Advantages And Disadvantages Of Economic Integration

Another disadvantage that may plague the country from free trade is the higher cost domestic production is replaced by a less costly and more efficient operating facility, also this will bring a change in the supplier as well, as the lower priced vendors (external) will be replaced by higher marked suppliers.

There have been various stages of economic growth between the countries of the European Union since 1958, when its history began. The pen-ultimate stage of its integration was a common or single market. Within a single market there a no tariffs between member countries and there are common external tariffs against countries outside the agreement. A single market is a strong form of integration involving the establishment of a common system of taxation, common laws relating to employment

Defined by the International Monetary Fund as "the increasing integration of economies around the world, particularly through the movement of

Integration is the combination of two or more things to form a whole. In this case integration is the bringing together of all of the European countries as one. The nationalistic causes of the world wars had devastated

 Some argue that the current degree of integration is an economic union with an  evolving common political structure (but this is not entirely true given that all countries  do not share a common fiscal policy).   EU Objectives    Provide for free internal flow of production factors:   o Labour   o Capital   o Products    Provide protection for European industry and workers (free trade within and  protection outside countries)  o Tariffs and quotas applied to most basic commodities and services    Steel, Coal, Textiles, Agricultural Products    Banking,

Europe has been quite successful in integrating its economies because of the various geopolitical and economic activities. The first and foremost reason is that these countries are small and the economy of the one country can be integrated with the economy of the other country. Their integration has been made possible because the aspiration and believe of the different countries are very much similar. Moreover, their cultural and economic history is moreover same. European Union as it has been called now has been the most developed model of the regional integration though challenged by economic crisis now a days.

The EU and the trade agreements entered into by member countries are examples of economic integration and cooperation. The benefits of joining an economic or trading bloc and reducing trade barriers can be plenty and they encourage countries to join them, and can be gained by all of the countries who are part in the economic integration agreement.

Trade barriers to trade can be categorized into two different types, tariff and nontariff barriers. Tariff barriers are taxes that are put into place in order to increase the price of imports inside the country that the product is being imported into. This allows for the domestic companies to gain a competitive advantage by ultimately reducing competition from foreign producers. Tariff are not only put on import but exports as well. This will increase revenue and will also keep product/technology within the country in the name of national safety or defense. An example of this can be seen in the United States agriculture. The

The world economy today is characterized by a lot of different processes constantly changing its essence. Thus, the topicality of this paper is based on an increasing number of countries recognizing their interdependence and therefore the relevance of the integration associations without which it is difficult to imagine the relationship between any of the countries. Economic integration at the international level implies a cooperation of economies tend to pursue mutual assistance and development, mainly in the area of trade.

 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

Since the mid-20th century, countries have progressively reduced barriers, subsidies to domestic industries and diverse restrictions on international commerce in order to promote specialization and greater efficiency in production. In theory, free trade allows nations to focus on their main comparative advantages and profit from cooperation and voluntary trade. This strategy is usually reinforced by treaties between two or more countries where commerce of goods and services can be handled across their common borders, without tariffs and other trade obstacles. As a key component of regional integration in the Americas, CAFTA-DR is one important example of this economic ideology.

When trade gets diverted from an efficient producer which are outside the trading area, is called Trade Diversion. This would lead to the loss of efficient producers. Example: Inefficient farmers of European Union protected from low-cost imports that may come from developing countries.

Companies move to developing and third world countries for cheaper production cost. In those countries may be they do not need to provide the workers any benefits and the salary requirement is lower compared to what they had to pay in the home country. In this way the industrialized countries exploit the labor force of less economically developed country. They pay them less but earn more profit (by reducing labor expense). Child labor is also an

Many companies, particularly those in the retail sector, have suggested that tariffs present the greatest barrier to cross-border e-commerce. This problem does not exist within the EU, which is a free-trade area; however, when exporting to countries outside of the EU tariffs are, indeed, a major problem. One business suggested that “outside of the EU, tariffs are always the most problematic”. Tariffs raise the price of the products sold by e-traders and consequently reduce their competitiveness. Tariffs are, however, not more of a problem for e-commerce than they are for traditional trade. Therefore, in this study we have chosen not to delve deeper into the levels of the tariffs, but instead to focus

The current international system is characterized by growth in globalization hence regional integration is becoming a common phenomenon in most parts of the world. As a result of states becoming more interconnected, most of them have opted for regional integration so as to enhance trade between states thus boosting economies of the states as well as the regions as a whole. Besides free trade, regional integration has seen to it the elimination of trade barriers, free movement of goods and people across borders, regional co-operation in issues to do with peace and security within the regions among various other benefits of regional integration. One of the regions that has grown as a result of regional integration is the European Union (EU), which is an economic and political partnership composed of 28 European countries. This paper will focus on the EU and give a theoretical analysis of the Brexit while giving lessons of integration and liberalization based on the Brexit.