ECONOMIC INTEGRATION
Economic integration can be defined as the rise of international trade through cross-country links in the markets for goods, services, and some factors of production. It plays an increasing role in multinational corporations, and international capital markets which support higher growth and higher employment. Exports from several countries reflect some of the tangible outcomes of economic integration across the globe.
In general, economic integration is expected to provide a slew of benefits to consumers. It would result in lower consumer prices because of increasing allocative efficiency through production structures based on comparative advantage, the exploitation of economies of scale in the bigger domestic and international markets, and the adoption of new technologies. The pace of international economic integration accelerated in the 1980s and 1990s. The sweep of economic reform and spectacular economic growth in China and the commitment to market-based reforms by India have added fuel to this process.
The establishment of the World Trade Organization (WTO) in 1995 created a favorable environment for settling multilateral international trade issues in an amicable manner. As a consequence of these developments, hundreds of global, regional, and bilateral integration processes have emerged, and many of them have taken root. Two hundred and sixty five regional trade agreements were notified to the WTO from 1995 to May 2003.
As a consequence of expanded consumer choices because of greater quantities and ranges of imports and exports, more competition, the dismantling of vested monopolies in domestic markets, higher productivity growth, and lower price markups, the average consumer in a country is better off with more trade ...