Identify the correct sequence of economic integration starting from the least integrated to the most integrated. free trade area, customs union, common market, economic union, and political union

The correct answer is Free Trade Area, Customs Union, Common Market, Economic Union, Political Union.

Explanation: Economic integration is an agreement among countries in a geographic region to improve trade between the companies. It is any type of arrangement in which countries agree to coordinate their trade, fiscal, and/or monetary policies in order to improve trade. The five types of economic integration are listed below in order from least integrated to most integrated.

Free Trade Area

Customs Union

Common Market

Economic Union

Political Union

Identify the correct sequence of economic integration starting from the least integrated to the most integrated. Free trade area, customs union, common market, economic union, and political union

The correct sequence of economic integration is –  

Explanation:

Economic integration refers to the agreement between the economies of the world in a given geographic region in order to reduce trade barriers such as removal of trade tariffs, free flow of goods, etc. This facilitates global trade and economic cooperation wherein the countries engage them in encouraging and promoting the trade business of each other.

Further Explanation:

The foremost step in the economic integration is Free Trade Agreements. The free trade agreements are referred to as the arrangement between the signatory countries to decide upon the terms and agreements of trade between the signatory countries. These agreements can result in the removal of import quotas and import tariffs, resolution of other trade disputes, etc. Hence it will be right enough to state that these agreements either are influenced or influence the foreign policy of the states.  

The second step in ensuring economic integration is the Customs Union. The customs union brings together the countries into a common agreement to determine import duties among the countries.

The Common Market is referred to as the free movement of labour, capital and resources between the member countries in order to adhere to the spirit of the free market.

The Economic Union refers to the establishment of a common market where the fiscal and monetary policies are consolidated in order to encourage the economic development between economies and regions.

Lastly, the Political Union refers to the integration of the economies in a manner which even results in the weakening of the sovereignty of a state. Hence this type of integration leads to the formation of a common market and a common market policy between the countries and the states.  

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Keywords

Importance of economic integration, economic cooperation between the countries, increasing need for globalization, stages of economic integration, economic integration process.

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