economic union and its types

7/23/2019 economic union and its types

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M.com Part-1 ( SEM-1 ) Roll No. 27

MASTER OF COMMERCE

ADVANCED ACCOUNTANCYSemester: 1

Academic Year: 2015-16

S!mitted i" #artia$ F$%i$me"t &% t'e

Re(ireme"t %&r t'e A)ard &% t'e De*ree &%

MASTER OF COMMERCE

SU+M,TTED +Y

V,#U .ES/AN, RO NO234

Mc&m Ad Acc&"ta"c4

SEMESTER-1

ACADEM,C YEAR 2015-16

ECONOM,C OF 7O+A TRADE AND

F,NANCE

SU+M,TTED T/ROU7/

#r&% Adars' Sri

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TY#ES OF

ECONOM,CUN,ON

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DECARAT,ON

I hereby declare that project entitled TY#ES OF ECONOM,C UN,ON8.S!bmitted "or the M.#$M (%d&anced %cco!ntancy) 'eree i my oriinal *or+and the project ha not "ormed the bai "or the a*ard o" any 'eree,%ociatehip, ello*hip or any other imilar title.

I "!rther declare that the in"ormation ha been tapped "rom the primary andecondary o!rce o" in"ormation *hich ha&e been properly accorded.

#$ace: M!mbai ip!l /eh*ani

Date: MCOM STUDENT4

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AC.NOED7EMENT

I *ih to than+ Pro"eor %'%RS0 SRI "or hi enco!raement and !pportthro!ho!t the project it i d!e to hi bet e""ort and contin!o! !idance and thatI *a able to prepare thi project.

I *o!ld li+e to than+ coordinator pro"eor S%N$S0 30%3 "or hi contant!pport in the proce o" ma+in the project.

I *o!ld li+e to than+ o!r Principal MR..%S0$/ 4%'I% "or i&in me theopport!nity to *or+ on thi project.

I *o!ld alo li+e to than+ the ni&erity o" M!mbai to i&e me thi opport!nity toe5plore the &al!able in"ormation related to thi project.

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CERT,F,CATE OF OR,7,NA,TY

hi i to certi"y that the project titled TY#ES OF ECONOM,C UN,ON8. I an oriinal *or+o" the t!dent and i bein !bmitted in partial "!l"illment "or the a*ard o" the Mater6 'ereein %d&anced %cco!ntancy (M.#$M) o" MM%I NIERSI8.

hi report ha not been !bmitted earlier either to the !ni&erity or to any otherni&erity9Intit!tion "or the "!l"illment o" the re:!irement o" a co!re o" t!dy.

'r. %S0$/ 4%'I% Pro". S%N$S0 30%0Sinat!re o" Principal Sinat!re o" #oordinator'ate; 'ate;Place; MM%I Place; MM%I

Sinat!re o" E5ternal E5aminer #$


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E>ECUT,VE SUMMARY

he object o" thi project i to analyBe the e&ol!tion o" economic !nion "rom it

inpection latet incarnation in the "orm o" E!raian !nion compriin the comple5

array o" areement "ormin it !btance and mandate.

he t!dy "oc!e on the ade:!acy or the inade:!acy o" the ytem a it e&ol&edand "!nctioned in an en&ironment o" chanin international economic and political

reality.

he t!dy alo attempt to rapple *ith the more di""ic!lt :!etion o" loo+in at

the "!t!re propect o" the ytem, the train that it *ill need to "ace and the

!be:!ent chane that are called "or in it approach, content and "!nctionin,

ta+in into acco!nt the "!t!re o&ernance need o" the *orld economy.

hi project conit o" three main part.

Introd!ction o" economic !nion

Second part incl!de type o" economic !nion

hird and the lat part incl!de


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,NTRODUCT,ON

ECONOM,C UN,ON

114/AT ,S ECONOM,C UN,ON ?

