Describe the different types of regional economic integration and give an example of each type.
Answer:
a. Free trade area (FTA): The goal of a free trade area is to abolish all tariffs among member countries. Free trade agreements usually begin modestly by eliminating tariffs on goods that already have low tariffs, and there is usually an implementation period over which all tariffs are eliminated on all products. In addition, each member country maintains its own external tariffs against non-FTA countries. Examples: the North American Free Trade Agreement, the Association of South East Asian Nations
b. Customs union: In addition to eliminating internal tariffs, member countries levy a common external tariff on goods being imported from nonmembers. Example: MERCOSUR
c. Common market: A common market has all the elements of a customs union, plus it allows free mobility of production factors such as labor and capital. Example: the European Union