ECONOMIC INTEGRATION
In the most general sense, economic integration (sometimes referred to as trade or market integration) denotes the process whereby the economic barriers between two or more economies are eliminated. To some, it involves specific policy decisions by governments designed to reduce or remove barriers to mutual exchange of goods, services, capital and people, whereas other studies treat it as emanating from the natural forces of proximity, income and policy convergence, and greater intra-firm trade.
The economic integration process is often represented as a staged process, going from a preferential trade area to a total economic integration. The market forces set in motion at one stage will create spillover effects to the next stage, making its implementation a sine qua non. However, it is not always so that economic integration projects will follow these stages. For instance, the EEC skipped the so-called first stages of the establishment of a free trade area and started immediately with a customs union.
The early stages of economic integration tend to focus on the elimination of trade barriers and the creation of a custom union in goods.
Different Forms of Economic Integration:
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