Economic Integration

Economic integration is the unification of economic policies between different states through the
partial or full abolition of tariff and non-tariff restrictions on trade taking place among them prior to
their integration. This is meant in turn to lead to lower prices for distributors and consumers with the
goal of increasing the level of welfare, while leading to an increase of economic productivity of the
states.

The European Economic Community (EEC) was a regional organisation which aimed to bring
about economic integration among its member states. It was created by the Treaty of Rome of
1957.[2] Upon the formation of the European Union (EU) in 1993, the EEC was incorporated and
renamed as the European Community (EC). In 2009 the EC's institutions were absorbed into the
EU's wider framework and the community ceased to exist.

1 Preferential Agreement
A trade pact between countries that reduces tariffs for certain products to the countries who sign the
agreement. While the tariffs are not necessarily eliminated, they are lower than countries not party to
the agreement. It is a form of economic integration.

is a trading bloc that gives preferential access to certain products from the participating countries.
This is done by reducing tariffs but not by abolishing them completely. A PTA can be established
through a trade pact. It is the first stage of economic integration. The line between a PTA and a free
trade area (FTA) may be blurred, as almost any PTA has a main goal of becoming a FTA in
accordance with the General Agreement on Tariffs and Trade.

2. Free trade Agreement

A free-trade area is the region encompassing a trade bloc whose member countries have signed
a free-trade agreement (FTA). Such agreements involve cooperation between at least two
countries to reduce trade barriers – import quotas and tariffs – and to increase trade of goods and
services with each other.[1] If people are also free to move between the countries, in addition to a
free-trade agreement, it would also be considered an open border. It can be considered the second
stage of economic integration.

Trade agreements are when two or more nations agree on the terms of trade
between them. They determine the tariffs and duties that countries impose
on imports and exports. All trade agreements affect international trade.
Example of FTA …. Mission
The European Free Trade Association (EFTA) is an intergovernmental organisation set up for the
promotion of free trade and economic integration to the benefit of its four Member States – Iceland,
Liechtenstein, Norway and Switzerland – and the benefit of their trading partners around the globe.
Effects

There are pros and cons to trade agreements. By removing tariffs, they lower
prices of imports and consumers benefit. But some domestic industries suffer.
They can't compete with countries that have a lower standard of living. As a
result, they can go out of business and their employees suffer. Trade agreements
often force a trade-off between companies and consumers.

On the other hand, some domestic industries benefit. They find new markets for
their tariff-free products. Those industries grow and hire more workers.

3. Customs Union

a trade agreement by which a group of countries charges a common set

of tariffs to the rest of the world while granting free trade among themselves. It
is a partial form of economic integration that offers an intermediate step
between free-trade zones (which allow mutual free trade but lack a
common tariff system) and common markets (which, in addition to the
common tariffs, also allow free movement of resources such as capital
and labour between member countries). A free-trade zone with common tariffs
is a customs union.

4. common market
Group formed by countries within a geographical area to promote duty free trade and free movement
of labor and capital among its members. European community (as a legal entity within the framework
of European Union) is the best known example. Common markets impose common external tariff
(CET) on imports from non-member countries

5. Economic union

economic union is a type of trade bloc which is composed of a common market with a customs
union.[citation needed]The participant countries have both common policies on product regulation, freedom
of movement of goods, services and the factors of production (capital and labour) and a
common external trade policy. When an economic union involves unifying currency it becomes
an economic and monetary union.

An economic union is considered one of the different types of trade blocs. It

refers to an agreement between or among countries that allows products,
services, and workers to cross borders freely. The union is aimed at eliminating
internal barriers and adopting external barriers towards the free movement of
resources.
The process of European integration, in which we currently participate, was launched soon
after the end of the World War II. It relies on tragic experiences connected with the largest
and also most tragic armed conflict in human history, caused by Nazi Germany. After the
war, in Europe, and more specifically in its western part, there arose conditions favourable
for the start of a new, planned integration of the countries of the Old Continent. Western
European countries, though very weakened after the war (destroyed economy,
infrastructure, human resources), were, however, as never before agreeable to the
necessity of defending basic human rights and democratic values. Western European
leaders decided to undertake coordinated actions aiming at the reconstruction of European
countries and their economies and introduction of a new political order, which could
guarantee the security of nations and give a chance for their successful development in the
future

History of European Integration. The post-war European integration process began with
the reconstruction of Western European infrastructure and the economies. Appropriate
stimuli for its start proved to be the economic agreements and organizations set up at the
end of the forties of the twentieth century: the Benelux Customs Union, the Treaty of
Economic, Social, and Cultural Collaboration and Collective Self-defence and the
Organization for European Economic Co-operation.

According to the provisions of the Treaty on European Unionthe following objectives were
set for the Union:

-to promote economic and social progress and a high level of employment and to achieve
balanced and sustainable development, in particular through the creation of an area without
internal frontiers, through the strengthening of economic and social cohesion and through
the establishment of economic and monetary union, ultimately including a single currency,

-to assert its identity on the international scene, in particular through the implementation of
a common foreign and security policy including the progressive framing of a common
defense policy, which might lead to a common defense, in accordance with the provisions of
Article,

-to strengthen the protection of the rights and interests of the nationals of its Member
States through the introduction of a citizenship of the Union,

-to maintain and develop the Union as an area of freedom, security and justice, in which the
free movement of persons is assured in conjunction with appropriate measures with respect
to external border controls, asylum, immigration and the prevention and combating of
crime,

-to maintain in full the acquis communautaire and build on it with a view to considering to
what extent the policies and forms of cooperation introduced by this Treaty may need to be
revised with the aim of ensuring the effectiveness of the mechanisms and the institutions of
the Community.