Advantages And Disadvantages Of Economic Integration

Introduction

Economic activity is one of the dominant sectors in the life of a country. The economic activity is not only happening within a country but it is also can happen between countries. Moreover, the amount activity of economic activity of a country increasing significant recently, since we are entering the global era. This increasing of economic activity of countries leads them into the new creation of economic activities, which is the regional economic activity. Most governments of the countries acknowledged that the regional economic activity bring many advantages to their treasury fund. Thus, this is also leads to the creation of economic integration in specific regions.

The economic integration is defines as an agreement among countries in a geographic region to reduce and ultimately remove, tariff and non-tariff barriers to the free flow of goods or services and factors of production among each other’s; any type of arrangement in which countries agree to coordinate their trade, fiscal, and/or monetary policies are referred to as

The regulation in Free Trade Area is reducing the tariffs (a tax imposed on imported goods) moreover some is abolished together. The general goal of FTA is to develop economies scale and comparative advantages, promotes the economic efficiency. An example of FTA in European region is European Union Free Trade Association (EFTA). It is an intergovernmental trade organization of European Union with other countries in Europe regions. They are Iceland, Liechtenstein, Norway and Switzerland. Since the early 1990s, the EFTA has established an extensive network of contractual free trade relations all over the world. While an example of FTA in American region is North American Free Trade Agreement (NAFTA). NAFTA is an agreement signed by Canada, Mexico and the United States in creating a trilateral trade bloc in North America, as like EFTA in