Eco. Integration Rough

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a. integration as an outcome integration as something static; integration can be

achived when certain criteria are fulfilled

b. integration as a processintegration as a dynamic process; represented by

stages of integration going form FTA to political integration

2. objective

An increase of welfare has been recognized as a main objective of economic

integration. The increase of trade between member states of economic unions is

meant to lead to the increase of the GDP of its members, and hence, to better

welfare.

The Term economic integration has been interpreted in different ways. Some

authors even include social and political integration in economic integration.

As per some authors the mere existence of trade relations between two or

more

independent national economies signifies economic integration.

As per some authors economic integration is a type of an arrangement which

leads to removal of artificial trade barriers for example tariffs between two

or moreindependent economies.

Economic integration is a general term which covers several kinds of

arrangements by means of which two or more independent economies agree

to come

closer economically. By economically integrating themselves in the form of

a union they

would like to discriminate against goods produced by countries of the rest of

the world

lying outside the economic union.

As per Timbergen economic integration is the creation of most desirable


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structure of international economy removing artificial barriers to the

optimum operation and introducing deliberately all desirable elements of

coordination or unification.While

defining the term economic integration he draws a distinction between two

types of

economic integration viz. positive and negative economic integration.

Positive economic

integration refers to bring about reforms in the existing institutional

arrangement,

checking out the neo policy to correct the market imperfections. On the other

hand the

negative economic integration refers to removal of artificial barriers like

tariffs on he

movement of goods among the member countries of the group.

Mr. Balasa defines economic integration as, a process and as a state of

affairs.

As a process it encompasses measures designed to abolish discrimination

between

economic units belonging to different national states; viewed as a state of

affairs, it can

be represented by the absence of various forms of discrimination between

national

economies.

While interpreting the term economic integration he draws a distinction

between

economic integration and economic co-operation. The nature of the

difference is both


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quantitative and qualitative. Co-operation entails action leading to lessen the

severity of

discrimination while economic integration is a process which leads to

adoption of

measures which can be used for the suppression of some form of

discrimination. For

example G.A.T.T. or W.T.O. are the examples of cooperation. It is an

agreement

between the member countries of the world about the trade policies to be

pursued in

order to intensity the volume of trade among the member countries of the

world while

removal of trade barriers the tariffs and other non-tariff barrier is an example

of

economic integration.

Causes of popularity

Now a days economic integration is becoming more popular because of the

mutual benefits which spring up from economic integration. United we

stand divided we

fall. In economic integration the economic activities of the member

countries are

harmonized, co-ordinated and unitedly operated.

Following are the reasons of the popularity of economic integration:-

i) Widening of market:- By regional grouping or integration the domestic

market gets


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widened. There happens to be a move from domestic market to a regional

market.

ii) Economies of scale:- Due to regional integration or grouping production

takes place

at a very large scale due to specialization. Due to specialization economies

of scale

both internal and external spring up.

iii) High degree of specialization:- The regional integration leads to

widening of market,

large scale production, economies of scale (internal and external) which

paves the

way for a very high degree of specialization. A micro-level specialization ie

specialization amongst the specialized items takes place which gets referred

to as

high degree specialization.

iv) Optimum reallocation of resources:- Assuming full employment when

the market

widens due to economic integration in order to cope up with the increased

demand

the country concerned has to reallocate resources ie resources are withdrawn

from

high cost production and put in use to the low cost production.

v) Increase in the volume of trade: Due to reallocation of factors of

production the

volume of production increases ie the volume of production doubles.

vi) Changes in the cost price structure:- As per the modern theory of foreign

trade due


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but also quality of product increase due to which life style changes.

xi) Increase in economic development:- The increase in the volume of trade

leads to

increase in per capita income and the standard of living of the people. It is an

indication of increase in the rate of economic growth of the member

countries.

xii) Overall increase in welfare:- All the above mentioned factors, pave the

way for

increasing the general welfare and well being of the people of the member

countries.

2.0 OBJECTIVES

1. To understand the term Economic Integration

2. To know the causes of popularity of Economic Integration

3. To understand the various types of Economic Integration

4. To know the concepts of Protection and Trade Liberalism

5. To understand the meaning and types of Regional Trade Blocks

6. To know about European Union

7. To know about North American Free Trade Agreement

LEVELS :-

Free Trade Area

Free Trade Areas (FTAs) are created when two or more countries in a region agree to

reduce or eliminate barriers to trade on all goods coming from other members. TheNorth

Atlantic Free Trade Agreement(NAFTA) is an example of such a free trade area, and

includes the USA, Canada, and Mexico.

Customs Union
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A customs union involves the removal of tariff barriers between members, plus the

acceptance of a common (unified) external tariff against non-members. This means that

members may negotiate as a single bloc with 3rd

parties, such as with other trading blocs,

or with theWTO.

