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THEORIES OF ECONOMIC INTEGRATION, María José Ibarra de la Peña …

- - - - Accommodating interest groups support and promoting economic welfare
  - - - Competition policy
      - Product standards
      - Tax policy
      - Administrative procedures
      - Investment policy
      - Labor standards
      - Environmental standards
- - - - Trade shifts from a high-cost supplier member country to a low-cost supplier member country of the union
      - It raises the home country´s welfare
    - - Imports are shifted from a low-cost supplier of a non-member country of the union to a high-cost supplier member country inside the union
  - - - Where demand was allowed to be more elastic, a custom union may increase the volume of trade
        
        Even if there is trade diversion
      - Tradtional theory concentrates on the effect of tariff reduction on a single commodity
        
        Secondary effects of this reduction should be considered on complement and substitute goods
        
        To gain additional welfare
      - Integration between potentially complementary countries may be welfare increasing
      - There is no general conclusion of the benefits of forming economic integration schemes
      - Benefits depend on the specific circumstances of the case
    - - Consumption effects and production effects of integration
        
        show
        
        The impact of economic integration scheme on welfare
      - Customs union will produce welfare gains to a country the higher is the proportion of trade with its partner in the union
        
        And the lower the proportion with the rest of the world
      - Countries most likely to benefit form economic integration are those with lower volumes of foreign trade as a percentage of its GDP
    - - Trade diversion may not always be a bad thing in economic welfare
      - Substitution effects that provide consumers with lower prices after the elimination of tariffs on imports.
    - - Small tariff reductions are preferable to large reductions
    - - Tariffs should be reduced gradually
    - - Countries should enjoy more trade potential if they have similar per capita incomes
- - - - Developing countries rely on the regional market
    - - Entrance or openness to world markets
        
        When developing countries achieve efficiency and technical development
- - - - Derives from political concepts and efforts
      - Is forced to work on economically insufficiently prepared national economic agents