Regionalism,
Intra - regional Trade
Regional
Integration Agreement/ Arrangement (RIA)
Sometimes
may countries may join hands together in groups to promote free trade or to
liberalise trade barriers. This group of
countries is called as trade blocs or Regional Integration Agreement (RIA). A
total of 265 RIA’S had been notified to the GATT/WTO until May 2003.
There
are different degrees of levels of economic integration. The important forms of integration are out
lined below.
Free Trade area: A free
trade area is a grouping of countries to bring about free trade between
them. Each member is left free to
determine his own commercial policy with non-member.
Customs Union: It is more
advanced level of economic integration than the free trade area. It not only eliminates all restrictions on
trade among members but also adopts a uniform commercial policy against the
non-members.
Common market: It is a
step ahead of custom union. The common
market besides having both the characteristics of customs union, allows free
movement of labour and capital within the common market.
Economic
union: A still more advanced
level of integration is the economic union.
Apart from satisfying the conditions of the common market mentioned
above, the economic union achieves a common national economic policy through a
common central bank.
Example: The European Union (EU)
Economic integration: The ultimate form is full economic
integration characterised by the completion of the removal of all barriers of
trade, unification of social as well as economic policies and all members bound
by decisions of a supranational authority of executive, judicial and
legislative branches.
