An economist would say that the benefits of regional integration are determined by the amount of trade creation.
Regional integration is when two or more countries come together in order to agree to work together for the benefit of all countries involved in the integration.
Forms of regional integration
- Free trade area: this is when countries agree to remove the barriers to trade.
- Customs union: this when restrictions to trade are removed for both member countries and non member countries.
- Common market: in addition to the removal of restrictions to trade, there is also free movement of labour among member countries.
- Economic union: member countries adopt similar economic policies.
Benefits of regional integration
- It increases market efficiency.
- It enhances global integration.
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