ECONOMICS

Regional Economic Integration Alliances

Regional Economic Integration Alliances

The regional economic integration has helped the countries in focusing on various issues that are related to the stages of development as well as it encourages trade among neighbors. Four main types of regional economic integration are as follows:

Common Market

The common market allows the members of the countries to form markets that are economically integrated. This has helped in removal of trade barriers and the movement of capital and labor among the member countries has become possible. A common policy for trade has been introduced that has helped them in improving trade activities. The main advantage that is gained by the workers is this that now they do not need work permits or visa for working in any other country that is an active member of the common market.

Free Trade Area

Another important benefit of regional economic integration is this that it has improved the economic cooperation among all the member countries. Almost all the barriers to trade have been removed due to free trade area and now all the members have an authority to establish trade policies and procedures with other non-member countries like for example NAFTA (North American Free Trade Agreement) (Alhorr et.al, 2012, p.44).

Customs Union

An economic cooperation has improved due to free trade zone and the barriers to trade have removed among the member countries. The member countries will be allowed to form trade agreement among non-member countries in a similar way as they can have it with the member countries.

Economic Union

This kind of relation is formed when countries enter into an economic agreement for removal of barriers in trade and in adoption of common economic policies for example EU (European Union).

With the help of regional economic integration alliances such as EU (European Union) and NAFTA North American Free Trade Agreement) the trade relations among various member and non-member countries have improved. The employment opportunities have enhanced as the restrictions on labor movement have removed. The smaller countries have become able to get cooperation and consensus of bigger countries at ease due to membership in any of the types of regional economic integration. There are some disadvantages of regional economic integration such as employment reductions and shifts, loss of national sovereignty and trade diversion. Due to the expansion of World Trade Organization (WTO) large number of regional agreements has become obsolete.

North American Free Trade Agreement (NAFTA)

NAFTA came into being ...