Economic Integration Law Trends - Essay Example

They represent free trade area while resulting in trade creation by shifting the production of some items from less efficient member countries to more efficient member countries. Regional economic integration encourages countries in a geographic region to reduce or remove tariff and non-tariff barriers which allow free flow of goods and services among them. In the end, the system promotes global business (OPPapers.com, 2011).

In recent years, international trade has witnessed an emergence of two parallel trends, the first one is the rise of regionalism, and the second one is legalism in the enforcement of trade agreements. In the case of regionalism, there is a host of new integration initiatives drawn along the geographical lines.

The two trends have succeeded to garner scholarly attention and spark comparative analysis of regional versus multilateral arrangements. And, at the same time, they lead debate regarding the political dynamics of judicialization within individual facts. Trade facts at the regional level exhibit considerable variation in governance structures which is an interesting factor. Moreover, the question of institutional design has proven contentious in recent trade negotiations which underscore their political salience. The creation of supranational institutions in regional trade agreements has direct implications for the academic debates in related to globalization, sovereignty, and interdependence (Smith, J., 2003).

Post-Second World War witnessed a prominence of multilateralism and regionalism as more and more countries joined the process of economic integration. We can see the trend during the period 1940-1990. In the process of economic integration, countries that have entered into the free trade area have introduced several measures for the easy flow of goods and services between the member countries.

As a result, the role played by tariffs in international trade has declined. Generally, countries used trade barriers such as customs, quotas, taxes, duties, anti-dumping measures, health, environmental, and safety certification requirements, countervailing duties, constitutional laws, and licenses for the restriction of trade. But, when countries entered into economic integration, these restrictions have been liberalized for the facilitation of free trade movement.

Agreements at the regional level which are known as Regional Trade Agreements (RTAs) generally restricted to a particular geographical location and are becoming a defining feature of the modern economy. These are the free trade agreements among the countries of a particular geographical location. Following the success of the European Union, which shows that RTAs can build prosperity and peace, countries in other geographical regions came closer to forming similar agreements at the regional level.

As a result, more than 300 regional trading arrangements were registered under World Trade Organisation, and the majority of the countries belonging to the European Union, America, Austria, Africa, and the Asian continent joined regional grouping of one sort or the other. Compare to other regions, countries of the Asian continent were the recent entrants in this field, but they rapidly caught up in the race. On the other hand, RTAs in the African continent were drubbed as ineffective in promoting trade and foreign direct investment in the region which is mainly because of poor infrastructure and high trading costs (Smith, J., 2003).

Closer economic integration at the regional level benefits the countries as it improves the efficiency of trade and is likely to induce greater investment among them. As a result, countries may experience economic growth. Integration effort in the field of economics is credible and would not be reversed. Because, if credibility is lacking, there would be uncertainty among investors, and their behavior is unlikely to be influenced.