Regional integration

Regional integration

Regional integration

Regional integration is the process of overcoming barriers that divide neighbouring countries, by common accord, and of jointly managing shared resources and assets. Essentially, it is a process by which groups of countries liberalise trade, creating a common market for goods, people, capital and services. The European Union advocates regional integration as an effective means of achieving prosperity, peace and security.

The economic benefits of integration are well documented. It can create larger markets and new trading opportunities, while increasing competition and lowering prices for consumers. There is also evidence that successful integration generates greater levels of domestic and foreign investment, along with improved security and stability.
 
The European Commission advocates regional integration as an effective means of achieving prosperity, security and peace:
  • Regional integration makes it easier to solve existing conflicts, prevent new ones and enhance administration, governance and economic development.
  • It creates larger and stronger markets that integrate more smoothly into the world market.
  • It also enables the countries involved to tackle common challenges – such as the HIV/AIDS pandemic, migration or climate change – jointly and therefore more effectively. As such, it can make a substantial contribution in pursuit of the eight Millennium Development Goals set by the international community in 2000 to meet the needs of the world's poorest by 2015.
The European Commission’s faith in the power of integration is rooted in the success of the European Union since it was created more than half a century ago. Regional integration has been a powerful process for Europe, and it can also benefit countries in developing parts of the world.
 
Essentially, regional integration is a process by which groups of countries liberalise trade by developing free trade areas or customs unions. This creates a common market for goods, services, human resources, and capital. More advanced models, such as the EU, have gone further by introducing a common currency, harmonising various aspects of national legislation and developing common policies.
 
The EU has placed regional integration alongside trade as one of its priorities for development cooperation. The European Commission’s work in this area is implemented through regional programming documents, drafted in consultation with the relevant regional organisations.
 
This emphasis is reflected in:
The aim is to help developing regions implement their own regional integration agendas. The Commission follows this approach, in particular, with partner countries in the six ACP regions it targets. It also supports regional integration processes in Asia and Latin America. Assistance is provided for capacity building to strengthen regional systems and deploy various trade-related measures.
 
More specifically, EU help is needed with five challenges:
  • Enhancing regional/national ownership and institutional capacities
  • Overcoming the fragmentation of regional markets
  • Stimulating economic diversification
  • Boosting infrastructure interconnections, notably by linking national networks
  • Managing common challenges where a regional approach adds particular value, which requires effective regional policies on sustainable development.
In the long term, Commission support aims to increase intraregional trade and reinforce the integration process. Assistance can impact on a wide range of activities and issues at regional level, such as:
  • Strengthening regional macroeconomic stability and convergence, where capacity-building programmes are helping to develop macroeconomic surveillance systems and monitor convergence targets. They are also being used to harmonise national statistics, fiscal systems and public finance legislation.
  • Establishing free trade areas and customs unions. These structures help regions reap the benefit of economies of scale and push the conduct of trade to the top of the agenda. Activities include simplifying and harmonising national customs systems and procedures, finding ways to reduce customs clearance times, and making it easier to transfer goods, for example through the use of a computerised customs system. The development of customs infrastructures, such as one-stop border posts, can also make it easier to move goods across national borders.
  • Creating synergies and support activities to increase intraregional trade. Encouraging countries to share sanitary and phytosanitary systems, technical standards and quality systems can have a positive impact on regional cooperation. Establishing regional regulatory frameworks and setting up bodies like regional accreditation offices all play a part in boosting trade between countries.
Where regional integration is more advanced, the Commission provides capacity-building support to regional organisations to help them develop a harmonised approach to establishing a common market in a number of areas. Promising areas notably include competition, investment, public procurement, intellectual property rights, monetary cooperation and freedom of movement.
 
The EU strives to integrate its support for regional integration across development priorities and policy areas:
  • Political partnerships, such as the EU-Africa, EU-Caribbean and EU-Pacific strategies, should consistently promote regional development.
  • Funding for development policy should move towards joint programming by the EU, its member countries and other development partners. Regional ‘aid for trade packages’ should be combined with more European Community support for regional integration.
Trade policy should build upon and promote existing regional integration processes. Full Economic Partnership Agreements are being negotiated.

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