LEVELS OF REGIONAL INTEGRATION
1. FTA: Economic integration whereby countries seek to remove all barriers to trade among themselves but where each country determines its own barriers against nonmembers.
2. Customs Union: Economic Integration whereby countries remove all barriers to trade among themselves trade among themselves and set a common trade policy against nonmembers.
3. Common Market: Economic integration whereby countries remove all barriers to trade and to the movement of labor and capital among themselves and set a common trade policy against nonmembers.
4. Economic Union: Economic integration whereby countries remove barriers to trade, labor, and capital, set a common trade policy against nonmembers, and coordinate member´s economic policies.
5. Political Union: Countries coordinate aspects of member´s economic and political systems.
BENEFITS OF INTEGRATION
1. Trade Creation: Increase in the level of trade between nations that results from regional economic integration. Ex: U s aquafina.
2. Greater Consensus: The benefit of trying to eliminate trade barriers in smaller groups of countries is that it can be easier to gain consensus from fewer members as opposed to say the 159 countries that comprise the WTO.
3. Political Cooperation: Political benefits from efforts toward regional economic integration. Ex: Devastation 2 ww.
4. Create jobs. Ex: Lng skills.
DRAWBACKS OF INTEGRATION: Pushes the case against regional economic integration.
1. Trade Diversion: Diversion of trade away from nations not belonging to a trading bloc and toward member nations.
2. Shifting employment: Regional Economic Integration: US-CANADA
3. Less sovereignity: Nestle sensitive culture.