Regional co-operation, using regional trade groupings or regional economic communities (RECs), has been a dominant feature in the development of trade policy since the end of the Second World War. Apart from the tariff reductions negotiated through the General Agreement on Tariffs and Trade (GATT) and, since 1995, under the World Trade Organization (WTO), the movement towards economic integration in Western Europe, Latin America, Africa, North America and Asia has been the most important development affecting the level and structure of international trade in the post World War II period. Many believe that integration of the economic (and ultimately political)
systems of nation states is a way of bringing about not only rapid economic growth but also lasting peace through increased trade.
Jacob Viner’s seminal work on customs union theory titled The Customs Union Issue, which was published in 1950, has stimulated a lot of intellectual research and interest in customs unions. However, in practical terms, the European attempt at economic integration, legalized by the Treaty of Rome in 1957, has been an inspiration and stimulus to other regions to engage in economic integration. The success of the European Union (EU), culminating in the single market in 1992 and a single currency in 1999, has been the envy of other regions. By 1998, a total of 98 regional integration schemes or agreements were identified but none had developed to the level of the EU.
The concept of international economic integration is central to the issue of regionalism and regional economic communities. According to Hine (1994), “international economic integration” describes both a state of affairs and a process. As a state, international economic integration refers to a fusion of formerly separate national economies while as a process it signifies the gradual elimination of economic frontiers between countries.
Economic frontiers may be defined as any demarcation over which mobility of goods, services and factors of production are relatively low. Thus, following Iyoha (2004), we may postulate that international economic integration is the attempt by the governments of 2 or more countries to link together their economies through the removal of economic frontiers under specific integration schemes.
African Development Bank Economic Research Working Paper Series Enhancing Africa’s Trade: From Marginalization to an Export-Led Approach to Development Milton A. Iyoha Professor, Department of Economics & Statistics University of Benin, Nigeria Economic Research Working Paper No 77 (August 2005)
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