%n economic !nion i an areement bet*een t*o or more o&erein nation to coordinate tradepolicie. Proreion to a "ormal economic !nion typically in&ol&e e&eral tae o" increaincooperation bet*een nation. Member tate in thee &ario! tae commonly hare landborder, tho!h there are many e5ception to thi. Economic !nion increae the e""iciency o"trade by eliminatin trade barrier and cooperatin on monetary policy.

he "irt tae in thi proce in&ol&e etablihin "ree tradeareement (%). % in&ol&eeliminatin import tari"", or ta5e, bet*een member tate to enco!rae internal trade. Prod!ctoriinatin o!tide o" the "ree trade Bone m!t be identi"ied a !ch, beca!e each member tatemay ha&e di""erent tari"" policie "or "orein ood. 4itho!t thi identi"ication proce, "oreinood *ill typically enter the "ree trade Bone thro!h the co!ntry *ith the lo*et import tari"".$ther than areein to identi"y thee "orein prod!ct, % place "e* retriction on theeconomic a""air o" member tate.

124O+@ECT,VES OF ECONOM,C UN,ON :-

he nion6 objecti&e can be read in the


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he E!ropean nion alo etablih a et o" &al!e in %rticle 2 E. he E #o!rt can ta+e&al!e and aim into acco!nt *hen it decide on cae la*.

he "irt and mot important E objecti&e *a the etablihment o" a common mar+et.S!be:!ent treatie incl!ded the aim o" etablihin; an Economic and Monetary nion a

#ommon orein and Sec!rity Policy and, an area o" F!tice and 0ome %""air.

1G year in order to achie&e !ch monetary !nion, brinin E!rope to both politicaltrain at time b!t alo a decade o" ro*th and !cce. Somethin that tarted a a SinleMar+et, *hich led to an !neen le&el o" economic cooperation in it econd tae then "ollo*edby "!ll inle c!rrency implementation ha been een by many, incl!din the "ormer ritih#hancellor o" the E5che:!er and Prime Miniter, 3ordon ro*n, a E!rope6 reatet politicaland economic achie&ement. EM *o!ld mean the E!ropean #omm!nity (E) *o!ld bereconied a a lobal actor in the "inancial mar+et b!t the inle c!rrency *o!ld ha&e an

international impact a an anchor "or e5chane rate tability in a 21t cent!ry lobal mar+etdeperate "or ro*th, employment and lo* le&el o" in"lation.

he Economic bene"it o" EM are plenti"!l, and de"initely o!t*eih the challene in n!mber.0o*e&er, the ri+ "actor o" EM on a eneral cale i *hat *e6re tryin to ae and the "irtrele&ant bene"it o" EM *o!ld be it optimitic b!t alo reponible con&erence criteria "or "!llEM memberhip. hi i een by many a ettin a "antatic e5ample o" monetary dicipline*ith penaltie o" !p to G.?H o" 3'P a&ailable to the #ommiion and the #entral an+ "or !eaaint &iolatin tate. 4hilt thi con&erence criteria anchor it leitimacy on the Interity o"

the 3erman 'e!tchemar+ a a pre e!ro c!rrency, it only bean a a trict !ideline, it i onlyince the crii o" 2GG@ that a re&ied ro*th tability pact i bein propoed that ma+e theecriterion bindin. nder thee r!le, o&ernment debt cannot e5ceed JGH o" 3'P, and ao&ernment6 c!rrent acco!nt de"icit cannot e5ceed =H in any "ical year. hi i een areponible b!det economic b!t alo &ery riid in it implementation and plannin. %&eraenominal Interet paid cannot e5ceed 2H abo&e the a&erae o" the top = "inancially per"ormintate thi indicator i alo !ed "or Price tability, *here in"lation i limited to 1.?H abo&e the

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top =6 a&erae. hee r!le, et do*n and a!dited by the E# ma+e ood ro!nd "or the econdbene"it o" EM.

