types of economic integration Flashcards
What does FTA stand for?
Free trade area
what is a free trade area?
when at least two countries agree to eliminate tariffs, quotas on most if not all goods traded between them
examples of FTAs
NAFTA and EFTA
what is a customs union?
a type of trade bloc which is composed of a free trade area with a common external tariff
examples of customs unions
the EU, SACU(South African customs union with Lesotho, Botswana, Namibia)
what is a common external tariff?
each country in the customs union will impose an identical tariff on every country outside the CU
what is a monetary union?
a group of different countries that use the same currency
what are some examples of a monetary union?
Euro- countries in the Euro zone, USD$ - USA, puerto rica, panama, Ecuador,El Salvador
what is an economic union?
integrates member economies into a single market with common policies on product regulation and freedom of movement of factors of production
what is an issue with being in a monetary union
you cannot manage your own monetary policy
what are examples of an economic union?
the European union, ASEAN
does an economic union have to be a monetary union?
no
what is a full economic and political union?
involves free trade, a common external tariff, a single market, monetary union and a fiscal and supply-side union
what are examples of full economic and political union
USA,UK
Why is the EU not considered a full economic and political union
The EU has 27 different central governments whereas somewhere like the USA or UK have only one
