and Business Centres -271
TradeBlocks
ECONOMICINTEGRATION
Some countries create business opportunities for themselves by integrating their economies in Economic
integration among
ordertoavoid unnecessary competition anmong thenselves and also from other countries. Economic the world
integrationamong countries takes several foms. It covers different kinds of arrangements between economies varies
oramong countries by which two or more countries link their economies closer either in part of in degree, The
econom ies are:
(otal. They maintain the cohesiveness among or between the countries through tariffs. They
discriminate against the other countries, which are not parties to the agreement, through tariffs. " Free Trade Area
Ualso discriminate against the goods produced by other countries, Economic integration varies " Customs Union
indegrees. "Common Market
" Economic Union
DIFFERENT KINDS OF ECONOMI C INTEGRATION
Economic integration among the world economies varies in degrees. They are:
Eree Trade Area: lf a group of countries agree to abolish all trade restrictions and barriers
among or charge low rates of tariffs in carrying out international trade, such a group 1S
called, free trade area'. These countries impose trade barriers and restrictions with regard
to trade with countries other than the members of the group
independently.
Customs Union: The member countries of the customs union have two basic features.
They are: ()) The member Countries abolish all the restrictions and barriers on trade among
themselves or charge low rates of tariffs, and (i) they adopt a uniform commercial policy
of barriers and restrictions jointly with regard to the trade with the non-member countries.
Thus, customs union is advanced in degree compared to a free trade area.
» Common Market: Common market has three basic characteristics, They are: () All member
countries abolish all the restrictions and barriers on trade among themselves or charge low
rates of tarifis. (1) They adopt a uniform commercial policy of barriers and restrictions
jointly with regard to the trade with the non-member countries, and (ii) They allow free
movement of human resources and capital among the member countries. Thus, common
market is superior to customs union.
» Economic Union: Economic union has four basic characteristics. They are: () All member
countries abolish all the restrictions on trade among themselves or charge low rates of tariffs.
(i) They adopt a uniform commercial policy of barriers with regard to trade with the non
member countries. (iii) They allow free moment of human resources and capital among
themselves, and (iy) They achieve uniformity in monetary policy and fiscal policy among the
member countries. Thus, economic union is superior to common market.
In a nutshell, Economic Union > Common Market > Customs Union > Free Trade Area.
" REGIONAL APPROACH
As we have discussed, economic integration takes different forns like free trade area, customs In afree trade
area, the
union, common market and economic union. The member countries of the group adopt a system members charge
of preferential tariffs like lower rates of duty on imports. For example, UK and its commonwealth low rates of
countries operated a system of recipro cal tariff preferences after 1919. tariff or abolish
them regarding
In a free trade area, the members charge low rates of tariff or abolish them regarding the the trade among
tade among themselvés and different countries charge different rates to non-members. European themselves and
FTee Trade Association, is an example. As stated earlier, the members charge uniform rates of different
laritis with regard to non-1member countries. The 19 th century German Zollverein is an example countries charge
of customs union. different rates
to non-members.
The approach towards regional integration has ben increasing throughout the globe. Economic
iegration results in grouping up of smaller economies into a larger and single economy and
, Blocksand Business Centres -273
Trade
EUROPEAN UNION (EU)
Evolutionary
The origin of the European Union goes back to the European Coal and Steel Community Stages of EU are:
(ECSC)which was formed with the then West Germany, France, Italy, Belgium, Netherlands and European Coal
Luxembougin 1952 The aim of the ECSCwas to and Steel
eliminate import duties and quotas on coal,
iron ore, steel and scrap regarding the international trade among the member countries. The Community
sUcCeSstulfunctioning of ECSC stimulated the member countries to extend this facility to all " European
commodities by the Treaty of Rome in 1957. This Treaty gave birth to European Economic Common
Market/
Community. Europearn
Econom ic
.The European Economic Community is also known as European Common Market. Community
Originally six cOuntries, viz, France, Federal Republicof Germany, Italy, Belgium, "Europe an
Netherlands and Luxembourg formed into the European Economic Community (BEC) Economic
by the Treaty of Rome, 1957. It came into being on 1 January, 1958. The number of Union
member countries of the EEC increased from six to nine on January 1, 1973 as United
Kingdom, Ireland and Denmark joined the community. Greece joined the EEC in 198l
and Portugal and Spain joined in 1984. Austria, Finland and Sweden joined the community
on January 1, 1986. With the introduction of uniform monetary policy, common currency
and fiscal policy among the member countries the EEC became European Union (EU).
On May 1, 2004, 10more countries, viz., Cyprus, Czech Republic, Estonia, Greece,
Hungary, Latvia, Lithuania, Malta, Slovakia, Slovenia, joined EU. Thus, the membership
of EU as on 30th April, 2005 is 25.The requirements for joining the EU as members are
() the country must be European country, and (ii) it must be a democratic country.
Map 12.1 presents European Union member countries map.
MAP 12.1 :
Europear.