Common Market

A common marketis the first significant step towards full economic integration, and

occurs when member countries trade freely in all economic resources not just tangible

goods. This means that all barriers to trade in goods, services, capital, and labour are

removed. In addition, as well as removing tariffs, non-tariff barriers are also reduced and

eliminated. For a common market to be successful there must also be a significant level

of harmonisation of micro-economic policies, and common rules regarding monopoly

power and other anti-competitive practices. There may also be common policies affecting

key industries, such as theCommon Agricultural Policy(CAP) and Common Fisheries

Policy (CFP) of the European Single Market (ESM).

Economic Union

Economic Union is a term applied to a trading bloc that has both a common market

between members, and a common trade policy towards non-members, but where

members are free to pursue independent macro-economic policies.

Forms of economic integration

The economic integration of several countries or states may take a variety of forms.

The term covers preferential tariffs, free-trade associations, customs unions, common

markets, economic unions, and full economic integration.

The parties to a system of preferential tariffslevy lower rates of duty on imports from

one another than they do on imports from third countries.

In free-trade associationsno duty is levied on imports from other member states, but

different rates of duty may be charged by each member on its imports from the rest of

the world.

A further stage is the customs union, in which free trade among the members is

sheltered behind a unified schedule of customs duties charged on imports from the

rest of the world.
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A common marketis an extension of the customs union concept, the additional feature

being that it provides for the free movement of labour and capital among the

members.

The term economic uniondenotes a common market in which the members agree to

harmonize their economic policies generally.

Finally, total economic integrationimplies the pursuit of a common economic policy by

the political units involved.

Advantages Of Economic IntegrationTrade Creation: Member countries have (a) wider selection of goods

and services not previously available; (b) acquire goods and

services at a lower cost after trade barriers due to lowered tariffs

or removal of tariffs (c) encourage more trade between member

countries the balance of money spend from cheaper goods and

services, can be used to buy more products and services

Political Cooperation:A group of nation can have significantly

greater political influence than each nation would have

individually. This integration is an essential strategy to address

the effects of conflicts and political instability that may affect the

region. Useful tool to handle the social and economic challenges

associated with globalization

Employment Opportunities:As economic integration encourage

trade liberation and lead to market expansion, more investment

into the country and greater diffusion of technology, it create

more employment opportunities for people to move from one

country to another to find jobs or to earn higher pay. Forexample, industries requiring mostly unskilled labor tends to shift

production to low wage countries within a regional cooperation

Disadvantages Of Economic Integration


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Creation Of Trading Blocs: It can also increase trade barriers

against non-member countries.

Trade Diversion: Because of trade barriers, trade is diverted from a

non-member country to a member country despite the

inefficiency in cost. For example, a country has to stop trading

with a low cost manufacture in a non-member country and trade

with a manufacturer in a member country which has a higher

cost.

National Sovereignty: Requires member countries to give up some

degree of control over key policies like trade, monetary and fiscal

policies. The higher the level of integration, the greater the

degree of controls that needs to be given up particularly in the

case of a political union economic integration which requires

nations to give up a high degree of sovereignty.

Advantages Of Economic Integration

Trade Creation: Member countries have (a) wider selection of goods and services not previously

available; (b) acquire goods and services at a lower cost after trade barriers due to lowered tariffs

or removal of tariffs (c) encourage more trade between member countries the balance of money

spend from cheaper goods and services, can be used to buy more products and services

Greater Consensus:Unlike WTO with hugh membership (147 countries), easier to gain consensus

amongst small memberships in regional integration

TYPES OF ECONOMIC INTEGRATION :-

Economic cooperation or integration may take any one or a combination of any of the following

forms:

(i) Economic Union, (ii) Customs Union, (iii) Free Trade Area, (iv) Sectoral or Partial Integration, (v)

Preferential Trading, (vi) Long-term Trade Agreements.


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These different forms of integration visualise different degrees of economic cooperation in the

descending order.

An Economic Union is a case of absolute integration. It implies complete economic integration of a

group of countries. There is, thus, free mobility of factor resources and commodities in such a union.

The economic activities and policies (fiscal, monetary and general) of the member nations areperfectly harmonised, coordinated and collectively operated. Benelux (Belgium, the Netherlands and

Luxembourg) and the European Common Market (ECM) are such economic unions.

An economic union is, therefore, commonly referred to as a common market.

A Customs Union involves a common external tariff against non-member countries, while within the

union itself there is unrestricted free trade. From the customs union gradually, complete economic

union is evolved. For instance in the case of ECM, the Rome Treaty (1958) laid the basis of a customs

union of the six member countries, leading finally to an economic union by 1970.

A Free Trade Area involves the abolition of all trade restrictions within the group, but each individual

country in the group is free to maintain any sort of relation with the non-member countries.

Countries in a free trade area have, thus, no common external tariffs to maintain.

The European Free Trade Association (EFTA), 1959, and the Latin American Free Trade Association

(LAFTA) serve as examples of such free trade areas.

A Sectoral of Partial Integration refers to the establishment of a common market in a given product

or products. The European Coal and Steel Community (ECSC), 1952, is such a sectoral integration by

which members of the "Inner Six" have created a common market in coal and steel products within

their territories.

Preferential Trading is a sort of trading technique involving various measures for promoting trade

among the members of the group.

