelying upon a common external tariff. One of the key attractions of this regulatoryconvergence between participating economies is that it reduces the challenges of monitoring and taxing
external inputs that are used to produce goods and services that circulate within the region. Implicit in theadoption of a common external tariff is a further harmonization of national rules and regulations, particularly
those relating to the control and flow of external trade into the regional economic space.
Common marketThe idea of acommon marketgrows from the possibilities presented by the adoption of a common external
tariff. As trade flows increase and factor inputs imported into the integrating economies begin to circulate
freely, production chains crossing the intra-regional national boundaries begin to form. This results in
sustained pressure to reduce the costs of transporting finished and semi-finished goods between the states
participating in the integration project. The solution is the harmonization of border procedures, which in its
ultimate form leads to the virtual elimination of national boundaries as internal barriers to trade and the
formation of a free-flowing regional economic space. A concomitant change with this complete opening of
internal trade is a liberalization of labour mobility, allowing the inhabitants of one member state to work in all
the other member states of the region.Monetary unionWith the evolution of a common market and the concomitant surge in intra-regional trade comes a new source
of expenses for business: the costs of transnational transactions. Even though borders may be open to the freetransit of goods and services, the need to constantly engage in foreign exchange operations to settle payments
as well as the differing relative costs caused by different national economic policies impose a constant
financial and administrative expense on firms operating within the region. The solution and next stage in theintegration progression is some form of monetary union, be it through an agreed fixing of relative exchange
rates or the more commonly discussed adoption of a commoncurrency.At this point, the economic aspects of
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integration also begin to take on a strong political flavour. Adoption of a common currency or monetary policy
by all members of the project also requires a strong convergence in macroeconomic policy, which imposes
external restraints on the domestic fiscal and expenditure policies that a government may pursue. The result is
a gradual blurring of the political as well as economic lines that separate the states participating in the
integration project.
Economic community orunionIn an economic community or union, the logic of common external tariffs, regulatory approximation, andharmonization of macroeconomic policy is taken to its full conclusion through the construction of an
overarching governance framework that imposes a common economic policy system on all countries in theregion. In effect, the member states surrender a significant degree of economic sovereignty to the whole in the
expectation of significantly expanded opportunities presented by a much larger, fully integrated economic
space facilitating the full mobility of finished products, factors of production, and labour. The harmonizationof regulations and procedures is facilitated through the creation of an overarching legislative and legal system
that trumps national laws and rules and also ensures that economic actors will face the same treatment
throughout the region.
Justifications of economic integrationThe extent to which a region will deepen its economic integration and adopt the characteristics of a
supranational state is partially influenced by the factors prompting states to start the regionalization process.Four broad reasons for pursuing economic integration can be identified.
EU
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SpainPortugal
France
Germany
EnglandIreland
Sweden
Finland
Denmark
Italy
Greece
Austria
Belgium
Netherlands
The EURO area
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EU def.:-
Definition of 'European Union - EU'
A group of European countries that participates in the world economy as one
economic unit and operates under one official currency, the euro. The EU's goal
is to create a barrier-free trade zone and to enhance economic wealth by
creating more efficiency within its marketplace.
Investopedia explains 'European Union - EU'
The current formalized incarnation of the European Union was created in 1993
with 12 initial members. Since then, many additional countries have since
joined. The EU has become one of the largest producers in the world, in terms
of GDP, and the euro has maintained a competitive value against the U.S.
dollar.
EU and non-EU members must agree to many legal requirements in order to
trade with the EU member states.
Current State:The European Union (EU) and the Euro-zone:
27members in EU and 15 members in the euro-zone excluding U.K.,
Sweden and Denmark but including Malta, Cyprus and Slovenia. 27
members are Germany, France, Italy, Belgium, Netherlands,
Luxembourg, Ireland, UK, Denmark, Greece, Portugal, Spain, Austria,
Finland, Sweden, Czech Rep., Estonia, Hungary, Poland, Slovenia,
Latvia, Lithuania, Slovak Rep., Cyprus, Malta, Bulgaria (2007),
Romania (2007).
