An economic union is a type of trade bloc which is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production (capital and labour) and a common external trade policy. When an economic union involves unifying currency it becomes an economic and monetary union.
Purposes for establishing an economic union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries.
Economic union is established through trade pact.
Note: Every economic and monetary union includes an economic union.
Additionally the autonomous and dependent territories, such as some of the EU member state special territories, are sometimes treated as separate customs territory from their mainland state or have varying arrangements of formal or de facto customs union, common market and currency union (or combinations thereof) with the mainland and in regards to third countries through the trade pacts signed by the mainland state.
The Belgium–Luxembourg Economic Union (Dutch: Belgisch-Luxemburgse Economische Unie, French: Union économique belgo-luxembourgeoise, Luxembourgish: Belsch-Lëtzebuerger Wirtschaftsunioun), abbreviated to BLEU or UEBL, is an economic union between Belgium and Luxembourg, two countries in the Benelux Union.
BLEU was created by a treaty, signed on 25 July 1921, despite a referendum against such a proposal, between Belgium and Luxembourg, and came into effect upon ratification by the Luxembourg Chamber of Deputies on 22 December 1922. Under the terms of the treaty, the economic frontier was lifted and the Belgian franc and Luxembourg franc were set at a fixed parity (though revised in 1935 and 1944) establishing a monetary union, which existed up until the introduction of the Euro. The original treaty lasted for fifty years, expiring in 1972; this was extended for ten years in 1982 and again in 1992. On 18 December 2002, the two countries and the three regions of Belgium signed a new convention.
It has been seen as the forerunner of Benelux Union, which was established as the Benelux Customs Union in 1944 by the London Customs Convention and also includes the Netherlands. While many aims of the BLEU have been subsumed by the Benelux Union, and later the European Union, it still has some relevance in being able to decide more precise measures than these organisations. International trade statistics were available for BLEU only as a combined entity until 1999, when European Community rules required split information.Benelux
The Benelux Union (Dutch: Benelux Unie; French: Union Benelux; Luxembourgish: Benelux-Unioun) is a politico-economic union of three neighbouring states in western Europe: Belgium, Netherlands and Luxembourg.The name Benelux is formed from joining the first two or three letters of each country's name – Belgium Netherlands Luxembourg – and was first used to name the customs agreement that initiated the union (signed in 1944). It is now used more generally to refer to the geographic, economic and cultural grouping of the three countries.
In 1951, these countries joined West Germany, France, and Italy to form the European Coal and Steel Community, a predecessor of the European Economic Community (EEC) and today's European Union (EU).
The main institutions of the Union are the Committee of Ministers, the Benelux Parliament, the Council of the Union and the Secretariat-General, while the Benelux Office for Intellectual Property and the Benelux Court of Justice cover the same territory but are not part of the Union.
The Benelux General Secretariat is located in Brussels. It is the central administrative pillar of the Benelux Union. It handles the secretariat of the Committee of Ministers, the Council of Economic Union and the various committees and working parties.Commonwealth of Independent States
The Commonwealth of Independent States (CIS;), is a regional intergovernmental organization of 10 post-Soviet republics in Eurasia formed following the dissolution of the Soviet Union. It has an area of 20,368,759 km² (8,097,484 sq mi) and has an estimated population of 239,796,010. The CIS encourages cooperation in economical, political and military affairs and has certain powers to coordinate trade, finance, lawmaking and security. It has also promoted cooperation on cross-border crime prevention.
The CIS has its origins in the Soviet Union (USSR), which replaced the old Russian Empire in 1917 when it was established by the 1922 Treaty and Declaration of the Creation of the USSR by the Russian SFSR, Byelorussian SSR and Ukrainian SSR. When the USSR began to fall in 1991, the founding republics signed the Belavezha Accords on 8 December 1991, declaring the Soviet Union would cease to exist and proclaimed the CIS in its place. A few days later the Alma-Ata Protocol was signed, which declared that Soviet Union was dissolved and that the Russian Federation was to be its successor state. The Baltic states (Estonia, Latvia and Lithuania), which regard their membership in the Soviet Union as an illegal occupation, chose not to participate. Georgia withdrew its membership in 2008. Ukraine, which participated as an associate member, ended its participation in CIS statutory bodies on 19 May 2018.Eight of the nine CIS member states participate in the CIS Free Trade Area. Three organizations are under the overview of the CIS, namely the Collective Security Treaty Organization, the Eurasian Economic Union (alongside subdivisions, the Eurasian Customs Union and the Eurasian Economic Space, which comprises territory inhabited by over 180 million people); and the Union State. While the first and the second are military and economic alliances, the third aims to reach a supranational union of Russia and Belarus with a common government, flag, currency and so on.Economic Community of Central African States
The Economic Community of Central African States (ECCAS; French: Communauté Économique des États de l'Afrique Centrale, CEEAC; Spanish: Comunidad Económica de los Estados de África Central, CEEAC; Portuguese: Comunidade Económica dos Estados da África Central, CEEAC) is an Economic Community of the African Union for promotion of regional economic co-operation in Central Africa. It "aims to achieve collective autonomy, raise the standard of living of its populations and maintain economic stability through harmonious cooperation".Economic Community of West African States
The Economic Community of West African States, also known as ECOWAS, is a regional economic union of fifteen countries located in West Africa. Collectively, these countries comprise an area of 5,114,162 km2 (1,974,589 sq mi), and in 2015 had an estimated population of over 349 million.
