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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