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Hence, there are currently 16 European Monetary Union (EMU) members,
Denmark and the UK negotiated opt-out clauses while Sweden postponed
entry into the Euroland. Slovenia adopted the Euro on January 1st, 2007 and
Malta and Cyprus on 2008. Slovakia adopted the Euro on January 1st
, 2009.
3 countriesin the pre-accession state: These are Croatia, Turkey and
Macedonia.
NAFTA :-
The North American Free Trade Agreement(NAFTA; French:Accord de libre-change nord-
amricain,ALNA; Spanish: Tratado de Libre Comercio de Amrica del Norte, TLCAN) is anagreement signed byCanada,Mexico,and theUnited States,creating a trilateralrules-basedtrade
blocinNorth America.The agreement came into force on January 1, 1994. It superseded
theCanadaUnited States Free Trade Agreementbetween the U.S. and Canada.
NAFTA has two supplements: theNorth American Agreement on Environmental
Cooperation(NAAEC) and the North American Agreement on Labor Cooperation (NAALC).
In terms of combinedpurchasing power parityGDPof its members, as of 2013the trade bloc is
thelargest in the worldas well as by nominal GDP comparison.
The North American Free Trade Agreement(NAFTA; French:Accord de libre-change nord-amricain,ALNA; Spanish: Tratado de Libre Comercio de Amrica del Norte, TLCAN) is an
agreement signed byCanada,Mexico,and theUnited States,creating a trilateralrules-basedtrade
blocinNorth America.The agreement came into force on January 1, 1994. It superseded
theCanadaUnited States Free Trade Agreementbetween the U.S. and Canada.
NAFTA has two supplements: theNorth American Agreement on Environmental
Cooperation(NAAEC) and the North American Agreement on Labor Cooperation (NAALC).
In terms of combinedpurchasing power parityGDPof its members, as of 2013the trade bloc is
thelargest in the worldas well as by nominal GDP comparison.
Impact
NAFTA's effects, both positive and negative, have been quantified by several economists, whose
findings have been reported in publications such as theWorld Bank's Lessons from NAFTA for Latin
America and the Caribbean,[11]NAFTA's Impact on North America,[12]and NAFTA Revisitedby the
Institute for International Economics.[13]
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as theUnited States,Canada,Australia,andNew Zealand.This plan was opposed and strongly
criticized byJapanand the United States.
The first APEC Economic Leaders' Meeting occurred in 1993 whenU.S. PresidentBill Clinton,after
discussions with Australian Prime MinisterPaul Keating,invited theheads of governmentfrom
member economies to a summit onBlake Island.He believed it would help bring the stalledUruguay
Roundof trade talks back on track. At the meeting, some leaders called for continued reduction of
barriers to trade and investment, envisioning a community in the Asia-Pacific region that might
promote prosperity through cooperation. The APEC Secretariat, based in Singapore, was
established to coordinate the activities of the organization.
During the meeting in 1994 inBogor,Indonesia,APEC leaders adopted the Bogor Goals that aim for
free and open trade and investment in the Asia-Pacific by 2010 for industrialized economies and by
2020 for developing economies. In 1995, APEC established a business advisory body named the
APEC Business Advisory Council (ABAC), composed of three business executives from each
member economy.
Member economies
APEC currently has 21 members, including most countries with a coastline on thePacific Ocean.