The union was established on 28 May 1975, with the signing of the Treaty of Lagos, with its stated mission to promote economic integration across the region. A revised version of the treaty was agreed and signed on 24 July 1993 in Cotonou. Considered one of the pillar regional blocs of the continent-wide African Economic Community (AEC), the states goal of ECOWAS is to achieved "collective self-sufficiency" for its member states by creating a single large trade bloc by building a full economic and trading union.
ECOWAS also serves as a peacekeeping force in the region, with member states occasionally sending joint military forces to intervene in the bloc's member countries at times of political instability and unrest. In recent years these included interventions in Ivory Coast in 2003, Liberia in 2003, Guinea-Bissau in 2012, Mali in 2013, and Gambia in 2017.ECOWAS includes two sub-regional blocs:
The West African Economic and Monetary Union (also known by its French-language acronym UEMOA) is an organization of eight, mainly French-speaking, states within the ECOWAS which share a customs union and currency union. Established in 1994 and intended to counterbalance the dominance of English-speaking economies in the bloc (such as Nigeria and Ghana), members of UEMOA are mostly former territories of French West Africa. The currency they all use is the CFA franc, which is pegged to the euro.
The West African Monetary Zone (WAMZ), established in 2000, comprises six mainly English-speaking countries within ECOWAS which plan to work towards adopting their own common currency, the eco.ECOWAS operates in three co-official languages—French, English, and Portuguese, and consists of two institutions to implement policies: the ECOWAS Commission and the ECOWAS Bank for Investment and Development (EBID), formerly known as the Fund for Cooperation until it was renamed in 2001. A few members of the organization have come and gone over the years. In 1976 Cape Verde joined ECOWAS, and in December 2000 Mauritania withdrew, having announced its intention to do so in December 1999.
In 2011, ECOWAS adopted its development blueprint for the next decade, Vision 2020, and, to accompany it, a Policy on Science and Technology (ECOPOST).Economic Union Party
The Economic Union Party (EUP, formally the Party for Economic Union with the United States) was a political party formed in the Dominion of Newfoundland on 20 March 1948, during the first referendum campaign on the future of the country. The British-appointed Commission of Government had administered the country since the financial collapse of 1934. The alternatives were "responsible government" (restoration of Newfoundland self-rule), or "Confederation" (joining the Dominion of Canada).
The EUP was formed by a split in the Responsible Government League (RGL), which advocated "responsible government". A group of younger anti-Confederation delegates to the Newfoundland National Convention quit the RGL, because they thought the RGL was disorganized and had failed to present a positive alternative to Confederation. Thus it seemed that the RGL was doomed to lose the referendum to Joey Smallwood's Confederate Association, advocates of Confederation.
The EUP was led by St. John's businessman Chesley Crosbie and "co-founded" by Geoff Stirling, publisher of The Sunday Herald.
The EUP believed that Newfoundland's voters had to be persuaded that "responsible government" could be made viable again. They proposed to revive the Newfoundland economy through free trade and a customs union with the United States. They also believed that the promise of economic union would give Newfoundlanders a positive reason to reject Confederation.
There was no "economic union option" on the referendum ballot. The EUP therefore supported "responsible government", with the expectation that the independent Newfoundland government would negotiate the union with the United States. The party's support was concentrated on the Avalon Peninsula. Its economic ideas, though popular with the St. John's business community, failed to generate interest in the general population.