Generally, agreements may be entered into to ensure to each contracting party a favoured treatment

as compared to others. Such an agreement is usually referred to as the most-favoured nation

agreement. It may relate to commerce, industry and navigation, or it may relate either to

commodities or merely to customs duties. Ordinarily, the most-favoured nation clause is bilateral in

operation.

The trade liberalisation programme of the OEEC can be regarded as an example of preferential

trading. In 1950, the Code of Liberalisation was adopted by the members of the OEEC in order to

increase intra-European trade.

The Long-term Trade Contract is a type of bilateral arrangement, either in a single product or many

products of trade between any two nations. Its minimum duration may be an year or more. For

instance, India had once entered into a trade agreement with Japan for the supply of iron ore for a


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period of five years. Such an agreement tends to stabilise the export of a given product or products of

the country concerned.

CASE STUDY :-

The Role of Economic Integration in Asia

Kazakhstans foreign minister on the Asian Development Bank and the needto improve the regions physical links.

ByErlan Idrissov

May 03, 2014

http://thediplomat.com/2014/05/the-role-of-economic-integration-in-asia/

When the Asian Development Bank (ADB) was set up nearly half a century ago topromote economic development across the continent, not even the greatest optimistscould have dreamt of the scale of change and rate of progress we have seen. After all, in1966, Vietnam was the scene of a terrible conflict. China was firmly outside the globaleconomy. The Soviet Union and the West were still locked in the Cold War. Japan wasthe only major economic power in the region. Hundreds of millions of people wereseemingly trapped in poverty.

As finance ministers, central bank governors, and industry leaders gather in Astana,Kazakhstan, for the ADBs annual meeting, the picture could hardly be more different or

more positive. It is peace, prosperity and potential which are the hallmarks of Asia in the21st century.

China, the worlds second biggest economy, is driving global growth. India, Indonesia

and South Korea have joined China and Japan in the G20 group of largest economies.Growth is strong across the continent with millions lifted out of poverty. Asia nowproduces up to 30 percent of the world GDP and its share is expected to reach 50

percent by 2050.Kazakhstan, which did not exist as an independent country even a generation ago letalone when the ADB was established, is an example of the speed of change and directionof travel. Born out of the break-up of the Soviet Union, it is already among the50th biggest global economies with dramatic improvements in living standards for itscitizens.
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But despite this remarkable progress and predictions that this will be the AsianCentury, the continent still faces many challenges. Not all countries, nor all parts of

society, have shared in the fast pace of development. Asia remains home to two thirds ofthe worlds poor. Afghanistan is one of a number of countries still struggling withconflict.

We are also seeing the rapid pace of development putting increasing pressure onsocieties and resources. Kazakhstan itself is working hard to rebalance its economy awayfrom its natural resource wealth to build a successful and resilient future.

Delivering this goal for Kazakhstan and Asia as a whole and making sure all countriesand sections of society share in this prosperity depends critically on improved regionaleconomic integration. And this cant be achieved without tackling the barriers thatprevent the flow of trade across our continent and to the wider world.

It is why the decision by the ADB to focus this years annual meeting on improving

physical links transport and infrastructure is so important. At the heart of thisstrategy is the New Silk Road, which will enable trade to flow easily east and west just asit did centuries ago.

Chinas PresidentXi Jinping last year underlined the crucial role this development willplay in spreading prosperity. He outlined his vision for an economic belt from thePacific Ocean to the Baltic Sea, representing a market of unparalleled size and potential.This new Silk Road would help spread prosperity across the continent and give hope tocountries like Afghanistan.

With the withdrawal of international forces at the end of this year, economic prosperityand opportunity will be critical to building a stable Afghanistan. The development ofregional infrastructure can help integrate and open up the country to Asias growth.

Today, initiatives are already underway to strengthen connectivity and trade along thisancient route. New mega-projects, such as the Western China-Western Europe highway,which goes through Kazakhstan, will cut 45 days off delivery times between China andEurope. As part of this, Kazakhstan is upgrading more than 2,700 km of road in thesouth of the country to help reduce transport times and cut costs.

Such large-scale projects involve long-term vision and cross-regional cooperation. They

are built on shared ambitions and strong bilateral partnerships. Kazakhstansrelationship with China is an example of one of the building blocks in place.

Chinese-Kazakh trade has been growing strongly and is expected to reach $40 billion by2015. Our two countries are increasingly cooperating on cross-border energy andtransport projects whose positive impact will be felt far beyond our borders.


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But right across the continent, we need to find the confidence and courage to worktogether to remove barriers, whether physical or invisible, to trade and cooperation. Wehave the goal of joining the worlds top 30 economies the core objective of ourKazakhstan 2050 development strategy. But we know we cannot achieve this alone.

The ADB will be critical in realizing this bold ambition, through its work both withinKazakhstan and across Central Asia, where projects on water, energy, poverty reductionand business development among many others are confronting issues that directlyimpact the security and stability of the region. Kazakhstan intends to continue and growits support for the ADB and act as a reliable partner in its important work throughoutthe region.

