Lconom|c |ntegrat|on refers Lo Lrade unlflcaLlon beLween dlfferenL sLaLes by Lhe parLlal or full abollshlng

of cusLoms Larlffs on Lrade Laklng place wlLhln Lhe borders of each sLaLe 1hls ls meanL ln Lurn Lo lead Lo
lower prlces for dlsLrlbuLors and consumers (as no cusLoms duLles are pald wlLhln Lhe lnLegraLed area)
and Lhe goal ls Lo lncrease Lrade

A referent|a| trade area (also referent|a| trade agreement 1A) ls a Lradlng bloc whlch glves
preferenLlal access Lo cerLaln producLs from Lhe parLlclpaLlng counLrles 1hls ls done by reduclng Larlffs
buL noL by abollshlng Lhem compleLely A 1A can be esLabllshed Lhrough a Lrade pacL lL ls Lhe flrsL
sLage of economlc lnLegraLlon
O Asia-PaciIic Trade Agreement (1976)
|2|

O Economic Cooperation Organization (ECO) (1992)
O Generalized System oI PreIerences
O Global System oI Trade PreIerences among Developing Countries (GSTP) (1989)


A free trade area (I1A) ls a Lrade bloc whose member counLrles have slgned a free trade agreement
(I1A) whlch ellmlnaLes Larlffs lmporL quoLas and preferences on mosL (lf noL all) goods and servlces
Lraded beLween Lhem lf people are also free Lo move beLween Lhe counLrles ln addlLlon Lo l1A lL
would also be consldered an open border lL can be consldered Lhe second sLage of economlc
lnLegraLlon CounLrles choose Lhls klnd of economlc lnLegraLlon lf Lhelr economlcal sLrucLures are
complemenLary lf Lhelr economlcal sLrucLures are compeLlLlve Lhey are more llkely Lo form a cusLoms
unlon
ASLAnChlna lree 1rade Area (ACl1A) ln effecL as of 1 !anuary 2010

A customs union is a type oI trade bloc which is composed oI a Iree trade area with a common
external tariII. The participant countries set up common external trade policy, but in some cases
they use diIIerent import quotas. Common competition policy is also helpIul to avoid
competition deIiciency.
Purposes Ior establishing a customs union normally include increasing economic eIIiciency and
establishing closer political and cultural ties between the member countries.
It is the third stage oI economic integration.
Customs union is established through trade pact.
Southern AIrican Customs Union (SACU) 1910
|4|



A single market is a type oI trade bloc which is composed oI a Iree trade area (Ior goods) with
common policies on product regulation, and Ireedom oI movement oI the Iactors oI production
(capital and labour) and oI enterprise and services. The goal is that the movement oI capital,
labour, goods, and services between the members is as easy as within them.
|1|
The physical
(borders), technical (standards) and Iiscal (taxes) barriers among the member states are removed
to the maximum extent possible. These barriers obstruct the Ireedom oI movement oI the Iour
Iactors oI production.
A common market is a Iirst stage towards a single market, and may be limited initially to a Iree
trade area with relatively Iree movement oI capital and oI services, but not so advanced in
reduction oI the rest oI the trade barriers.
The European Economic Community was the Iirst example oI a both common and single market,
but it was an economic union since it had additionally a customs union.


An economic union is a type oI trade bloc which is composed oI a common market with a
customs union. The participant countries have both common policies on product regulation,
Ireedom oI movement oI goods, services and the Iactors oI production (capital and labour) and a
common external trade policy.The countries oIten share a common currency.
Purposes Ior establishing a economic union normally include increasing economic eIIiciency and
establishing closer political and cultural ties between the member countries.
Economic union is established through trade pact.
O Single market oI the European Union
|1||2|

O CARICOM Single Market and Economy oI the Caribbean Community
|3|

O unlon SLaLe of 8ussla and 8elarus

An customs and monetary union is a type oI trade bloc which is composed oI a customs union
and a currency union. The participant countries have both common external trade policy and
share a single currency.
Customs and monetary union is established through trade pact.
O Economic and Monetary Community oI Central AIrica (CEMAC)
|1|

O West AIrican Economic and Monetary Union (UEMOA)
|2|


A currency union (also known as 24309,7:343) is where two or more states share the same
currency, though without there necessarily having any Iurther integration such as an Economic
and Monetary Union, which has in addition a customs union and a single market.
There are three types oI currency unions:
1. Informal - unilateral adoption oI Ioreign currency
|.9a9on needed|

2. ormal - adoption oI Ioreign currency by virtue oI bilateral or multilateral agreement
with the issuing authority, sometimes supplemented by issue oI local currency in
currency peg regime
3. ormal w9 .ommon pol. - establishment by multiple countries oI common monetary
policy and issuing authority Ior their common currency


An economic and monetary union is a type oI trade bloc which is composed oI an economic
union (common market and customs union) with a monetary union. It is to be distinguished Irom
a mere monetary union (e.g. the Latin Monetary Union in the 19th century), which does not
involve a common market. This is the IiIth stage oI economic integration. EMU is established
through a currency-related trade pact.
O Economic and Monetary Union oI the European Union (1999/2002) with the Euro Ior the
Eurozone members oI the European Union


iscal union is the integration oI the Iiscal policy oI nations or states. Under Iiscal union
decisions about the collection and expenditure oI taxes are taken by common institutions, shared
by the participating governments. For example, in Iederal nations such as the United States,
Iiscal policy is determined to a large extent by the central government, which is empowered to
raise taxes, borrow and spend.
It is oIten proposed that the European Union adopt a Iorm oI Iiscal union.


omplete economic integration is the Iinal stage oI economic integration. AIter complete
economic integration, the integrated units have no or negligible control oI economic policy,
including Iull monetary union and complete or near-complete Iiscal policy harmonisation.
Complete economic integration is most common within countries, rather than within
supranational institutions. A good example oI this is a country like the United States oI America
which can be viewed as a series oI highly integrated quasi-autonomous nation states. In this
example it is true that complete economic integration results in a Iederalist system oI governance
as it requires political union to Iunction as, in eIIect, a single economy.