Smallwood's forces attacked the EUP as "republican" (anti-monarchist), disloyal and anti-British. The split of the anti-Confederation forces into two organizations caused problems: tension between the EUP and the RGL, and wasteful division of resources. Conversely, the Confederate Association was well-funded and well-organized across the island.In the first referendum, held on 3 June 1948, "responsible government" won the most votes (44.6%). 41.1% voted for Confederation; 14.3% voted for continuing the Commission of Government. Since there was no majority, the results were inconclusive. A second referendum was held on 22 July, with only Confederation and Responsible Government on the ballot.
The Economic Union Party decided to unite its efforts with the Responsible Government League for the second referendum, but morale was poor and the campaign was disorganized, compared to Smallwood's well-run machine.Confederation won the second referendum with 52.3% of the votes,
and the EUP disbanded. Crosbie died in 1962 and Stirling remained active, through his media holdings, in Canadian discourse until shortly before his death in 2013.Economic and monetary union
An economic and monetary union is a type of trade bloc which is composed of an economic union (common market and customs union) with a monetary union. It is to be distinguished from a mere monetary union (e.g. the Latin Monetary Union in the 19th century), which does not involve a common market. This is the sixth stage of economic integration. EMU is established through a currency-related trade pact. An intermediate step between pure EMU and a complete economic integration is the fiscal union.Economic integration
Economic integration is the unification of economic policies between different states through the partial or full abolition of tariff and non-tariff restrictions on trade taking place among them prior to their integration. This is meant in turn to lead to lower prices for distributors and consumers with the goal of increasing the level of welfare, while leading to an increase of economic productivity of the states.
The trade stimulation effects intended by means of economic integration are part of the contemporary economic Theory of the Second Best: where, in theory, the best option is free trade, with free competition and no trade barriers whatsoever. Free trade is treated as an idealistic option, and although realized within certain developed states, economic integration has been thought of as the "second best" option for global trade where barriers to full free trade exist.Eurasian Customs Union
The Eurasian Customs Union (EACU) is a customs union which consists of all the Member states of the Eurasian Economic Union.
The customs union is a principal task of the Eurasian Economic Community, established in 2000, and now succeeded by the Eurasian Economic Union. No customs are levied on goods travelling within the customs union and – unlike a free-trade area – members of the customs union impose a common external tariff on all goods entering the union. One of the consequences of the customs union is that the Eurasian Union negotiates as a single entity in international trade deals such as the World Trade Organisation, instead of individual member states negotiating for themselves.
It came into existence on 1 January 2010. Its founding states were Belarus, Kazakhstan and Russia. On 2 January 2015 it was enlarged to include Armenia. Kyrgyzstan acceded to the EEU on 6 August 2015. The original treaty establishing the Customs Union was terminated by the agreement establishing the Eurasian Economic Union, signed in 2014, which incorporated the Customs Union into the EEU's legal framework.
The member states continued with economic integration and removed all customs borders between each other after July 2011. On 19 November 2011, the member states put together a joint commission on fostering closer economic ties, planning to create a Eurasian Economic Union by 2015. On 1 January 2012, the three states formed a single economic space to promote further economic integration. The Eurasian Economic Commission is the regulatory agency for the Customs Union and the Eurasian Economic Community.The creation of the Eurasian Customs Union was guaranteed by 3 different treaties signed in 1995, 1999 and 2007. The first treaty in 1995 guaranteeing its creation, the second in 1999 guaranteeing its formation, and the third in 2007 announced the establishment of a common customs territory and the formation of the customs union.Eurasian Economic Community
The Eurasian Economic Community (EAEC or EurAsEC) was a regional organisation between 2000 and 2014 which aimed for the economic integration of its member states.
The organisation originated from the Commonwealth of Independent States (CIS) on 29 March 1996, with the treaty on the establishment of the Eurasian Economic Community signed on 10 October 2000 in Kazakhstan's capital Astana by Presidents Alexander Lukashenko of Belarus, Nursultan Nazarbayev of Kazakhstan, Askar Akayev of Kyrgyzstan, Vladimir Putin of Russia, and Emomali Rahmon of Tajikistan. Uzbekistan joined the community on 7 October 2005, however later withdrew on 16 October 2008.