It is why we hope the ADB this week in Astana will add renewed energy to efforts toimprove cooperation and connectivity within and beyond Asia. It is key to acceleratinggrowth, raising productivity and unlocking the continents vast potential.

The author is the Minister of Foreign Affairs of Kazakhstan.

Benefits Of Economic integration

Economic integration can be defined as a kind of arrangement where countries get in agreement to

coordinate and manage their fiscal, trade, and monetary policies in order to be mutually benefitted

by them. There are many degrees of economic integration, but the most preferred and popular one is

free trade. In economic integration no country pays customs duty within the integrated area, so it

results in lower prices both for the distributors and the consumers. The ultimate aim of economic

integration is to increase trade across the world. There are many other advantages associated with

this concept. Some of these are:

1.Progress in trade.

All countries that follow economic integration have extremely wide assortment of goods and services

from which they can choose. Introduction of economic integration helps in acquiring goods and

services at much low costs. This is because the removal of trade barriers reduces or removes the

tariffs entirely. Reduced duties and lowered prices save a lot of spare money with countries which

can be used for buying more products and services.2.Ease of agreement.

When countries enter into regional integration, they easily get into agreements and stick to them for

long periods of time.

3.Improved political cooperation.

Countries entering economic integration form groups and have greater political influence as


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compared to influence created by a single nation. Integration is a vital strategy for addressing the

effects of political instability and human conflicts that might affect a region.

4.Opportunities for employment.

The various options available in economic integration help to liberalize and encourage trade. This

results in market expansion due to which high amount of capital is invested in a countrys

economy. This creates higher opportunities for employment of people from all over the world. They

thus move from one country to another in search of jobs or for earning higher pay.

5.Beneficial for financial markets.

Economic integration is extremely beneficial for financial markets as it eases firm to borrow finances

at low rate if interest. This is because capital liquidity of larger capital market increases and the

resultant diversification effect reduces the risks associated with high investment.

6.Increase in Foreign Direct Investments.

Economic integration helps to increase the amount of money in Foreign Direct Investment (FDI).

Once firms start FDI, through new operations or by merger, takeover, and acquisition, it becomes a

international enterprise.

Thus economic integration is a win-win situation for all the firms, people and the economies involved

in the process. Is has become a preferred strategy for most countries of the world.

http://www.britannica.com/EBchecked/topic/178433/economic-integration

economic integration,process in which two or morestatesin a broadly defined geographic area

reduce a range oftradebarriers to advance or protect a set of economic goals.

The level of integration involved in aneconomic regionalistproject can vary enormously from loose

association to a sophisticated, deeply integrated, transnationalized economic space. It is in its

political dimension that economic integration differs from the broader idea of regionalism in general.

Although economic decisions go directly to the intrinsically political question of resource allocation,

an economic region can be deployed as a technocratic tool by the participatinggovernmentto

advance a clearly defined and limited economic agenda without requiring more than minimal political

alignment or erosion of formal statesovereignty.The unifying factor in the different forms of

economic regionalism is thus the desire by the participating states to use a wider, transnationalized

sense of space to advance national economic interests
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Forms of economic integrationAlthough there are many different forms of economic integration, perhaps the most convenient way to order

the concept is to think of a continuum that ranges from loose association at one end to an almost completemerging of national economies at the other end. Although it is far from a given that positive experiences in the

simpler forms of economic integration will lead to a deepening of the process to increasingly integrated shared

economic spaces, the more-complex forms incorporate and are founded on the substantive elements of theearlier forms. The significant point is that although economic integration is explicitly framed by trading

relationships, it acquires an increasingly political character as it reaches deeper forms.

Simple free-trade areaThe most basic type of economic integration is a simple free-trade area. In this form, attention is focusedalmost exclusively on a reduction of thetariffsandquotasthat restrict trade. Emphasis is placed almost

entirely on increasing the exchange of goods. The articulation of transnationalized production chains, trade in

services, labour mobility, and more-sophisticated forms of economic integration are not an explicit goal and

emerge as merely tangential to the primary goal of securing access to foreignmarketsfor domestic firms.

Second-generation free-trade areaIn a second-generation free-trade area, the basic nature of simplefree tradeis expanded to include trade in non-

goods such as services. Where a simple free-trade area need only address the question of tariffs and quotas, the

trade in services and a widening of trade in goods raises questions of regulatory convergence and theharmonization of rules of operation and governance. At this stage, attention needs to be turned to such things

as the transferability of professional certifications as well as questions of labour mobility, particularly for the

highly skilled professions such as legal,accounting,technology,and medical services. The increased

interdependence between the participating economies that comes with expanded trade in all economic areas

and a measure of regulatory convergence can lead to an increased distribution of production chains across

national boundaries.

Customs unionAs national production structures transnationalize across the regional space, the next stage is to deepen

regulatory harmonization to present a common stance to the extra-regional market. The result is the formation

of acustoms unionrelying upon a common external tariff. One of the key attractions of this regulatoryconvergence between participating economies is that it reduces the challenges of monitoring and taxing

external inputs that are used to produce goods and services that circulate within the region. Implicit in theadoption of a common external tariff is a further harmonization of national rules and regulations, particularly

those relating to the control and flow of external trade into the regional economic space.

