2. Objectives
◊ WHAT IS REGIONAL
INTEGRATION ?
◊ STAGES OF ECONOMIC
INTEGRATION BENEFITS OF
RI
◊ INTEGRATED ECONOMIES
EU NAFTA ASEAN
ERCOSUR
3. Regional Integration
• Remove barriers
• Increase the movement of
people, labors, goods
among nations
• Reducing possibility of
regional armed conflict
• Adopting cohesive
regional stances on policy
issue
4. Stages of Economic Integration
• Free-Trade Area
• Customs Union
• Common Market
• Economic Union
• Political Union
5. • Free-trade area
All barriers to trade of goods/services are
removed
Each country allowed to determine non-
member country
Custom union
Eliminate trade barriers between member
countries
Adopt common external trade policy
Common Market
No barriers to trade among member countries
Common external trade policy
Allow factors of production to mover freely
among members
Economic Union
Free flow of products & factors of production
Adoption of common external trade policy
Requires common currency, common
monetary & fiscal policy
Political Union
Central political apparatus coordinate
economic social& foreign policy
6. Integrated Economies-Europe Union
• The EU was founded in 1957
under the treaty of Rome by
France, Germany, Italy and
Benelux nations.
• European Union : Product of 2
political factors
• Devastation of 2 world
wars& desire of peace
• Desire to hold their own on
the world ‘s political and
economic
• The Aim
• Prevention of future war
• Creation ‘an ever closer
union between the peoples of
Europe
• Encouraging economic
corporation and developing
7. European Union - Treaties
• Treaty of Rome
• Maastricht treaty
• Amsterdam treaty
• Treaty of nice
• Lisbon treaty
8. Integrated Economies – NAFTA
• North America Free trade Agreement
• 1989 US & Canada - 1994 & Mexico
• Remove tariffs on 99% of goods in 10 years
• Removal of barriers to cross-border flow of
services
• Protection of intellectual property rights
• Removal of most restriction on FDI
• Application of national environmental
standards (scientific basis )
9. Integrated Economies – ASEAN
• Association of southeast Asian
Nations
• 1967-Brunie Cambodia Indonesia
Laos Malaysia Myanmar
Philippines Singapore Thailand&
Vietnam
• 500 million people & GDP $740
billion
• Foster free trade & cooperate in
industrial policies
• The ASEAN Single aviation market
( SAM )
10. Benefits of Regional Integration
• Trade creation –increase in
the level of trade between
nations
• Greater consensus –
Eliminate trade barriers in
smaller groups of countries
• Political cooperation –can
reduce military conflicts
• Employment opportunities –
people can easily move one
country to another to find
work
11. Conclusion
• Expand trade among
nations
• Reduce Unemployment
• Military conflict among
nations declines
• Flows of FDI increase
among nations