During the 14 years, the EAEC implemented a number of economic policies to unify the community. The Customs Union of Belarus, Kazakhstan, and Russia was formed on 1 January 2010, and later renamed the Eurasian Customs Union. The four freedoms of movement modelled after the European Union (goods, capital, services, and people) were fully implemented by 25 January 2012, with the formation of the Eurasian Economic Space.On 10 October 2014, an agreement on the termination of the Eurasian Economic Community was signed in Minsk after a session of the Interstate Council of the EAEC. The Eurasian Economic Community was terminated from 1 January 2015 in connection with the launch of the Eurasian Economic Union. While the Eurasian Economic Union effectively replaces the community, membership negotiations with Tajikistan are still ongoing. All other EAEC members have joined the new union.Eurasian Economic Union
The Eurasian Economic Union (EAEU, or EEU), also known as the Eurasian Union (EAU), or simply Eurasia, is a political and economic union of states located in central and northern Asia and Eastern Europe. The treaty aiming for the establishment of the EAEU was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan and Russia, and came into force on 1 January 2015. Treaties aiming for Armenia's and Kyrgyzstan's accession to the Eurasian Economic Union were signed on 9 October and 23 December 2014, respectively. Armenia's accession treaty came into force on 2 January 2015. Kyrgyzstan's accession treaty came into effect on 6 August 2015. It participated in the EAEU from the day of its establishment as an acceding state.The Eurasian Economic Union has an integrated single market of 183 million people and a gross domestic product of over 4 trillion U.S. dollars (PPP). The EAEU introduces the free movement of goods, capital, services and people and provides for common policies in the macroeconomic sphere, transport, industry and agriculture, energy, foreign trade and investment, customs, technical regulation, competition and antitrust regulation. Provisions for a single currency and greater integration are envisioned in future. The union operates through supranational and intergovernmental institutions. The Supreme Eurasian Economic Council is the "Supreme Body" of the Union, consisting of the Heads of the Member States. The second level of intergovernmental institutions is represented by the Eurasian Intergovernmental Council (consisting of the Prime Ministers of member states). The day-to-day work of the EAEU is done through the Eurasian Economic Commission (the executive body), which is a supranational body similar to European Commission. There is also a judicial body – the Court of the EAEU.European Union
The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. It has an area of 4,475,757 km2 (1,728,099 sq mi) and an estimated population of about 513 million. The EU has developed an internal single market through a standardised system of laws that apply in all member states in those matters, and only those matters, where members have agreed to act as one. EU policies aim to ensure the free movement of people, goods, services and capital within the internal market, enact legislation in justice and home affairs and maintain common policies on trade, agriculture, fisheries and regional development. For travel within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002 and is composed of 19 EU member states which use the euro currency.
The EU and European citizenship were established when the Maastricht Treaty came into force in 1993. The EU traces its origins to the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), established, respectively, by the 1951 Treaty of Paris and 1957 Treaty of Rome. The original members of what came to be known as the European Communities were the Inner Six: Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. The Communities and its successors have grown in size by the accession of new member states and in power by the addition of policy areas to its remit. The latest major amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009. While no member state has left the EU or its antecedent organisations, the United Kingdom signified the intention to leave after a membership referendum in June 2016 and is negotiating its withdrawal on 29 March 2019.
Covering 7.3% of the world population, the EU in 2017 generated a nominal gross domestic product (GDP) of 19.670 trillion US dollars, constituting approximately 24.6% of global nominal GDP. Additionally, all 28 EU countries have a very high Human Development Index, according to the United Nations Development Programme. In 2012, the EU was awarded the Nobel Peace Prize. Through the Common Foreign and Security Policy, the EU has developed a role in external relations and defence. The union maintains permanent diplomatic missions throughout the world and represents itself at the United Nations, the World Trade Organization, the G7 and the G20. Because of its global influence, the European Union has been described as an emerging superpower.Foreign relations of Luxembourg
Grand Duchy of Luxembourg has long been a prominent supporter of European political and economic integration. In efforts foreshadowing European integration, Luxembourg and Belgium in 1921 formed the Belgium-Luxembourg Economic Union (BLEU) to create an inter-exchangeable currency and a common customs regime. Luxembourg is a member of the Benelux Economic Union and was one of the founding members of the United Nations and the European Economic Community (now the European Union). It also participates in the Schengen Group (named after the Luxembourg village where the agreements were signed), whose goal is the free movement of citizens among member states. At the same time, the majority of Luxembourgers have consistently believed that European unity makes sense only in the context of a dynamic transatlantic relationship, and thus have traditionally pursued a pro-NATO, pro-US foreign policy.
Luxembourg is the site of the European Court of Justice, the European Court of Auditors, the Statistical Office of the European Communities (Eurostat) and other vital EU organs. The Secretariat of the European Parliament is located in Luxembourg, but the Parliament usually meets in nearby Strasbourg.Organisation of Eastern Caribbean States
The Organisation of Eastern Caribbean States (OECS; French: Organisation des États de la Caraïbe orientale, (OECO)) is an inter-governmental organisation dedicated to economic harmonisation and integration, protection of human and legal rights, and the encouragement of good governance between countries and dependencies in the Lesser Antilles in the Eastern Caribbean. It also performs the role of spreading responsibility and liability in the event of natural disaster.