Common marketThe idea of acommon marketgrows from the possibilities presented by the adoption of a common external

tariff. As trade flows increase and factor inputs imported into the integrating economies begin to circulate

freely, production chains crossing the intra-regional national boundaries begin to form. This results in

sustained pressure to reduce the costs of transporting finished and semi-finished goods between the states

participating in the integration project. The solution is the harmonization of border procedures, which in its

ultimate form leads to the virtual elimination of national boundaries as internal barriers to trade and the

formation of a free-flowing regional economic space. A concomitant change with this complete opening of

internal trade is a liberalization of labour mobility, allowing the inhabitants of one member state to work in all

the other member states of the region.Monetary unionWith the evolution of a common market and the concomitant surge in intra-regional trade comes a new source

of expenses for business: the costs of transnational transactions. Even though borders may be open to the freetransit of goods and services, the need to constantly engage in foreign exchange operations to settle payments

as well as the differing relative costs caused by different national economic policies impose a constant

financial and administrative expense on firms operating within the region. The solution and next stage in theintegration progression is some form of monetary union, be it through an agreed fixing of relative exchange

rates or the more commonly discussed adoption of a commoncurrency.At this point, the economic aspects of
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integration also begin to take on a strong political flavour. Adoption of a common currency or monetary policy

by all members of the project also requires a strong convergence in macroeconomic policy, which imposes

external restraints on the domestic fiscal and expenditure policies that a government may pursue. The result is

a gradual blurring of the political as well as economic lines that separate the states participating in the

integration project.

Economic community orunionIn an economic community or union, the logic of common external tariffs, regulatory approximation, andharmonization of macroeconomic policy is taken to its full conclusion through the construction of an

overarching governance framework that imposes a common economic policy system on all countries in theregion. In effect, the member states surrender a significant degree of economic sovereignty to the whole in the

expectation of significantly expanded opportunities presented by a much larger, fully integrated economic

space facilitating the full mobility of finished products, factors of production, and labour. The harmonizationof regulations and procedures is facilitated through the creation of an overarching legislative and legal system

that trumps national laws and rules and also ensures that economic actors will face the same treatment

throughout the region.

Justifications of economic integrationThe extent to which a region will deepen its economic integration and adopt the characteristics of a

supranational state is partially influenced by the factors prompting states to start the regionalization process.Four broad reasons for pursuing economic integration can be identified.

EU
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SpainPortugal

France

Germany

EnglandIreland

Sweden

Finland

Denmark

Italy

Greece

Austria

Belgium

Netherlands

The EURO area


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EU def.:-

Definition of 'European Union - EU'

A group of European countries that participates in the world economy as one

economic unit and operates under one official currency, the euro. The EU's goal

is to create a barrier-free trade zone and to enhance economic wealth by

creating more efficiency within its marketplace.

Investopedia explains 'European Union - EU'

The current formalized incarnation of the European Union was created in 1993

with 12 initial members. Since then, many additional countries have since

joined. The EU has become one of the largest producers in the world, in terms

of GDP, and the euro has maintained a competitive value against the U.S.

dollar.

EU and non-EU members must agree to many legal requirements in order to

trade with the EU member states.

Current State:The European Union (EU) and the Euro-zone:

27members in EU and 15 members in the euro-zone excluding U.K.,

Sweden and Denmark but including Malta, Cyprus and Slovenia. 27

members are Germany, France, Italy, Belgium, Netherlands,

Luxembourg, Ireland, UK, Denmark, Greece, Portugal, Spain, Austria,

Finland, Sweden, Czech Rep., Estonia, Hungary, Poland, Slovenia,

Latvia, Lithuania, Slovak Rep., Cyprus, Malta, Bulgaria (2007),

Romania (2007).


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Hence, there are currently 16 European Monetary Union (EMU) members,

Denmark and the UK negotiated opt-out clauses while Sweden postponed

entry into the Euroland. Slovenia adopted the Euro on January 1st, 2007 and

Malta and Cyprus on 2008. Slovakia adopted the Euro on January 1st

, 2009.

3 countriesin the pre-accession state: These are Croatia, Turkey and

Macedonia.

NAFTA :-

The North American Free Trade Agreement(NAFTA; French:Accord de libre-change nord-

amricain,ALNA; Spanish: Tratado de Libre Comercio de Amrica del Norte, TLCAN) is anagreement signed byCanada,Mexico,and theUnited States,creating a trilateralrules-basedtrade

blocinNorth America.The agreement came into force on January 1, 1994. It superseded

theCanadaUnited States Free Trade Agreementbetween the U.S. and Canada.

NAFTA has two supplements: theNorth American Agreement on Environmental

Cooperation(NAAEC) and the North American Agreement on Labor Cooperation (NAALC).

In terms of combinedpurchasing power parityGDPof its members, as of 2013the trade bloc is

thelargest in the worldas well as by nominal GDP comparison.

