Explain the five forms of economic integration and provide an example of each

What will be an ideal response?

The five forms of integration are free trade area, customs union, common market, economic union, and political union. The free trade area, such as NAFTA, represents the lowest form of economic integration while the political union represents the highest level of economic integration. A free trade area encourages trade among members by eliminating trade barriers. A customs union, such as the Mercosur Accord, combines the elimination of internal trade barriers among its members with the adoption of common external trade policies toward nonmembers. In a common market, such as the European Economic Area, members eliminate internal trade barriers among themselves and adopt a common external trade policy toward nonmembers, plus it eliminates barriers that inhibit the movement of factors of production among its members. An economic union, such as the EU, represents full integration of the economies of two or more countries. In addition to all the requirements of a customs union, an economic union also requires its members to coordinate their economic policies to blend their economies into a single entity. A political union is the complete political as well as economic integration of two or more countries, thereby effectively making them one country. An example of a political union is the integration of the 13 separate colonies operating under the Articles of Confederation into a new country, the United States of America.