However, the criterion for membership is that the member is a separate economy, rather than astate. As a result, APEC uses the term member economiesrather than member countriesto refer
to its members. One result of this criterion is that membership of the forum
includesTaiwan(officially the Republic of China, participating under the name "ChineseTaipei") alongsidePeople's Republic of China(seeCross-Strait relations), as well asHong Kong,
which entered APEC as a British colony but it is now aSpecial Administrative Region of the
People's Republic of China.APEC also includes three official observers:ASEAN,thePacificIslands Forumand thePacific Economic Cooperation Council.[1]
Member economy (name as used
in APEC)
Date of
accession
Australia November 1989
Brunei Darussalam November 1989
Canada November 1989
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Member economy (name as used
in APEC)
Date of
accession
Indonesia November 1989
Japan November 1989
South Korea November 1989
Malaysia November 1989
New Zealand November 1989
Philippines November 1989
Singapore November 1989
Thailand November 1989
United States November 1989
Chinese Taipei[6] November 1991
Hong Kong[7] November 1991
People's Republic of China November 1991
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Member economy (name as used
in APEC)
Date of
accession
Mexico November 1993
Papua New Guinea November 1993
Chile November 1994
Peru November 1998
Russia November 1998
VietnamNovember 1998
ASEAN
Association of Southeast Asian NationsFrom Wikipedia, the free encyclopedia
(Redirected fromASEAN)
Association of Southeast Asian Nations
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Flag Emblem
Motto:
"One Vision, One Identity, One Community"[1]
Anthem:The ASEAN Way
MENU
0:00
Headquarters Jakarta,Indonesiaa
Working language English[show]
Membership
10 states[show]
2 observers[show]
Leaders
- Secretary General L Lng Minh[2]
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- SummitPresidency Burma(Myanmar)[3]
Establishment
- Bangkok Declaration 8 August 1967
- Charter 16 December 2008
Area
- Total 4,479,210.5 km2
2,778,124.7 sq mi
Population
- 2011 estimate 602,658,000
- Density 135/km2
216/sq mi
GDP(PPP) 2011 estimate
- Total US$ 3.574 trillion[4]
- Per capita US$ 5,930
GDP(nominal) 2013 estimate
- Total US$ 2.403 trillion
- Per capita US$ 3,909
HDI(2013) 0.669b
medium
Currency 10 currencies[show]
Time zone ASEAN(UTC+9to+6:30)
Calling code 10 codes[show]
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Internet TLD 10TLDs[show]
Website
www.asean.org
a. Address: Jalan Sisingamangaraja No.70A,South Jakarta.
b. Calculated usingUNDPdata from member states.
Wikisourcehas original
text related to this article:
Bangkok Declaration
The Association of Southeast Asian Nations[5](ASEAN/si.n/ -see-ahn,[6]/zi.n/ -
zee-ahn)[7][8]is a political and economic organisation of ten countries located inSoutheast Asia,
which was formed on 8 August 1967 byIndonesia,Malaysia,thePhilippines,SingaporeandThailand.[9]Since then, membership has expanded toincludeBrunei,Cambodia,Laos,Myanmar (Burma)andVietnam.Its aims includeacceleratingeconomic growth,social progress,sociocultural evolutionamong its members,protection of regional peace and stability, and opportunities for member countries to discussdifferences peacefully.[10]
ASEAN covers a land area of 4.46 million km, which is 3% of the totallandarea of Earth, and has apopulation of approximately 600 million people, which is 8.8% of the world's population. The seaarea of ASEAN is about three times larger than its land counterpart. In 2012, its combinednominalGDPhad grown to more than US$2.3 trillion.[11]If ASEAN were a single entity, it would rank as the
sixth largest economy in the world, behind the US, China, India, Japan and Germany.
History[edit]
See also:Member states of the Association of Southeast Asian Nations
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A clickableEuler diagramshowing the relationships between various Asianregional organisationsvde
The member states of ASEAN
ASEAN was existing before by an organisation called theAssociation of Southeast Asia(ASA), agroup consisting of the Philippines, Malaysia and Thailand that was formed in 1961. The bloc itself,
however, was inaugurated on 8 August 1967, whenforeign ministersof five countriesIndonesia,
Malaysia, the Philippines, Singapore, and Thailandmet at the Thai Department of Foreign Affairs
building inBangkokand signed the ASEAN Declaration, more commonly known as theBangkok
Declaration.The five foreign ministersAdam Malikof Indonesia,Narciso Ramosof the
Philippines,Abdul Razakof Malaysia,S. Rajaratnamof Singapore, andThanat Khomanof Thailand
are considered the organisation's Founding Fathers.[12]
The motivations for the birth of ASEAN were so that its members governing elite could concentrate
onnation building,the common fear of communism, reduced faith in or mistrust of external powers in
the 1960s, and a desire for economic development.