The North American Free Trade Agreement(NAFTA; French:Accord de libre-change nord-amricain,ALNA; Spanish: Tratado de Libre Comercio de Amrica del Norte, TLCAN) is an

agreement signed byCanada,Mexico,and theUnited States,creating a trilateralrules-basedtrade

blocinNorth America.The agreement came into force on January 1, 1994. It superseded

theCanadaUnited States Free Trade Agreementbetween the U.S. and Canada.

NAFTA has two supplements: theNorth American Agreement on Environmental

Cooperation(NAAEC) and the North American Agreement on Labor Cooperation (NAALC).

In terms of combinedpurchasing power parityGDPof its members, as of 2013the trade bloc is

thelargest in the worldas well as by nominal GDP comparison.

Impact

NAFTA's effects, both positive and negative, have been quantified by several economists, whose

findings have been reported in publications such as theWorld Bank's Lessons from NAFTA for Latin

America and the Caribbean,[11]NAFTA's Impact on North America,[12]and NAFTA Revisitedby the

Institute for International Economics.[13]
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orth_American_Agreement_on_Environmental_Cooperationhttp://en.wikipedia.org/wiki/North_American_Agreement_on_Environmental_Cooperationhttp://en.wikipedia.org/wiki/Canada%E2%80%93United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Trade_blochttp://en.wikipedia.org/wiki/Trade_blochttps://www.nafta-sec-alena.org/Default.aspx?tabid=87&language=en-UShttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Trade_bloc#Most_active_regional_blocshttp://en.wikipedia.org/wiki/GDPhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/North_American_Agreement_on_Environmental_Cooperationhttp://en.wikipedia.org/wiki/North_American_Agreement_on_Environmental_Cooperationhttp://en.wikipedia.org/wiki/Canada%E2%80%93United_States_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/North_Americahttp://en.wikipedia.org/wiki/Trade_blochttp://en.wikipedia.org/wiki/Trade_blochttps://www.nafta-sec-alena.org/Default.aspx?tabid=87&language=en-UShttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Mexicohttp://en.wikipedia.org/wiki/Canada


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as theUnited States,Canada,Australia,andNew Zealand.This plan was opposed and strongly

criticized byJapanand the United States.

The first APEC Economic Leaders' Meeting occurred in 1993 whenU.S. PresidentBill Clinton,after

discussions with Australian Prime MinisterPaul Keating,invited theheads of governmentfrom

member economies to a summit onBlake Island.He believed it would help bring the stalledUruguay

Roundof trade talks back on track. At the meeting, some leaders called for continued reduction of

barriers to trade and investment, envisioning a community in the Asia-Pacific region that might

promote prosperity through cooperation. The APEC Secretariat, based in Singapore, was

established to coordinate the activities of the organization.

During the meeting in 1994 inBogor,Indonesia,APEC leaders adopted the Bogor Goals that aim for

free and open trade and investment in the Asia-Pacific by 2010 for industrialized economies and by

2020 for developing economies. In 1995, APEC established a business advisory body named the

APEC Business Advisory Council (ABAC), composed of three business executives from each

member economy.

Member economies

APEC currently has 21 members, including most countries with a coastline on thePacific Ocean.

However, the criterion for membership is that the member is a separate economy, rather than astate. As a result, APEC uses the term member economiesrather than member countriesto refer

to its members. One result of this criterion is that membership of the forum

includesTaiwan(officially the Republic of China, participating under the name "ChineseTaipei") alongsidePeople's Republic of China(seeCross-Strait relations), as well asHong Kong,

which entered APEC as a British colony but it is now aSpecial Administrative Region of the

People's Republic of China.APEC also includes three official observers:ASEAN,thePacificIslands Forumand thePacific Economic Cooperation Council.[1]

Member economy (name as used

in APEC)

Date of

accession

Australia November 1989

Brunei Darussalam November 1989

Canada November 1989
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in APEC)

Date of

accession

Indonesia November 1989

Japan November 1989

South Korea November 1989

Malaysia November 1989

New Zealand November 1989

Philippines November 1989

Singapore November 1989

Thailand November 1989

United States November 1989

Chinese Taipei[6] November 1991

Hong Kong[7] November 1991

People's Republic of China November 1991
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in APEC)

Date of

accession

Mexico November 1993

Papua New Guinea November 1993

Chile November 1994

Peru November 1998

Russia November 1998

VietnamNovember 1998

ASEAN

Association of Southeast Asian NationsFrom Wikipedia, the free encyclopedia

(Redirected fromASEAN)

Association of Southeast Asian Nations
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Flag Emblem

Motto:

"One Vision, One Identity, One Community"[1]

Anthem:The ASEAN Way

MENU

0:00

Headquarters Jakarta,Indonesiaa

Working language English[show]

Membership

10 states[show]

2 observers[show]

