Economic Integration
The process of blurring the boundaries that separate economic activity in one nation state to another (Removing barriers to trade).
Examples of barriers to trade
- Tariffs
- Product standards
- In the EU they have the same standards for all countries
- Quotas
- Employment laws
- Free movement of workers
- Subsidies
| Level | Abolition of tariffs | Common External Tariff | Free movement of labour and capital | Abolition of non-tariff barriers | Common market policies | Common currency and monetary policy |
|---|---|---|---|---|---|---|
| 1. Free Trade Area | ✓ | ✗ | ✗ | ✗ | ✗ | ✗ |
| 2. Customs Union | ✓ | ✓ | ✗ | ✗ | ✗ | ✗ |
| 3. Single Market | ✓ | ✓ | ✓ | ✓ | ✗ | ✗ |
| 4. Economic Union | ✓ | ✓ | ✓ | ✓ | ✓ | ✗ |
| 5. Monetary Union | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
- No tariffs on goods and services between members
- NAFTA - North American Free Trade Area
- USA, Canada and Mexico
- Causes manufacturing to move to mexico
- Same tariffs on products / service
- ASEAN / Mercouser
- Free movement of goods, services, capital and labour
- Single European Market
- Similar / Same Fiscal policies
- E.U common subsidies
- Single currency
- Euro zone
- Same country
- US - States merged to become one country