ECONOMICS

Regional Economic Integration

Regional Economic Integration

Characteristics of Regional Economic Integration Using Examples of Economic Alliances

The regional economic integration is the process of increasing economic interdependence which outcomes when countries within the geographical region develop an alliance in order to decrease trade and investment barriers (www.dallariva.org). So, the economic integration leads to free trade that helps countries in achieving enhanced standards by promoting reduced prices, specialization, enhanced choices, enhanced productivity, and more effective utilization of resources (www.dallariva.org). Keeping in mind that significant characteristics of regional economic integration are free trade and investment, some examples can be stated here. One of the most significant examples here is the European Union (EU), which has been increasing its extent beyond its geographical borders towards the west and northeast (Capannelli & Filippini, 2009, p.3). The member nations of this union strive to have common monetary and fiscal policies like similar tax rates, fixed exchange rates, free currencies conversion, and the free capital movement. For instance, the European Union has taken higher pace towards regional economic alliances by developing a monetary union with a single currency: the euro. The member nations have made pace in eliminating border control, matching products and labelling principles, developing region wide policies for agriculture, energy, and social services. Further, the rules and legislations associated with mergers, competition, and other business behaviours are also standardized by members (www.dallariva.org). Thus, it clearly shows that European Union alliance have shown several characteristics of regional economic integration, as it has harmonized the legislations for corporate behaviours (mergers, competition, etc) and eliminated border control while developing region wide policies for different business measures.

Another example that can be stated here is Asia-Europe Meeting (ASEM), which has become the most significant and wide ranging of its processes nowadays. This alliance between Europe and Asia has resulted in enhanced trade and foreign direct investment (FDI) due to the increase in PRC exports to the twenty seven European Union member nations, while there have also been better accomplishments in humanitarian and cultural projects and exchanges (Capannelli & Fillippini, 2009, p.4). Thus, the two regions hold long-lasting relations and it is reasonable to expect much deeper cooperation from both through their alliance for further economic integration. The regional economic integration can shape various forms, both in terms of depth and breath, which can alone be exemplified by experiences in Europe. An example of it is European Free Trade Association and EU, where ...