Economic union

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An economic union is a type of trade bloc which is composed of a common market with a customs union.[ citation needed ] The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production (capital and labour) and a common external trade policy. When an economic union involves unifying currency it becomes an economic and monetary union.

A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade are reduced or eliminated among the participating states.

Customs union type of trade bloc with a free trade area and common external tariff

A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff. Customs unions are established through trade pacts where the participant countries set up common external trade policy. Common competition policy is also helpful to avoid competition deficiency.

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Purposes for establishing an economic union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries.

In microeconomics, economic efficiency is, roughly speaking, a situation in which nothing can be improved without something else being hurt. Depending on the context, it is usually one of the following two related concepts:

Economic union is established through trade pact.

List of economic unions

Stages of economic integration around the World (each country colored according to the most integrated form that it participates with):
Economic and monetary union (CSME/EC$, EU/EUR, Switzerland-Liechtenstein/CHF)
Economic union (CSME, EU, EAEU, MERCOSUR, GCC, SICA)
Customs and monetary union (CEMAC/XAF, UEMOA/XOF)
Common market (EEA-Switzerland, ASEAN
)
Customs union (CAN, EAC, EUCU, SACU)
Multilateral Free Trade Area (CEFTA, CISFTA, COMESA, CPTPP, DCFTA, EFTA, GAFTA, NAFTA, SAFTA, AANZFTA, PAFTA, SADCFTA)
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Stages of economic integration around the World (each country colored according to the most integrated form that it participates with):
   Economic and monetary union (CSME/EC$, EU/, Switzerland–Liechtenstein/CHF)
   Common market ( EEA–Switzerland, ASEAN )
CARICOM Single Market and Economy common market

The CARICOM Single Market and Economy, also known as the Caribbean Single Market and Economy (CSME), is an integrated development strategy envisioned at the 10th Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) which took place in July 1990 in Grand Anse, Grenada. The Grand Anse Declaration had three key Features:

  1. Deepening economic integration by advancing beyond a common market towards a Single Market and Economy.
  2. Widening the membership and thereby expanding the economic mass of the Caribbean Community.
  3. Progressive insertion of the region into the global trading and economic system by strengthening trading links with non-traditional partners.
Eurasian Economic Union economic union of northern and central Asian and eastern European countries

The Eurasian Economic Union (EAEU) is an economic union of states located in central and northern Asia and Eastern Europe. The Treaty on the Eurasian Economic Union was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on 1 January 2015. Treaties aiming for Armenia's and Kyrgyzstan's accession to the Eurasian Economic Union were signed on 9 October and 23 December 2014, respectively. Armenia's accession treaty came into force on 2 January 2015. Kyrgyzstan's accession treaty came into effect on 6 August 2015. It participated in the EAEU from the day of its establishment as an acceding state.

European Union Economic and political union of European states

The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. It has an area of 4,475,757 km2 (1,728,099 sq mi) and an estimated population of about 513 million. The EU has developed an internal single market through a standardised system of laws that apply in all member states in those matters, and only those matters, where members have agreed to act as one. EU policies aim to ensure the free movement of people, goods, services and capital within the internal market, enact legislation in justice and home affairs and maintain common policies on trade, agriculture, fisheries and regional development. For travel within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002 and is composed of 19 EU member states which use the euro currency.

Note: Every economic and monetary union includes an economic union.

Economic and monetary union trade bloc with a common tariff and currency

An economic and monetary union (EMU) is a type of trade bloc composed of an economic union with a monetary union.

Additionally the autonomous and dependent territories, such as some of the EU member state special territories, are sometimes treated as separate customs territory from their mainland state or have varying arrangements of formal or de facto customs union, common market and currency union (or combinations thereof) with the mainland and in regards to third countries through the trade pacts signed by the mainland state. [5]

A dependent territory, dependent area or dependency is a territory that does not possess full political independence or sovereignty as a sovereign state yet remains politically outside the controlling state's integral area.

A customs territory is a geographic territory with uniform customs regulations. Existing customs territories consists fall into several types:

Currency union two or more states sharing the same currency without them having any further integration

A currency union is an intergovernmental agreement that involves two or more states sharing the same currency. These states may not necessarily have any further integration.

Proposed

African Economic Community international organization

The African Economic Community (AEC) is an organization of African Union states establishing grounds for mutual economic development among the majority of African states. The stated goals of the organization include the creation of free trade areas, customs unions, a single market, a central bank, and a common currency thus establishing an economic and monetary union.

Andean Community South American free-trade agreement

The Andean Community is a free trade area with the objective of creating a customs union comprising the South American countries of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence when the Cartagena Agreement was signed in 1969. Its headquarters are in Lima, Peru.

