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Transition to Modern Age

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Submitted By yogin
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• Chapter 9: Regional Economic Integration o Regional Integration and Economic Blocs
• Under regional economic integration, groups of countries form alliances to promote free trade, cross-national investment, and other mutual goals.
• This integration results from regional economic integration blocs (or economic blocs), in which member countries agree to eliminate tariffs and other restrictions on the cross-national flow of products, services, capital, and, in more advanced stages, labor within the bloc.
• At minimum, the countries in an economic bloc become parties to a free trade agreement, which eliminates tariffs, quotas, and other trade barriers. o Levels of Regional Integration
• For countries that become members of an economic bloc, there are various stages of regional integration.
• First is the free trade area, which eliminates tariffs and other trade barriers.
• Second is the customs union, a free trade area in which common trade barriers are imposed on nonmember countries.
• Third is the common market, a customs union in which factors of production move freely among the members.
• Fourth is the economic union, a common market in which some important economic policies are harmonized among the member states.
• A true political union does not yet exist. o The Leading Economic Blocs
• There are hundreds of economic integration agreements in the world.
• The European Union (EU) is the most advanced, comprising twenty-seven countries in Europe.
• It has increased market access, improved trade rules, and harmonized standards among its members.
• Europe is also home to the European Free Trade Association.
• In the Americas, the most notable bloc is the North American Free Trade Agreement (NAFTA), consisting of Canada, Mexico, and the United States.
• NAFTA has reached only the free-trade-area stage of regional integration.
• Other

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