he E!ropean #entral an+, a aid be"ore, ha a &ery riid and ordered ytem o" o&ernanceimilar to that o" the !ndeban+. hi mean that *hen it come to it implementation o" the

common interet rate and price tability, e&ery pro&iion o" the 3ro*th Stability Pact i ta+eninto conideration and the ban+ *or+ "or the bene"it o" all 17 member tate. hi model *apro&en to ha&e *or+ed in 3ermany in the AG6 and had imilar re!lt in the E!ro6 "irt decade.!rther !cce incl!de the red!ction in tranaction cot bet*een member tate beca!e o" theame e5chane rate and Rate o" Interet (R$I). hi, i" the / *a to be a member o" EM,may ha&e een a&in o" bet*een K?G-1GG per ann!m "or the a&erae citiBen. hi !cce"!ltheory i mirrored thro!ho!t E!rope, *ith the E!ropean #ommiion !etin thatelimination o" tranaction cot co!ld boot the 3'P o" the co!ntrie concerned by an a&erae o"G.>H by 2G1?, and the cot o" tranportin ood and er&ice bet*een the common mar+et!in the inle c!rrency are ini"icantly lo*er ince 2GG1. hi alo allo* "or a reat deal o"

price tranparency "or lare b!ine "rom both E!rope and aro!nd the *orld b!t in conj!nction*ith red!ced e5chane rate !ncertainty, the increae in orein 'irect In&etment ('I) haallo*ed "or more b!ine loo+in to come and in&et in E!rope. hi not only i&e theE!roBone tate an incenti&e to compete *ith each other "or a healthier dometic pri&ate ectorb!t it alo i&e the incenti&e "or trenthened intra-ME trade, meanin tate, *hiltcompetin *ith each other, alo trade *ith each other m!ch more eaily. In thi repect, EMha remo&ed the poibility o" de&al!ation o" the inle c!rrency, *hich co!ntrie ha&e !ed inthe pat and ha increaed in"lationary pre!re. he E# pride itel" in it policy o" +eepinInteret rate lo* on a&erae. hi *o!ld cater "or an economy capable o" e5pandin rapidly in

the lobal mar+et beca!e o" it "le5ibility thro!h a lo*er R$I.o concl!de, EM ha it ad&antaeo! bene"it and it ometime cripplin challene, and it iimportant to remember that the E!ro, a a re!lt o" the tae o" EM !ch a ERM and the3ro*th Stability Pact, i till in deep teethin mode. It i a yo!n c!rrency and mot o" thei!e concernin EM re&ol&e aro!nd the "le5ibility o" the E# in dealin *ith it!ation !cha the E!roBone #rii. %ny E!roceptic can ar!e that EM may damae national o&ereintyand interity o" a national c!rrency b!t nobody can deny the a*eome ro*th in o&ernment3'P and "orein in&etment paired *ith imprei&e drop in !nemployment "rom 2GGG-2GGA.%nd thi in many repect ha mall in"l!ence !ch a the %then $lympic 3ame in 2GG> and

the 3reen Enery 'irecti&e o" 2GG1 to than+ "or. #o!ntrie in&ol&ed in EM are e&er in&etinin thi m!ltilateral &ent!re, it !ccee co!ld be reater than thoe een in it "irt decade andit prore to date i more than admirable. 0o*e&er, peedy and e""ecti&e re"orm to thetr!ct!re and *or+in o" the E# and the 3S Pact are &ital a"ter thi receion i o&er inorder "or the E!ro to remain *hole, !tainable and *orthy o" international tr!t and praie,beca!e a"ter !ch a t!m!lt!o! period in it hitory, it eem to be o&ercomin the "irt "e*h!rdle and i on the path to a &ery !cce"!l "!t!re in the lobal mar+et.

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1=4ADVANTA7E OF ECONOM,C UN,ON :-

rade #reation; Member co!ntrie ha&e (a) *ider election o" ood and er&ice not pre&io!ly

a&ailable (b) ac:!ire ood and er&ice at a lo*er cot a"ter trade barrier d!e to lo*ered tari""or remo&al o" tari"" (c) enco!rae more trade bet*een member co!ntrie the balance o" moneypend "rom cheaper ood and er&ice, can be !ed to b!y more prod!ct and er&ice

3reater #onen!; nli+e 4$ *ith hih memberhip (1>7 co!ntrie), eaier to ain conen!amont mall memberhip in reional interation