Arab Customs Union customs union

The Arab customs union is a customs union announced at the Arab League's 2009 Arab Economic and Social Development Summit in Kuwait in order to achieve a functional customs union by 2015 and an Arab common market by 2020 and to increase inter-Arab trade and integration.

See also

Related Research Articles

Economic Community of West African States intergovernmental economic unnion

The Economic Community of West African States, also known as ECOWAS, is a regional economic union of fifteen countries located in West Africa. Collectively, these countries comprise an area of 5,114,162 km2 (1,974,589 sq mi), and in 2015 had an estimated population of over 349 million.

Treaty of Rome Founding treaty of the European Union

The Treaty on the Functioning of the European Union is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union.

Eurozone Area in which the euro is the official currency

The eurozone, officially called the euro area, is a monetary union of 19 of the 28 European Union (EU) member states which have adopted the euro (€) as their common currency and sole legal tender. The monetary authority of the eurozone is the Eurosystem. The other nine members of the European Union continue to use their own national currencies, although most of them are obliged to adopt the euro in the future.

Trade agreement wide ranging taxes, tariff and trade treaty

A trade agreement is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that helps them trade with each other. The most common trade agreements are of the preferential and free trade types are concluded in order to reduce tariffs, quotas and other trade restrictions on items traded between the signatories.

East African Community intergovernmental bloc

The East African Community (EAC) is an intergovernmental organization composed of six countries in the African Great Lakes region in eastern Africa: Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. Paul Kagame, the president of Rwanda, is the EAC's chairman. The organisation was founded in 1967, collapsed in 1977, and was revived on 7 July 2000. In 2008, after negotiations with the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), the EAC agreed to an expanded free trade area including the member states of all three organizations. The EAC is an integral part of the African Economic Community.

Eurasian Economic Community

The Eurasian Economic Community was a regional organisation between 2000 and 2014 which aimed for the economic integration of its member states. The organisation originated from the Commonwealth of Independent States (CIS) on 29 March 1996, with the treaty on the establishment of the Eurasian Economic Community signed on 10 October 2000 in Kazakhstan's capital Astana by Presidents Alexander Lukashenko of Belarus, Nursultan Nazarbayev of Kazakhstan, Askar Akayev of Kyrgyzstan, Vladimir Putin of Russia, and Emomali Rahmon of Tajikistan. Uzbekistan joined the community on 7 October 2005, however later withdrew on 16 October 2008.

Economic Community of Central African States customs union

The Economic Community of Central African States is an Economic Community of the African Union for promotion of regional economic co-operation in Central Africa. It "aims to achieve collective autonomy, raise the standard of living of its populations and maintain economic stability through harmonious cooperation".

The Khaleeji was a proposed name for the common currency of the member states of the Gulf Cooperation Council for the Arab States (GCC).

Integration is a political and economic agreement among countries that gives preference to member countries to the agreement. General integration can be achieved in three different approachable ways: through the World Trade Organization (WTO), bilateral integration, and regional integration. In bilateral integration, only two countries economically cooperate with one another, whereas in regional integration, several countries within the same geographic distance become joint to form organizations such as the European Union (EU) and the North American Free Trade Agreement (NAFTA). Indeed, factors of mobility like capital, technology and labour are indicating strategies for cross-national integration along with those mentioned above.

European Union free trade agreements

The European Union has concluded free trade agreements (FTAs) and other agreements with a trade component with many countries worldwide and is negotiating with many others.

Customs and monetary union

A customs and monetary union is a type of trade bloc which is composed of a customs union and a currency union. The participant countries have both common external trade policy and share a single currency.

References

  1. Established by the Treaty of Chaguaramas in force from 1973-8-1 WT/REG92/R/B/1 Archived 2009-03-27 at the Wayback Machine
  2. Established by the Treaty of Rome in force from 1958-1-1. WT/REG138/2
  3. Gulf states form common market, BBC News. Retrieved 20 June 2016.
  4. "GCC customs union fully operational". The Peninsula. 3 January 2015. Archived from the original on 18 January 2015. Retrieved 20 June 2016.
  5. EU Overseas countries and some other territories participate partially in the EU single market per part four of the Treaty Establishing the European Community; Some EU Outermost regions and other territories use the Euro of the currency union, others are part of the customs union; some participate in both unions and some in neither.
    Territories of the United States, Australian External Territories and Realm of New Zealand territories share the currency and mostly also the market of their respective mainland state, but are generally not part of its customs territory.
  6. Twelfth Andean Presidential Council Act of Lima Archived 2010-07-07 at the Wayback Machine
  7. Leaders set to approve Arab customs union