The block grew whenBrunei Darussalambecame the sixth member on 8 January 1984, barely a
week after gaining independence on 1 January.[13]
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liberalization is a process whereby structural reforms are initiated in the
economy.
Economic liberalization involves the following major changes:-
i) changes in the outlook
ii) Technological up gradation
iii) Changes in trade, fiscal, monetary, price and industrial policies
iv) Opening the economy for foreign investment
v) Delicensing and enhancing export incentives.
Economic liberalization attempts to remove restrictions and make an
economy
global in its approach. Economic liberalization and globalization go hand in
hand.
Economic liberalization facilitates global integration of open economies.
After Second World War, countries of the world followed the policy of
protection
so as to rehabilitate the war shattered economies. But it led to adoption of a
retaliatory
policy on the part of other countries of the world. It is called as the policy of
tit for tat
which led to the lowering down of the volume of trade, lowering down of
competitiveness, efficiency, income and employment. Hence all these things
triggered
off the wave for speedy liberalization by reducing tariff barriers. It paved the
way for
economic integration among the countries of the region and also among the
countries of
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the world. When economic integration takes place among the regional
economic
integration. On the other hand when economic integration takes place among
the
countries of the world it gets referred to as multilateral economic integration.
E.U,
NAFTA, ASEAN, OPEC, SAARC are some of the glaring examples of
regional
economic examples while GATT which later on got merged into WTO are
the glaring
examples of multilateral economic integration. A very important point to be
noted in
connection with economic integration is that economic integration entails
some extent of
political integration too if not full political integration.
2.1.1 CONCEPT
The Term economic integration has been interpreted in different ways. Some
authors even include social and political integration in economic integration.
As per some authors the mere existence of trade relations between two or
more
independent national economies signifies economic integration.
As per some authors economic integration is a type of an arrangement which
leads to removal of artificial trade barriers for example tariffs between two
or more
independent economies.
Economic integration is a general term which covers several kinds of
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arrangements by means of which two or more independent economies agree
to come
closer economically. By economically integrating themselves in the form of
a union they
would like to discriminate against goods produced by countries of the rest of
the world
lying outside the economic union.
As per Timbergen economic integration is the creation of most desirable
structure of international economy removing artificial barriers to the
optimum operation and introducing deliberately all desirable elements of
coordination or unification.While
defining the term economic integration he draws a distinction between two
types of
economic integration viz. positive and negative economic integration.
Positive economic
integration refers to bring about reforms in the existing institutional
arrangement,
checking out the neo policy to correct the market imperfections. On the other
hand the
negative economic integration refers to removal of artificial barriers like
tariffs on he
movement of goods among the member countries of the group.
Mr. Balasa defines economic integration as, a process and as a state of
affairs.
As a process it encompasses measures designed to abolish discrimination
between
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economic units belonging to different national states; viewed as a state of
affairs, it can
be represented by the absence of various forms of discrimination between
national
economies.
While interpreting the term economic integration he draws a distinction
between
economic integration and economic co-operation. The nature of the
difference is both
quantitative and qualitative. Co-operation entails action leading to lessen the
severity of
discrimination while economic integration is a process which leads to
adoption of
measures which can be used for the suppression of some form of
discrimination. For
example G.A.T.T. or W.T.O. are the examples of cooperation. It is an
agreement
between the member countries of the world about the trade policies to be
pursued in
order to intensity the volume of trade among the member countries of the
world while
removal of trade barriers the tariffs and other non-tariff barrier is an example
of
economic integration.
2.2 CAUSES OF THE POPULARITY OF ECONOMIC INTEGRATION:-
Now a days economic integration is becoming more popular because of the
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mutual benefits which spring up from economic integration. United we
stand divided we
fall. In economic integration the economic activities of the member
countries are
harmonized, co-ordinated and unitedly operated.
Following are the reasons of the popularity of economic integration:-
i) Widening of market:- By regional grouping or integration the domestic
market gets
widened. There happens to be a move from domestic market to a regional
market.
ii) Economies of scale:- Due to regional integration or grouping production
takes place
at a very large scale due to specialization. Due to specialization economies