Leaders

- Secretary General L Lng Minh[2]
http://en.wikipedia.org/wiki/Flag_of_the_Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Emblem_of_the_Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-1http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-1http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-1http://en.wikipedia.org/wiki/The_ASEAN_Wayhttp://en.wikipedia.org/wiki/The_ASEAN_Wayhttp://en.wikipedia.org/wiki/The_ASEAN_Wayhttp://en.wikipedia.org/wiki/Jakartahttp://en.wikipedia.org/wiki/Jakartahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Working_languagehttp://en.wikipedia.org/wiki/Working_languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/Member_states_of_the_Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Member_states_of_the_Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/List_of_Secretaries_General_of_ASEANhttp://en.wikipedia.org/wiki/List_of_Secretaries_General_of_ASEANhttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/Vietnamhttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/File:Association_of_Southeast_Asian_Nations_(orthographic_projection).svghttp://en.wikipedia.org/wiki/Vietnamhttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/File:Association_of_Southeast_Asian_Nations_(orthographic_projection).svghttp://en.wikipedia.org/wiki/Vietnamhttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/File:Association_of_Southeast_Asian_Nations_(orthographic_projection).svghttp://en.wikipedia.org/wiki/Vietnamhttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/File:Association_of_Southeast_Asian_Nations_(orthographic_projection).svghttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/L%C3%AA_L%C6%B0%C6%A1ng_Minhhttp://en.wikipedia.org/wiki/List_of_Secretaries_General_of_ASEANhttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Member_states_of_the_Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/English_languagehttp://en.wikipedia.org/wiki/Working_languagehttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Jakartahttp://en.wikipedia.org/wiki/The_ASEAN_Wayhttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-1http://en.wikipedia.org/wiki/Emblem_of_the_Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Flag_of_the_Association_of_Southeast_Asian_Nations


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- SummitPresidency Burma(Myanmar)[3]

Establishment

- Bangkok Declaration 8 August 1967

- Charter 16 December 2008

Area

- Total 4,479,210.5 km2

2,778,124.7 sq mi

Population

- 2011 estimate 602,658,000

- Density 135/km2

216/sq mi

GDP(PPP) 2011 estimate

- Total US$ 3.574 trillion[4]

- Per capita US$ 5,930

GDP(nominal) 2013 estimate

- Total US$ 2.403 trillion

- Per capita US$ 3,909

HDI(2013) 0.669b

medium

Currency 10 currencies[show]

Time zone ASEAN(UTC+9to+6:30)

Calling code 10 codes[show]
http://en.wikipedia.org/wiki/ASEAN_Summithttp://en.wikipedia.org/wiki/ASEAN_Summithttp://en.wikipedia.org/wiki/Burmahttp://en.wikipedia.org/wiki/Burmahttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-3http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-3http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-3http://en.wikipedia.org/wiki/ASEAN_Declarationhttp://en.wikipedia.org/wiki/ASEAN_Declarationhttp://en.wikipedia.org/wiki/ASEAN_Charterhttp://en.wikipedia.org/wiki/ASEAN_Charterhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-4http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-4http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-4http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/ASEAN_Common_Timehttp://en.wikipedia.org/wiki/Coordinated_Universal_Timehttp://en.wikipedia.org/wiki/Coordinated_Universal_Timehttp://en.wikipedia.org/wiki/Coordinated_Universal_Timehttp://en.wikipedia.org/wiki/UTC%2B6:30http://en.wikipedia.org/wiki/UTC%2B6:30http://en.wikipedia.org/wiki/UTC%2B6:30http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/UTC%2B6:30http://en.wikipedia.org/wiki/Coordinated_Universal_Timehttp://en.wikipedia.org/wiki/Coordinated_Universal_Timehttp://en.wikipedia.org/wiki/ASEAN_Common_Timehttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-4http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/ASEAN_Charterhttp://en.wikipedia.org/wiki/ASEAN_Declarationhttp://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#cite_note-3http://en.wikipedia.org/wiki/Burmahttp://en.wikipedia.org/wiki/ASEAN_Summit


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Internet TLD 10TLDs[show]

Website

www.asean.org

a. Address: Jalan Sisingamangaraja No.70A,South Jakarta.

b. Calculated usingUNDPdata from member states.

Wikisourcehas original

text related to this article:

Bangkok Declaration

The Association of Southeast Asian Nations[5](ASEAN/si.n/ -see-ahn,[6]/zi.n/ -

zee-ahn)[7][8]is a political and economic organisation of ten countries located inSoutheast Asia,

which was formed on 8 August 1967 byIndonesia,Malaysia,thePhilippines,SingaporeandThailand.[9]Since then, membership has expanded toincludeBrunei,Cambodia,Laos,Myanmar (Burma)andVietnam.Its aims includeacceleratingeconomic growth,social progress,sociocultural evolutionamong its members,protection of regional peace and stability, and opportunities for member countries to discussdifferences peacefully.[10]

ASEAN covers a land area of 4.46 million km, which is 3% of the totallandarea of Earth, and has apopulation of approximately 600 million people, which is 8.8% of the world's population. The seaarea of ASEAN is about three times larger than its land counterpart. In 2012, its combinednominalGDPhad grown to more than US$2.3 trillion.[11]If ASEAN were a single entity, it would rank as the

sixth largest economy in the world, behind the US, China, India, Japan and Germany.

