Economic Integration

GFMA6043

International Business

GFMA6043

International Business

INDIVIDUAL ASSIGNMENT

NAME | Dedy Anry | 820009 |

|

LECTURER | Dr. Nurhaizal Azam Arif |

Economic Integration

According to business dictionary the definition of Economic integration is an agreement among countries in a geographic region to reduce and ultimately remove, tariff and non-tariff barriers to the free flow of goods or services and factors of production among each other’s; any type of arrangement in which countries agree to coordinate their trade, fiscal, and/or monetary policies are referred to as economic integration. Thus, there are many different stages of integration.

* Integration as an outcome – integration as something static; integration that can be only achieved when certain criteria are fulfilled.

* Integration as a process – integration as something dynamic process; that represented by stages of integration going form FTA to political integration.

(What is economic integration? definition and meaning, 2016)

Economic integration can be categorized into five stages:

* Free Trade Area

* Customs Union

* Single Market

* Economic and Monetary Union

* Complete Integration (Political Union)

Figure 1.1: 5 Stages Economic Integration

Source: https://people.hofstra.edu/geotrans/eng/ch5en/conc5en/economicintegration.html

Free Trade Area

FTA or in other word refer free trade area is formed when at least two states partially or fully abolish custom tariffs on their inner border. Free trade area is a type of trade bloc, the countries that agreed to eliminate tariffs or quotas on the goods traded between both of them. To exclude regional exploitation of zero tariffs within the FTA there is a rule of certificate of origin for the goods originating from the territory of a member state of an FTA. Members in a free trade area do not have a common external tariff this means different quotas and customs. The rules of origin is used by...