Political #ooperation; % ro!p o" nation can ha&e ini"icantly reater political in"l!ence thaneach nation *o!ld ha&e indi&id!ally. hi interation i an eential tratey to addre thee""ect o" con"lict and political intability that may a""ect the reion. e"!l tool to handle theocial and economic challene aociated *ith lobaliBation

Employment $pport!nitie; % economic interation enco!rae trade liberation and lead tomar+et e5panion, more in&etment into the co!ntry and reater di""!ion o" technoloy, it createmore employment opport!nitie "or people to mo&e "rom one co!ntry to another to "ind job orto earn hiher pay. or e5ample, ind!trie re:!irin motly !n+illed labor tend to hi"tprod!ction to lo* *ae co!ntrie *ithin a reional cooperation

154D,SADVANTA7E OF ECONOM,C UN,ON:-

#reation o" radin loc; It can alo increae trade barrier aaint non-member co!ntrie.

rade 'i&erion; eca!e o" trade barrier, trade i di&erted "rom a non-member co!ntry to amember co!ntry depite the ine""iciency in cot. or e5ample, a co!ntry ha to top tradin *itha lo* cot man!"act!re in a non-member co!ntry and trade *ith a man!"act!rer in a memberco!ntry *hich ha a hiher cot.

National So&ereinty; Re:!ire member co!ntrie to i&e !p ome deree o" control o&er +eypolicie li+e trade, monetary and "ical policie. he hiher the le&el o" interation, the reaterthe deree o" control that need to be i&en !p partic!larly in the cae o" a political !nioneconomic interation *hich re:!ire nation to i&e !p a hih deree o" o&ereinty.

C/A#TER 2:-

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TY#ES OF ECONOM,C UN,ON

214EURO#,AN UN,ON

he E!ropean nion (E) i a politico-economic !nion o" 2@ member tate that are locatedprimarily in E!rope. he E operate thro!h a ytem o" !pranational intit!tion andintero&ernmental-neotiated deciion by the member tate. he intit!tion are; the E!ropean#ommiion, the #o!ncil o" the E!ropean nion, the E!ropean #o!ncil, the #o!rt o" F!tice o"the E!ropean nion, the E!ropean #entral an+, the E!ropean #o!rt o" %!ditor, and theE!ropean Parliament. he E!ropean Parliament i elected e&ery "i&e year by E citiBen.

he E trace it oriin "rom the E!ropean #oal and Steel #omm!nity (E#S#) and theE!ropean Economic #omm!nity (EE#), "ormed by the Inner Si5 co!ntrie in 1A?1 and 1A?@,repecti&ely. In the inter&enin year, the comm!nity and it !cceor ha&e ro*n in iBe bythe acceion o" ne* member tate and in po*er by the addition o" policy area to it remit. heMaatricht reaty etablihed the E!ropean nion !nder it c!rrent name in 1AA= and introd!cedE!ropean citiBenhip. he latet major amendment to the contit!tional bai o" the E, thereaty o" enerated a nominal ro dometic prod!ct (3'P) o" 1@.>A? trillion S dollar,contit!tin appro5imately 2>H o" lobal nominal 3'P and 17H *hen mea!red in term o"p!rchain po*er parity. % o" 2G1> the E ha the laret economy in the *orld, eneratin a3'P bier than any other economic !nion or co!ntry. %dditionally, 2J o!t o" 2@ E co!ntrieha&e a &ery hih 0!man 'e&elopment Inde5, accordin to the N'P. In 2G12, the E *aa*arded the Nobel Peace PriBe.

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224/,STORY:-

%"ter 4orld 4ar II, E!ropean interation *a eyed a an ecape "rom the e5treme nationalimthat had de&atated the continent. he 1A>@ 0a!e #onre *a a pi&otal moment in E!ropean"ederal hitory, a it led to the creation o" the E!ropean Mo&ement International and o" the#ollee o" E!rope, *here E!ropeD "!t!re leader *o!ld li&e and t!dy toether. 1A?2 a* thecreation o" the E!ropean #oal and Steel #omm!nity, *hich *a declared to be La "irt tep in the"ederation o" E!rope.L. he !pporter o" the #omm!nity incl!ded %lcide 'e 3aperi, FeanMonnet, Robert Sch!man, and Pa!l-0enri Spaa+.

