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FORMS OF

INTEGRATION
PRESENTED BY
:VAISHALI SHARMA
LECTURER MBA – IBE
ECONOMIC INTEGRATION
 The term Economic Integration has been interpreted in
different ways.
FREE TRADE AREA
 A FTA’s area is grouping of countries to bring
about free trade between them.

 It abolishes all restrictions on trade among the
members but each member is left free to
determine its own commercial policy with non-
members.
CUSTOM UNION
 A CU is a more advanced level of economic
integration than the FTA.

 It is not only eliminates all restrictions on trade
among members but also adopts a uniform
commercial policy against the non-members.
COMMON MARKET
 The CM is a step ahead of the Custom Union.

 A CM allows free movement of labour & capital
within the CM , besides having the two
characteristics of the Custom Union , namely
FTA’s among members & uniform tariff policy
towards outsiders.
ECONOMIC UNION
 A still more advanced level of integration is the
Economic union.

 Apart from satisfying the conditions of the
common market mentioned above , the
economic union achieves some degree of
harmonisation of national economic policies ,
through a common central bank unified
monetary & fiscal policy etc.

 For example EU



ECONOMIC INTEGRATION
 The ultimate form is full Economic integration
characterized by the completion of the removal
of all the barriers to intra –bloc movement of
goods & factors , unification of social as well as
economic policies and all the members bound
by decisions of a super national authority
consisting of executives , judicial & legislative
branches.
Regional Integration
ORGANISATIONS

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