Economic integration

?
  • Created by: Jeon32666
  • Created on: 14-03-19 07:56

ADV. & DISADV. of economic integration

Advantages

  • Integration provides the opportunity among member countries to take advantage of economies of scale
  • The possibility of coordinating industrial strategy is created
  • Increased competition may stimulate efficiency
  • Encourage investment
  • Reduce monopoly powers and more rapid spread of technology

Disadvantages

  • Trade diversion may occur
  • Small members may become a depressed region of the group
  • As a result of this, large members may become inefficient
  • Smaller high cost producers could be taken over or go out of business

Evaluation

In conclusion, it is pertinent to say that development of regional trading blocs may be better than facing trade barriers from individual nations but these blocs are inferior to worldwide free trade agreements

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Globalisation and trade resources »