Chapter 6: The Global Context
Textbook page 128-138
Facilitating Global Business: Regional Economic Integration
-REI:An economic arrangement between different regions marked by the reduction or
elimination of trade barriers and the coordination of monetary and fiscal policies. The aim of
economic integration is to reduce costs for both consumers and producers, as well as to
increase trade between the countries taking part in the agreement.
Regional Integration can happen at different levels of intensity.
1. Free Trade Area: involves removal of tariffs and non-tariff trade barriers on goods and
services traded internationally among member countries. Lowest form of regional economic
2. Customs Union: Involves the removal of trade barriers on goods and services traded
internationally among member countries. Greater degree of regional economic integration.
3. Common Market: includes the removal of trade barriers and implementation of a common
trade policy. Builds on the previous two forms.
4. Economic Union: Builds on the previous three forms. In addition to the previous three