Investing in Sin Industries: Are They Worth the Hassle ?
Some professions in the world are not considered to be as acceptable as others. This notion of acceptability is widely influenced by the cultural norms in the society where one is conducting business. However, in the modern world, being associated with sin does not seem to be much of a deterrent to investors. Cities like […]
How to Draw a Scatter Plot
When scatter plots were discovered, drawing them was a complex task. It often required the use of statisticians and scientists. In the more recent past most of the drawing has been automated. However there is still a large amount of human involvement as well as human judgement which is required. The steps are mapped as […]
Is Globalization to Blame for the Economic Crisis ?
The global economic crisis that started in 2008 has engulfed the entire world and has laid waste to the process of globalization that was blamed by many as being the root cause of the crisis. After the American Investment Bank, Lehmann Brothers filed for Bankruptcy in September 2008, the entire global financial system was at […]
Why is Sweden Facing a Currency Crisis?
Sweden is not really a country that comes to find when one talks about finance or currency trading. The Swedish Krona is a relatively small and insignificant player in the global market. Trading in Swedish Krona accounts for less than 2% of the global currency trades. However, the Krona is what many call a counter […]
The Green New Deal
In the year 2019 the concept of “The Green New Deal” was introduced in American politics. The idea was floated by Alexandria Ocasia-Cortez and it became very popular amongst all Democrats. Almost all the Democrats who plan to run for President have come out in support of the Green New Deal. The idea has also […]
No doubt international trade has existed spanning civilizations, in the current global economic situation no country can keep away without participating in international trade. Countries are moving cautiously away from capitalistic and protectionist outlook and engaging in trade with other countries.
With the creation of WTO, there have been constant efforts made to unite countries to create more markets, to standardize tariffs and trade laws as well as remove trade barriers in trying to create free markets.
We have seen very many bi lateral and multi lateral agreements taken place that have harmonized international trade to a large extent. Together with the agreements, several countries have begun to form unions to harmonize and free trade regulations within themselves in a bid to create free markets. One such example is the Economic Union of European Countries. Initially EU was a Customs Union that further developed into Economic Union.
Countries have also formed several other types of unions as well as zones in a bid to give impetus to international trade. We shall discuss a few of them briefly in this article.
Customs Union refers to a coming together of member countries to form a union where in they allow free trade amongst the member countries without customs duties and tariffs. However they formulate a common external trade policy to determine common import duties that are levied for imports from a third party country other than the member country.
Customs Union is the first step towards harmonizing and removing trade barriers to facilitate smoother and increased trade flow within the member groups. This would result in increased economic efficiency and improve political relationships amongst the members too paving way for further economic integration.
The Customs Union of Zollverein which was formed out of coming together of German States is another example of Customs Union. Customs Union can also be called Free Trade Zones with common Trade Tariffs and Policies.
Customs Union can also be called Free Trade Zones with common Trade Tariffs and Policies.
Customs Union is the first step towards building Economic integration that leads to formation of common markets and economic unions and federation.
Common markets allow free movement of all resources including labor, capital as well as other resources without tariffs and formalities.
Economic Union is a trade bloc, which consists of both free markets and Customs Union pwithin the member community.
Economic Unions involve close co-ordination and integration of economic and fiscal policies of the member countries
Examples: European Union, CARICOM - Single Market and Economy of Caribbean Community.
Creation of Economic Union paves way for creating a Monetary Union and further evolves into a Customs and Monetary Union.
Under this Union, member countries enjoy common economic union with free markets with no restriction on movement of goods, labor, capital and resources across member countries, common tariffs for external trade, besides combining it with a common monetary currency system.
Examples: Common Monetary and Economic Community of Central Africa.
Economic Union and Monetary Unions finally lead up to Complete Economic Integration as the final stage. In Economic Integration, the member countries operate with single currency and fiscal policy coupled with single economic policy and function as single economy.
To achieve and stabilize single economy, it necessitates the political integration, which brings into being the concept of United Countries with autonomous states governed by federal government. United States of America is the outstanding example of such integration evolving into one Nation.
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