The main organ of the OECS is the Commission, which is based in Castries, the capital city of Saint Lucia.Politics of Europe
The politics of Europe deals with the continually evolving politics within the continent of Europe. It is a topic far more detailed than other continents due to a number of factors including the long history of nation states in the region as well as the modern day trend towards increased political unity amongst the European states.
The current politics of Europe can be traced back to historical events within the continent. Likewise geography, economy and culture have contributed to the current political make-up of Europe.
Modern European politics is dominated by the European Union, since the fall of the Iron Curtain and the collapse of the Eastern Bloc of Communist states. After the end of the Cold War, the EU expanded eastward to include the former Communist countries. As of 2017, the EU has 28 member states.
However there are a number of other international organisations made up predominantly of European nations, or explicitly claiming a European origin, including the 47-nation Council of Europe - the first post-war European organisation, regarded as a fore-runner to the European Union - and the 57-nation Organisation for Security and Co-operation in Europe (OSCE).Regional organization
Regional organizations (ROs) are, in a sense, international organizations (IOs), as they incorporate international membership and encompass geopolitical entities that operationally transcend a single nation state. However, their membership is characterized by boundaries and demarcations characteristic to a defined and unique geography, such as continents, or geopolitics, such as economic blocs. They have been established to foster cooperation and political and economic integration or dialogue among states or entities within a restrictive geographical or geopolitical boundary. They both reflect common patterns of development and history that have been fostered since the end of World War II as well as the fragmentation inherent in globalization, which is why their institutional characteristics vary from loose cooperation to formal regional integration. Most ROs tend to work alongside well-established multilateral organizations such as the United Nations. While in many instances a regional organization is simply referred to as an international organization, in many others it makes sense to use the term regional organization to stress the more limited scope of a particular membership.
Examples of ROs include, a.o., the African Union (AU), Association of Southeast Asian Nations (ASEAN), Arab League (AL), Caribbean Community (CARICOM), Council of Europe (CoE), Eurasian Economic Union (EEU), European Union (EU), South Asian Association for Regional Cooperation (SAARC), Asian-African Legal Consultative Organization (AALCO), Union for the Mediterranean (UfM), Union of South American Nations (USAN).South Asian Free Trade Area
The South Asian Free Trade Area (SAFTA) is an agreement reached on January 6, 2004, at the 12th SAARC summit in Islamabad, Pakistan. It created a free trade area of 1.6 billion people in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka (as of 2018, the combined population is 2.08 billion people, about 27% of the world's population of 7686691000 ). The seven foreign ministers of the region signed a framework agreement on SAFTA to reduce customs duties of all traded goods to zero by the year 2016. The SAFTA agreement came into force on January 1, 2006, and is operational following the ratification of the agreement by the seven governments. SAFTA requires the developing countries in South Asia (India, Pakistan and Sri Lanka) to bring their duties down to 20 percent in the first phase of the two-year period ending in 2007. In the final five-year phase ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts. The least developed nations in South Asia (Nepal, Bhutan, Bangladesh, Afghanistan and Maldives) have an additional three years to reduce tariffs to zero. India and Pakistan ratified the treaty in 2009, whereas Afghanistan as the 8th memberstate of the SAARC ratified the SAFTA protocol on 4 May 2011.Trade bloc
A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states.Trade creation
Trade creation is an economic term related to international economics in which trade flows are redirected due to the formation of a free trade area or a customs union. The issue was firstly brought into discussion by Jacob Viner (1950), together with the trade diversion effect.
In the former case after the formation of economic union, the cost of the goods considered is decreased, leading to an increase of efficiency of economic integration. Hence, trade creation's essence is in elimination of customs tariffs on inner border of unifying states (usually already trading with each other), causing further decrease of price of the goods, while there may be a case of new trade flow creation of the goods between the states decided to economically integrate.
The opposite takes place in case of trade diversion, when the trade flow is diverted from actually cost-efficient partner state to less efficient one – but which became a member of economic union and made its goods cheaper within a union, but higher compared to the rest of the world.
In practice, both trade creation and diversion effects take place due to formation of economic union. Efficiency of economic integration of specific union right now is assessed as a final outcome between trade creation and diversion effects: it is cost-effective in case of prevailing of the trade creation effects, and vice versa.