The Relationship Between North American Free Trade...

Q1. Examine the various types of regional economic integration. What are the differences between the North American Free Trade Agreement (NAFTA) and the European Union’s level of integration?(2 pages maximum) Regional economic integration represents agreements between countries in a geographic region to reduce tariff and non-tariff barriers to the free flow of goods, services and factors of production between each other. Neighboring countries tend to ally because of their proximity to one another, somewhat similar regional tastes, the relative ease of establishing channels of distribution and a willingness to cooperate with one another for the greater benefit of all allied parties. Theoretically, the concept of regional economic†¦show more content†¦Customs Union - eliminates trade barriers between member countries and adopts a common external trade policy. Custom union provides for economic cooperation as in a free trade zone. The primary difference between customs union and free trade area involves members agreeing to treat trade with non-members countries in a similar manner. Most countries who enter a customs union often desire further integration in the future. For example, the Andean Pact (for agreements between Bolivia, Columbia, Ecuador, and Peru). Common Market - allows for the creation of economically integrated markets between member countries. Trade barriers are removed, as are any restrictions on the movement of labor and capital between member countries. Like customs union, there is a common trade policy for trade with non-member nations. The primary advantage of common markets is workers are no longer needing visa or work permit to work in another member country of a common market. For example, The Common Market for Eastern and Southern Africa or simply known as COMESA. Economic Union - occurs when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies. European Union or simply known as the EU is an example of economic union. The European Union or simply known as the EU is often viewed as an emerging