Advantages and disadvantages of regional integration

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Regional integration is an economic and political choice made by two or more countries to join together to form a trade group or, in extreme circumstances, to form an entirely new country. When member states of a region integrate they can form simple trade blocs or complex political groups with common social and foreign policies.


Regional integration is a process that sees an agreement, or series of agreements signed by at least two countries who agree to cooperate in policies like trade and social policies. The most common forms of regional integration are the formation of trade agreements, such as the North American Free Trade Agreement between the US, Canada and Mexico, according to EU Learning. Under agreements like NAFTA a group of countries agree to remove or lower taxes and fees placed on goods passing between the nations; these agreements can also include the removal of limits on the number of goods moving between the same countries. As political ties grow the integration of nations can also grow, as with the EU where a common single currency has been created and adopted by the majority of member states.


In the realm of economic agreements the signing of trade agreements can stimulate cooperation between member states, which are commonly neighbouring countries that may also be historic rivals. Lowering the taxes paid on goods moving around an area of regional integration reduces the prices of these goods for local consumers and boosts sales. When trade agreements allow easier movement of goods across national borders considerable outside investment usually benefits the area of regional integration, bringing increased competition and more funding in industry.


The more closely a group of nations are linked, the more seriously problems in the economy of one nations impacts the others involved in the group. It is important that one nation is not capable of dominating a trade agreement or decision to integrate regionally; when a single nation is already industrialized and joins a group of less well developed nations, the benefits for the smaller countries might be limited. Some nations may not feel treated fairly when a number of countries integrate regionally and this can threaten the safety and security of the region as a whole.


As economic ties between nations grow so do political ties, leading to closer links between nations on social reforms and aspects of national security. When regional integration progresses, countries can become linked militarily and through centralised monetary policy. Although these political ties can benefit citizens, problems can sometimes develop if the general public does not understand the links between the integrated nations.

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