Economic Integration and Development Partnerships: Southern Perspectives

Regional integration (RI) is a process by which countries enter into an agreement to upgrade cooperation through common institutions and rules. The objectives of the agreement could range from economic, political and environmental, although typically they take the form of a political economy initiative where commercial interests are the focus for achieving broader socio-political and security objectives, as defined by national governments. Regional integration has been organized either via supranational institutional structures or through intergovernmental decision-making, or a combination of both. The impetus and rationale for regional integration comes from the standard trade theory which states that free trade is superior to all other trade. Therefore, all formal regional integration arrangements reduce barriers (such as tariffs) to trade among member countries. Lately, RI has become very popular all over the world as a way in which countries can overcome small markets, pool resources and benefit from economies of scale in production and trade in the same note, regional integration increases competition in global trade and improves access to foreign technology, investment, and ideas.