In 1A?7, eli!m, rance, Italy,

hro!h the 1AJG, tenion bean to ho*, *ith rance ee+in to limit !pranational po*er.

Ne&erthele, in 1AJ? an areement *a reached and on 1 F!ly 1AJ7 the Merer reaty created ainle et o" intit!tion "or the three comm!nitie, *hich *ere collecti&ely re"erred to a theE!ropean #omm!nitie. Fean Rey preided o&er the "irt mered #ommiion (Rey#ommiion).

In 1A@A, the Iron #!rtain "ell, enablin the !nion to e5pand "!rther (erlin 4all pict!red).

In 1A7=, the #omm!nitie enlared to incl!de 'enmar+ (incl!din 3reenland, *hich later le"tthe #omm!nity in 1A@?, "ollo*in a dip!te o&er "ihin riht), Ireland, and the nited/indom. Nor*ay had neotiated to join at the ame time, b!t Nor*eian &oter rejected

memberhip in a re"erend!m. In 1A7A, the "irt direct, democratic election to the E!ropeanParliament *ere held.

3reece joined in 1A@1 Port!al and Spain in 1A@J. In 1A@?, the Schenen %reement led the*ay to*ard the creation o" open border *itho!t paport control bet*een mot member tateand ome non-member tate. In 1A@J, the E!ropean "la bean to be !ed by the #omm!nityand the Sinle E!ropean %ct *a ined.

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In 1AAG, a"ter the "all o" the Eatern loc, the "ormer Eat 3ermany became part o" the

#omm!nity a part o" a re!nited 3ermany. 4ith "!rther enlarement planned "or "ormercomm!nit tate, #ypr!, and Malta, the #openhaen criteria "or candidate member to join theE *ere areed !pon in F!ne 1AA=.

Maastric't Treat a"d a%terhe E!ropean nion *a "ormally etablihed *hen the Maatricht reaty*hoe mainarchitect *ere 0elm!t /ohl and ranOoi Mitterrandcame into "orce on 1 No&ember 1AA=.he treaty alo a&e the name E!ropean comm!nity to the EE#, e&en i" it *a re"erred a !chbe"ore the treaty. In 1AA?, %!tria, inland, and S*eden joined the E. In 2GG2, e!ro ban+noteand coin replaced national c!rrencie in 12 o" the member tate. Since then, the e!roBone ha

increaed to encompa 1A co!ntrie. In 2GG>, the E a* it biet enlarement to date *hen#ypr!, the #Bech Rep!blic, Etonia, 0!nary,


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'eepenin economic interation by ad&ancin beyond a common mar+et to*ard a SinleMar+et and Economy.

4idenin the memberhip and thereby e5pandin the economic ma o" the #aribbean#omm!nity (e.. S!riname and 0aiti *ere admitted a "!ll member in 1AA? and 2GG2

repecti&ely).

Prorei&e inertion o" the reion into the lobal tradin and economic ytem by trenthenintradin lin+ *ith non-traditional partner.

% prec!ror to #%RI#$M and it #SME *a the #aribbean ree rade %reement, "ormed in1AJ? and diol&ed in 1A7=.

Si"*$e maret a"d ec&"&m

he #SME *ill be implemented thro!h a n!mber o" phae, "irt bein the #%RI#$M Sinle

Mar+et (#SM). he #SM *a initially implemented on Fan!ary 1, 2GGJ *ith the inin o" thedoc!ment "or it implementation by i5 oriinal member tate. 0o*e&er the Re&ied reaty o"#ha!arama etablihin the #SME had been pro&iionally applied by t*el&e member tate o"#%RI#$M "rom ebr!ary >, 2GG2 !nder a Protocol on the Pro&iional %pplication o" theRe&ied reaty o" #ha!arama. Nine protocol had been dra"ted to amend the $riinal reatyo" #ha!arama and had been conolidated into the Re&ied reaty2Q ined at Naa! in 2GG1,*ith a n!mber o" the Protocol ha&in been applied in part or in "!ll "rom their creation in 1AA7-1AA@ incl!din the pro&iion on the ree Mo&ement o" S+illed National.

