Several levels of economic integration are possible in theory. From slightest integrated to most integrated they are a free trade area a custom unions, a common market, an economic union and finally a full political union.
The barriers between the members countries are removed if they are agree to the free trade. In the ideal trade between the countries as the free trade there were no problems of discrimination between the countries on quotas, subsidies, tariffs and policies. All members are treated equally. Each country however is allowed to determine its own trade policies with regard to nonmembers. Thus for example the tariffs placed on the products of nonmember countries may vary from member to member. Free trade agreements are the most popular form of regional economic integration accounting for almost 90 percent of regional agreement.
The most enduring free trade area in the world is European free trade association which was established in January 1960. It is currently joins four countries including Ireland, Norway, Switzerland and Liechtenstein. The custom unions are one step further along the road to full economic and political integrations. A custom union eliminates trade barriers between member countries and adopts a common external trade policy. So this helps to reduce the trade barriers in the country.
The barriers between the members countries are removed if they are agree to the free trade. In the ideal trade between the countries as the free trade there were no problems of discrimination between the countries on quotas, subsidies, tariffs and policies. All members are treated equally. Each country however is allowed to determine its own trade policies with regard to nonmembers. Thus for example the tariffs placed on the products of nonmember countries may vary from member to member. Free trade agreements are the most popular form of regional economic integration accounting for almost 90 percent of regional agreement.
The most enduring free trade area in the world is European free trade association which was established in January 1960. It is currently joins four countries including Ireland, Norway, Switzerland and Liechtenstein. The custom unions are one step further along the road to full economic and political integrations. A custom union eliminates trade barriers between member countries and adopts a common external trade policy. So this helps to reduce the trade barriers in the country.