Regional Integration

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20/01/2013

European Regional Integration
EU Development and Impact Upon International Trade

The Founders of European Enterprise
• The European project began 50 years ago • Jean Monnet (left) and Robert Schuman (right) were the founders of the European enterprise • There was no model for them to follow in regional integration • The programme has been a mixture of politics, economics and ambitions

The Schuman Plan
9 May 1950
• First proposal as pooling of heavy industries (coal and steel) • Agreed by France, Germany, Netherlands, Belgium, Luxembourg and Italy • Creates institutions, the European Coal and Steel Community ECSC • Treaty of Paris entered into force in 1952 Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

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Stages of Economic Integration - Theory
• Free Trade Area (FTA):
• removes tariffs among members = free trade • members retain own trade policies & external tariffs

• Customs Union (CU):
• common trade policy, common external tariffs

• Common/Single Market (CM):
• eliminates all barriers to factor mobility

• Economic Union (EU):
• harmonization of economic policies

• Political Union (PU):
• full political and economic integration
Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

Political Union

“The gradual elimination of various forms of discrimination between national economies” Balassa, 1961

Economic Union

Common Market

Customs Union

Free Trade Area

Integration
Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

EU Regional Integration (i)
1952 European Coal & Steel Community 1967 European Communities 1973 9

1993 Treaty of Maastricht European Community

1958

6

European Economic Community & EURATOM

1981 10 1986 12

1987 Single European Act

Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

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EU Regional Integration (ii)
1999
1995 15

Treaty of Amsterdam

Treaty establishing a Constitution?

2007 27

2002

2004 25

2003 Treaty of Nice
Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

Officially not on agenda

Political Union

Early stages 1993 Partially 1999

Economic Union

Common Market

From 1993 to 1999
Customs Union

Theory: 1958 Practice: between 1960 and 1993

Free Trade Area

From 1958 to early 1960s

Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

Extent of Integration in the EU


Goods Markets


high but barriers remain medium/low low high but barriers remain medium



Services Markets




Labour Markets




Capital Mobility




Financial Markets


Hardacre, A. (2008) European Regional Integration, European Institute of Public Administration

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Four Freedoms of Movement
Goods

Persons

Services

Capital

Free movement of Goods
• Products must be traded freely from one part of the Union to another • NO internal tariffs or quotas • The absence of border bureaucracy has cut delivery times and reduced costs

Removal of Technical Barriers
• Any product legally manufactured and sold in one member state must be allowed to be placed on the market in all of the others • EU Directives and Regulations replace a large number of complex and different national laws with a single framework • New export markets have been opened up to small and mediumsized enterprises (SMEs) who previously would have been prevented from exporting by the costs and difficulties involved • Ensure wider choice of products and services – within the Euro Zone prices are easily compared • Shoppers have full consumer rights when shopping outside of their country

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Free Movement of Persons
• The EU citizens of one Member State...
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