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INTEGRATION - Coggle Diagram
INTEGRATION
Cause
Reduce trade barriers (tariffs, quotas)
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Examples
NAFTA: A massive free trade area between the US, Canada, and Mexico that removed 99% of tariffs.
ASEAN (AFTA): A successful model for developing nations that reduced intra-regional tariffs to 0–5%.
European Union (EU): A full economic and monetary union featuring a common currency, the Euro.
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Impacts of Intergration
Dynamic
Greater Competition: Removing protectionist barriers forces domestic industries to improve efficiency
Investment Stimulus: Integrated regions attract more foreign direct investment from both inside and outside the bloc.
Economies of Scale: Expanded market access allows firms to increase production and lower average costs.
Static
Trade Diversion: Lower-priced imports from outside the union are replaced by more expensive goods from a member.
Consumer Surplus: Consumers benefit from lower prices and increased demand after trade barriers are removed.
Trade Creation: High-cost domestic production is replaced by lower-priced imports from a member country.
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