IntroductionThe process of regional economic integration has led to the development of geographical concentrations of firms and people. It is a process that encompasses all the facets (political, economic or even cultural) of the states that are within the region. Apart from established and countries in the developed world, most regional cooperation are still at their infancy stage. Agreements are formulated between countries for various purposes of trade and other social interactions. Factors that act as barriers to trade between the member states are abolished and a free trade agreement is reached amongst them (Fratianni 206).
Benefits that the member states may accrue include receiving foreign aid from other member countries. Regional integration does not only benefit the member countries but also benefit other countries. With the world becoming one small village it is becoming more and more transparent that when one country benefits, there are others who also benefit. An example of this is when the economy of one country flourishes, it tends to import more from another and hence leading to growth of GDP in both countries.
Some of these cooperations have been at this stage due to the numerous challenges that continue to plague them. The phenomenon integration of economic markets has been forced and brought about by competition of the once isolated markets. All regional International bodies seek to bring about the strengthening of integration of trade within the region. The body should facilitate an environment whereby the private sector is developed (Fratianni 206). Propagation of Infrastructure and other related programs are part of the responsibility of any integration body as this leads to the sector wide development.
It is also the responsibility of the body to ensure that peace and harmony within member states is upheld. The emergence and rise of newer forms of competitions has culminated to Governments that were once enemies to unite as policymakers grapple with challenges that may hinder the successful operations of economic markets. This has necessitated trade reforms and coming up with an open door policy by all countries that are included in the union. Regional economic integration has led to the acceleration of central economies to become market economies. On evaluating these regional markets, it is evident that trade restrictions among the countries have over time been removed and trade relations among the countries have also been strengthened.
There are regional integration agencies that are currently active but the most successful has been the EU. The European Union has been able to create an environment that fosters a single market. The same environment has also led to the free flow of capital both human and monetary capital. Countries within the EU are able to benefit from foreign investment inflows that are part of EU policy.
This has led to the balancing out of companies and markets and thus introduced a level playing field for firms to grow. In the past, it was more difficult to penetrate new markets without the construction of distribution networks. These days competition among member states is based more on the relative advantages that they may offer to companies. The European Union has been able to create policies that have led to the sustenance of markets that are both integrated and competitive at the same time.
The same policies have encouraged businesses and companies to come up with strategies that have led to healthy competition among firms. The EU has promoted member countries through the introduction of incentives and funds that promote research and development (Pinder 298).