What are economic integration levels?

Economic integration levels refer to the classification of trade agreements that countries enter into to promote trade and economic cooperation. These levels typically range from low to high degrees of integration, illustrating how closely economies are connected. For instance, at the most basic level, there may be a free trade area where tariffs between member countries are reduced or eliminated, while at a higher level, there might be a customs union where not only tariffs are eliminated but a common external tariff is established.

Understanding these levels is crucial for businesses and governments as they navigate the complexities of international trade. By recognizing the type of integration, stakeholders can better gauge the benefits and limitations imposed by specific trade agreements, allowing for more informed decision-making.