Union
Member
Countries
Nodetpod Polska
ocova
Poitugat
au
en.htn
http://europa.eu/abc/e*opean countries/index
Source:
TradeBlocks
ECONOMICINTEGRATION
Some countries create business opportunities for themselves by integrating their economies in Economic
integration among
ordertoavoid unnecessary competition anmong thenselves and also from other countries. Economic the world
integrationamong countries takes several foms. It covers different kinds of arrangements between economies varies
oramong countries by which two or more countries link their economies closer either in part of in degree, The
econom ies are:
(otal. They maintain the cohesiveness among or between the countries through tariffs. They
discriminate against the other countries, which are not parties to the agreement, through tariffs. " Free Trade Area
Ualso discriminate against the goods produced by other countries, Economic integration varies " Customs Union
indegrees. "Common Market
" Economic Union
DIFFERENT KINDS OF ECONOMI C INTEGRATION
Economic integration among the world economies varies in degrees. They are:
Eree Trade Area: lf a group of countries agree to abolish all trade restrictions and barriers
among or charge low rates of tariffs in carrying out international trade, such a group 1S
called, free trade area'. These countries impose trade barriers and restrictions with regard
to trade with countries other than the members of the group
independently.
Customs Union: The member countries of the customs union have two basic features.
They are: ()) The member Countries abolish all the restrictions and barriers on trade among
themselves or charge low rates of tariffs, and (i) they adopt a uniform commercial policy
of barriers and restrictions jointly with regard to the trade with the non-member countries.
Thus, customs union is advanced in degree compared to a free trade area.
» Common Market: Common market has three basic characteristics, They are: () All member
countries abolish all the restrictions and barriers on trade among themselves or charge low
rates of tarifis. (1) They adopt a uniform commercial policy of barriers and restrictions
jointly with regard to the trade with the non-member countries, and (ii) They allow free
movement of human resources and capital among the member countries. Thus, common
market is superior to customs union.
» Economic Union: Economic union has four basic characteristics. They are: () All member
countries abolish all the restrictions on trade among themselves or charge low rates of tariffs.
(i) They adopt a uniform commercial policy of barriers with regard to trade with the non
member countries. (iii) They allow free moment of human resources and capital among
themselves, and (iy) They achieve uniformity in monetary policy and fiscal policy among the
member countries. Thus, economic union is superior to common market.
In a nutshell, Economic Union > Common Market > Customs Union > Free Trade Area.
" REGIONAL APPROACH
As we have discussed, economic integration takes different forns like free trade area, customs In afree trade
area, the
union, common market and economic union. The member countries of the group adopt a system members charge
of preferential tariffs like lower rates of duty on imports. For example, UK and its commonwealth low rates of
countries operated a system of recipro cal tariff preferences after 1919. tariff or abolish
them regarding
In a free trade area, the members charge low rates of tariff or abolish them regarding the the trade among
tade among themselvés and different countries charge different rates to non-members. European themselves and
FTee Trade Association, is an example. As stated earlier, the members charge uniform rates of different
laritis with regard to non-1member countries. The 19 th century German Zollverein is an example countries charge
of customs union. different rates
to non-members.
The approach towards regional integration has ben increasing throughout the globe. Economic
iegration results in grouping up of smaller economies into a larger and single economy and
, Blocksand Business Centres -273
Trade
EUROPEAN UNION (EU)
Evolutionary
The origin of the European Union goes back to the European Coal and Steel Community Stages of EU are:
(ECSC)which was formed with the then West Germany, France, Italy, Belgium, Netherlands and European Coal
Luxembougin 1952 The aim of the ECSCwas to and Steel
eliminate import duties and quotas on coal,
iron ore, steel and scrap regarding the international trade among the member countries. The Community
sUcCeSstulfunctioning of ECSC stimulated the member countries to extend this facility to all " European
commodities by the Treaty of Rome in 1957. This Treaty gave birth to European Economic Common
Market/
Community. Europearn
Econom ic
.The European Economic Community is also known as European Common Market. Community
Originally six cOuntries, viz, France, Federal Republicof Germany, Italy, Belgium, "Europe an
Netherlands and Luxembourg formed into the European Economic Community (BEC) Economic
by the Treaty of Rome, 1957. It came into being on 1 January, 1958. The number of Union
member countries of the EEC increased from six to nine on January 1, 1973 as United
Kingdom, Ireland and Denmark joined the community. Greece joined the EEC in 198l
and Portugal and Spain joined in 1984. Austria, Finland and Sweden joined the community
on January 1, 1986. With the introduction of uniform monetary policy, common currency
and fiscal policy among the member countries the EEC became European Union (EU).
On May 1, 2004, 10more countries, viz., Cyprus, Czech Republic, Estonia, Greece,
Hungary, Latvia, Lithuania, Malta, Slovakia, Slovenia, joined EU. Thus, the membership
of EU as on 30th April, 2005 is 25.The requirements for joining the EU as members are
() the country must be European country, and (ii) it must be a democratic country.
Map 12.1 presents European Union member countries map.
MAP 12.1 :
Europear.
Union
Member
Countries
Nodetpod Polska
ocova
Poitugat
au
en.htn
http://europa.eu/abc/e*opean countries/index
Source:
