Degrees of Economic Cooperation Between Various Countries

Degrees of Economic Cooperation Between Various Countries An important trend that is noticed in international economy has been the growth of intra-regional trade and this type of trade has been fostered by the economic cooperation and integration schemes or trading blocs. International trade consists broadly of the following namely; 1 . Intra regional trade 2. Inter regional trade There is also a talk of rationalization vs. globalization of world trade. There has been world wide trade towards forming new regional arrangements in order to strengthen the existing ones.

Several regional integration schemes have been formed by the plopped and developing countries duly inspired by European Economic Commission. Effective from the second world war, countries are seeking increasing trade cooperation among themselves . When it comes to economic cooperation between the countries, there are many namely; agreement between two or more nations towards reduction in the barriers of trade and the full scale economic integration of two or more national economies.

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These trade alliances immensely help the international marketing prospects which include harmonistic of business requirements such as packaging requirements, a moon currency that allows the customers to more easily comparable pricing across countries and economic development that leads to more consumers who can afford to buy more products. Economic integration is found to be a global term which includes several forms of arrangements by which two or more countries agree to draw their economies close together .

It has been found that all these agreements have one common feature namely; using tariffs to discriminate against goods produced by countries which are not parties to the agreements. This kind of discrimination is achieved by providing referential treatment of goods produced by the other member countries. The four degrees of important economic cooperation and integration are as mentioned below: 1 . Free trade areas; 2. Customs union; 3. Common market and 4. Economic union Degrees of Economic Cooperation Between Various Countries By Classical When like minded countries combine together to bring about free trade between them, it is termed as free trade area. Through free trade all restrictions on trade among members are abolished. However, each member is free to chalk out his own commercial policy with non members. On this form of agreement, all forms of tariffs ND quotas between member countries are abolished. Customs Union: Customs Union eliminates all restrictions on trade among members and each member is left free to determine its own commercial policy with non members.

In this type of agreement, all internal barriers to trade are eliminated. Also this agreement provides for the establishment of common external barriers. Common Market: It is an advanced type of customs union and in this system, free movement of labor and capital within the common market area are allowed apart from free trading between the members and a uniform tariff policy towards the outsiders. Common arrest seeks to coordinate economic and social policy within the market towards allowing free flow of capital and labor from one country to another.

Economic Union: This form of agreement is a more advanced form of common market among different nations. In this system, there is free trade among member countries namely; tariffs and quotas are abolished and common tariff and quota system is established; all restrictions on factor movements are removed and there is harmonistic of economic, social and regulatory policies among member countries. Reference: http://classical . Com/homework-help/international-economics-homework-help/