trade integration

trade integration

the establishment of FREE TRADE between a number of countries with the aim of securing the benefits of international SPECIALIZATION and INTERNATIONAL TRADE. There are four main forms of trade integration, ranging from a loose association of trade partners to a fully integrated group of nation states:
  1. a FREE TRADE AREA, where members eliminate trade barriers between themselves but each continues to operate its own particular barriers against nonmembers.
  2. a CUSTOMS UNION, where members eliminate trade barriers between themselves and establish uniform barriers against nonmembers, in particular a common external tariff.
  3. a COMMON MARKET, that is, a customs union that also provides for the free movement of labour and capital across national boundaries.
  4. an ECONOMIC UNION, that is, a common market that also provides for the unification of members' general objectives in respect of economic growth, etc, and the harmonization of monetary, fiscal and other policies.

Examples of ‘free trade areas’ are the EUROPEAN FREE TRADE ASSOCIATION (EFTA), the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA), the ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN), ASIA PACIFIC ECONOMIC COOPERATION (APEC), and the former LATIN AMERICAN FREE TRADE ASSOCIATION (LAFTA). A splinter-group from LAFTA, MERCOSUR, is an example of a ‘customs union’; the ANDEAN PACT, another LAFTA splinter-group, is an example of a ‘common market’; while the EUROPEAN UNION is rapidly transforming itself from a common market into a full-blown economic union' (see ECONOMIC AND MONETARY UNION).

Partial trade integration as exemplified by the above arrangements are beneficial insofar as they create additional trade between members, but they also involve discrimination against nonmembers, which may reduce trade with these countries. Thus, many economists view the promotion of free trade on a multilateral basis through the auspices of the WORLD TRADE ORGANIZATION as generally preferable to limited regional alliances.

trade integration

the establishment of FREE TRADE between a number of countries with the aim of securing the benefits of international SPECIALIZATION and INTERNATIONAL TRADE. There are four main forms of trade integration, ranging from a loose association of trade partners to a fully integrated group of nation states:
  1. a FREE TRADE AREA, where members eliminate trade barriers between themselves but each continues to operate its own particular barriers against nonmembers;
  2. a CUSTOMS UNION, where members eliminate trade barriers between themselves

    and establish uniform barriers against nonmembers, in particular a common external tariff;

  3. a COMMON MARKET, that is, a customs union that also provides for the free movement of labour and capital across national boundaries;
  4. an ECONOMIC UNION, that is, a common market that also provides for the unification of members’ general objectives in respect of economic growth, etc., and the harmonization of monetary, fiscal and other policies.

Examples of‘free trade areas’ are the EUROPEAN FREE TRADE ASSOCIATION (EFTA), the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA), the ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN), ASIA PACIFIC ECONOMIC COOPERATION (APEC), and the former LATIN AMERICAN FREE TRADE ASSOCIATION (LAFTA). A splinter-group from LAFTA, MERCOSUR, is an example of a customs union, the ANDEAN PACT, another LAFTA splinter-group, is an example of a common market, while the EUROPEAN UNION is rapidly transforming itself from a common market into a full-blown economic union (see ECONOMIC AND MONETARY UNION). Partial trade integrations as exemplified by the above arrangements are beneficial insofar as they create additional trade between members (see TRADE CREATION), but they also involve discrimination against nonmembers, which may reduce trade with these countries (see TRADE DIVERSION).Thus, many economists view the promotion of free trade on a multilateral basis through the auspices of the WORLD TRADE ORGANIZATION as generally preferable to limited regional alliances. See also GAINS FROM TRADE.

References in periodicals archive ?
Regional trade integration is consistent with Pakistan's thrust to diversify export products and destinations.
Combining these four elements in our future mining investments, we will use new types of financing, support diversification and increase trade integration.
RCCI Chief also shared the proposed agenda highlights for the upcoming conference which includes China- Pakistan Economic Corridor (CPEC) and its possible impacts on Inter and Intra Regional trade, connectivity and regional trade integration.
Mr Khan also shared the agenda for the conference which includes CPEC and its possible impacts on inter and intra regional trade, connectivity and regional trade integration, trade and investment opportunity in Pakistan, inter-regional trade barriers and the settlement of international trade disputes.
connectivity and regional trade integration, Trade and investment opportunities in Pakistan, Inter-regional trade barriers (Tariff and non-Tarif barriers) and settlement of international trade disputes.
He said that the proposed agenda highlights for the upcoming conference includes China Pakistan Economic Corridor (CPEC) and its possible impacts on inter and intra regional trade, connectivity and regional trade integration, trade and investment opportunities in pakistan, inter:regional trade barriers (tariff and non:tarif barriers) and settlement of international trade disputes.
According to the Ministry of Commerce (MOFCOM), China has strengthened economic and trade integration with neighboring countries and this trade policy will be maintained in the years to come.
A couple of years ago, had formulated the Nepal Trade Integration Strategy, which identified the goods with export potential and implemented promotion campaigns of 'Made in Nepal' goods in the international market, and put its efforts to diversify the international trade, following the border blockade in 2015/16, but the results are not encouraging.
The theme for the Forum is Opportunities for Development Through Regional Trade Integration.
Senior official of Ministry of Commerce informed that the main objective of this conference was to enhance bilateral trade volume, strengthen trade and economic ties and regional trade integration of these economies.
Amid concerns on rising protectionism, it is imperative for the Association of Southeast Asian Nations (Asean) to focus on 'building bridges' and deepening trade integration in order to boost the resilience of the 10-member economic bloc, the chief of regional investment powerhouse Maybank Kim Eng Group said.
Current restrictions on trade and immigration after the global economic crises will hamper productivity, growth, and innovation, said Obstfeld, adding it was "vitally important" to encourage trade integration prospects.