REGIONAL INTEGRATION:
Regional integration is the willingness of a country to open up the borders for other countries. The border can the for Foreign trade, for FDI.
There are 3 physical borders between any 2 countries. They are:
- Land Border
- Water Border
- Air Border
Stages of Regional Integration:
Stage 1:(Free Trade Area)
In this stage 2 countries will open up for Free Trade Area(FTA). Here Free Trade Area means trading without any restriction. The benefits of FTA are, it provides employment, it introduces new technology to countries and it also starts foreign exchanges.
Eg) Let us consider Banana Republics. In olden days the methods of banana production in those countries is sufficient for the consumers because the demand for bananas is less in those days. But later due to increase in demand for bananas some of the foreign countries started FTA with the countries of Banana Republic, given employment to the people in those countries, introduced new methods in producing bananas.
The problem with free trade area is after production the exports are done with some sort of customs.
Stage 2: ( Customs Union)
In this stage if there is customs union between any 2 countries, then those countries combines together and forms a border. With this, the 2 countries can export and import in parts of countries which cannot be done in the case of Free Trade Area.
Stage 3: (Common Market)
In this stage, the products of any country can be brought from any country and supplied.\
For Example,
let us consider the E-commerce giant Amazon.com. A person can order products from Amazon.com from any country and get that products delivered.
But the only problem in this Common Market is different types of currencies exist for different countries.
Stage 4: (Common Currency)
The final stage in regional integration is common currency in which payment is done with the currency of the country which makes the order, but the recipient receives the payment in their currency.
U.Sruthi
161247
Regional integration is the willingness of a country to open up the borders for other countries. The border can the for Foreign trade, for FDI.
There are 3 physical borders between any 2 countries. They are:
- Land Border
- Water Border
- Air Border
Stages of Regional Integration:
Stage 1:(Free Trade Area)
In this stage 2 countries will open up for Free Trade Area(FTA). Here Free Trade Area means trading without any restriction. The benefits of FTA are, it provides employment, it introduces new technology to countries and it also starts foreign exchanges.
Eg) Let us consider Banana Republics. In olden days the methods of banana production in those countries is sufficient for the consumers because the demand for bananas is less in those days. But later due to increase in demand for bananas some of the foreign countries started FTA with the countries of Banana Republic, given employment to the people in those countries, introduced new methods in producing bananas.
The problem with free trade area is after production the exports are done with some sort of customs.
Stage 2: ( Customs Union)
In this stage if there is customs union between any 2 countries, then those countries combines together and forms a border. With this, the 2 countries can export and import in parts of countries which cannot be done in the case of Free Trade Area.
Stage 3: (Common Market)
In this stage, the products of any country can be brought from any country and supplied.\
For Example,
let us consider the E-commerce giant Amazon.com. A person can order products from Amazon.com from any country and get that products delivered.
But the only problem in this Common Market is different types of currencies exist for different countries.
Stage 4: (Common Currency)
The final stage in regional integration is common currency in which payment is done with the currency of the country which makes the order, but the recipient receives the payment in their currency.
U.Sruthi
161247
No comments:
Post a Comment