History[edit]

See also:Member states of the Association of Southeast Asian Nations
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A clickableEuler diagramshowing the relationships between various Asianregional organisationsvde

The member states of ASEAN

ASEAN was existing before by an organisation called theAssociation of Southeast Asia(ASA), agroup consisting of the Philippines, Malaysia and Thailand that was formed in 1961. The bloc itself,

however, was inaugurated on 8 August 1967, whenforeign ministersof five countriesIndonesia,

Malaysia, the Philippines, Singapore, and Thailandmet at the Thai Department of Foreign Affairs

building inBangkokand signed the ASEAN Declaration, more commonly known as theBangkok

Declaration.The five foreign ministersAdam Malikof Indonesia,Narciso Ramosof the

Philippines,Abdul Razakof Malaysia,S. Rajaratnamof Singapore, andThanat Khomanof Thailand

are considered the organisation's Founding Fathers.[12]

The motivations for the birth of ASEAN were so that its members governing elite could concentrate

onnation building,the common fear of communism, reduced faith in or mistrust of external powers in

the 1960s, and a desire for economic development.

The block grew whenBrunei Darussalambecame the sixth member on 8 January 1984, barely a

week after gaining independence on 1 January.[13]
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liberalization is a process whereby structural reforms are initiated in the

economy.

Economic liberalization involves the following major changes:-

i) changes in the outlook

ii) Technological up gradation

iii) Changes in trade, fiscal, monetary, price and industrial policies

iv) Opening the economy for foreign investment

v) Delicensing and enhancing export incentives.

Economic liberalization attempts to remove restrictions and make an

economy

global in its approach. Economic liberalization and globalization go hand in

hand.

Economic liberalization facilitates global integration of open economies.

After Second World War, countries of the world followed the policy of

protection

so as to rehabilitate the war shattered economies. But it led to adoption of a

retaliatory

policy on the part of other countries of the world. It is called as the policy of

tit for tat

which led to the lowering down of the volume of trade, lowering down of

competitiveness, efficiency, income and employment. Hence all these things

triggered

off the wave for speedy liberalization by reducing tariff barriers. It paved the

way for

economic integration among the countries of the region and also among the

countries of


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the world. When economic integration takes place among the regional

economic

integration. On the other hand when economic integration takes place among

the

countries of the world it gets referred to as multilateral economic integration.

E.U,

NAFTA, ASEAN, OPEC, SAARC are some of the glaring examples of

regional

economic examples while GATT which later on got merged into WTO are

the glaring

examples of multilateral economic integration. A very important point to be

noted in

connection with economic integration is that economic integration entails

some extent of

political integration too if not full political integration.

2.1.1 CONCEPT

The Term economic integration has been interpreted in different ways. Some

authors even include social and political integration in economic integration.

As per some authors the mere existence of trade relations between two or

more

independent national economies signifies economic integration.

As per some authors economic integration is a type of an arrangement which

leads to removal of artificial trade barriers for example tariffs between two

or more

independent economies.

Economic integration is a general term which covers several kinds of


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arrangements by means of which two or more independent economies agree

to come

closer economically. By economically integrating themselves in the form of

a union they

would like to discriminate against goods produced by countries of the rest of

the world

lying outside the economic union.

As per Timbergen economic integration is the creation of most desirable

structure of international economy removing artificial barriers to the

optimum operation and introducing deliberately all desirable elements of

coordination or unification.While

defining the term economic integration he draws a distinction between two

types of

economic integration viz. positive and negative economic integration.

Positive economic

integration refers to bring about reforms in the existing institutional

arrangement,

checking out the neo policy to correct the market imperfections. On the other

hand the

negative economic integration refers to removal of artificial barriers like

tariffs on he

movement of goods among the member countries of the group.

Mr. Balasa defines economic integration as, a process and as a state of

affairs.

As a process it encompasses measures designed to abolish discrimination

between


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economic units belonging to different national states; viewed as a state of

affairs, it can

be represented by the absence of various forms of discrimination between

national

economies.

While interpreting the term economic integration he draws a distinction

between

economic integration and economic co-operation. The nature of the

difference is both

quantitative and qualitative. Co-operation entails action leading to lessen the

severity of

discrimination while economic integration is a process which leads to

adoption of

measures which can be used for the suppression of some form of

discrimination. For

example G.A.T.T. or W.T.O. are the examples of cooperation. It is an

agreement

between the member countries of the world about the trade policies to be

pursued in

order to intensity the volume of trade among the member countries of the

world while

removal of trade barriers the tariffs and other non-tariff barrier is an example

of

economic integration.

2.2 CAUSES OF THE POPULARITY OF ECONOMIC INTEGRATION:-

Now a days economic integration is becoming more popular because of the


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mutual benefits which spring up from economic integration. United we

stand divided we

fall. In economic integration the economic activities of the member

countries are

harmonized, co-ordinated and unitedly operated.

Following are the reasons of the popularity of economic integration:-

i) Widening of market:- By regional grouping or integration the domestic

market gets

widened. There happens to be a move from domestic market to a regional

market.

ii) Economies of scale:- Due to regional integration or grouping production

takes place

at a very large scale due to specialization. Due to specialization economies

Eco. Integration Rough

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