% o" F!ly =, 2GGJ, it no* ha 12 member. %ltho!h the #aribbean Sinle Mar+et and Economy

(#SME) ha been etablihed, in 2GGJ it *a only e5pected to be "!lly implemented in 2GG@.


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Phae 1 *a to ta+e place bet*een 2GG@ and 2GGA *ith the conolidation o" the Sinle Mar+etand the initiation o" the Sinle Economy. It main element *o!ld incl!de;

he o!tline o" the 'e&elopment iion and the Reional 'e&elopment Stratey

he e5tenion o" cateorie o" "ree mo&ement o" labo!r and the treamlinin o" e5itinproced!re, incl!din continent riht

!ll implementation o" "ree mo&ement o" er&ice pro&ider, *ith treamlined proced!re

Implementation o"


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4hile prore on the element o" Phae 1 ha not re!lted in it completion by 2GGA, a n!mbero" it element ha&e been met, incl!din;

he o!tline o" the 'e&elopment iion and the Reional 'e&elopment Stratey

he e5tenion o" cateorie o" "ree mo&ement o" labo!r (to no* incl!de to ho!ehold dometic,n!re, teacher and *or+er holdin peci"ic cateorie o" &ocational :!ali"ication) and thetreamlinin o" e5itin proced!re, incl!din continent riht

!ll implementation o" "ree mo&ement o" er&ice pro&ider, *ith treamlined proced!re

Etablihment o" the Reional 'e&elopment !nd and Reional Stoc+ E5chane

Notable element that ha&e yet to be completed are leal entrenchment "or the #%RI#$M#harter "or #i&il Society, appro&al o" the #%RI#$M In&etment Reime and #%RI#$Minancial Ser&ice %reement (altho!h in %!!t 2G1= inance Miniter o" the member tate

in a #omm!nity #o!ncil meetin appro&ed the dra"t #%RI#$M inancial Ser&ice %reementand the dra"t amendment to the Intra-#%RI#$M 'o!ble a5ation %reement), andimplementation o" the pro&iion the Roe 0all 'eclaration on 3o&ernance and Mat!reReionalim.

#'ase 2

Phae 2 i to ta+e place bet*een 2G1G and 2G1? and conit o" the conolidation and completiono" the Sinle Economy. It i e5pected that deciion ta+en d!rin Phae 1 *o!ld be implemented

*ithin thi time period, altho!h the detail *ill depend on the technical *or+, con!ltation anddeciion that *o!ld ha&e been ta+en. Phae 2 *ill incl!de;

1.)0armoniation o" ta5ation ytem, incenti&e and the "inancial and re!latory en&ironment.

2.)Implementation o" common policie in aric!lt!re, enery-related ind!trie, tranport, malland medi!m enterprie, !tainable to!rim and aro-to!rim.

=.)Implementation o" the Reional #ompetition Policy and Reional Intellect!al PropertyReime.

=.)0armoniation o" "ical and monetary policie.

>.)Implementation o" a #%RI#$M Monetary nion.

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he E!raian Economic nion (E%E or EE) i an economic !nion o" tate located primarilyin northern E!raia. % treaty aimin "or the etablihment o" the EE *a ined on 2A May

2G1> by the leader o" elar!, /aBa+htan and R!ia, and came into "orce on 1 Fan!ary 2G1?.reatie aimin "or %rmeniaD and /yryBtanD acceion to the E!raian Economic nion *ereined on A $ctober 2G1> and 2= 'ecember, repecti&ely. %rmeniaD acceion treaty came into"orce on 2 Fan!ary 2G1?. /yryBtanD acceion treaty came into e""ect on J %!!t 2G1?. Itparticipated in the EE "rom the day o" it etablihment a an accedin tate.

In 1AA>, the Preident o" /aBa+htan, N!r!ltan NaBarbaye&, "irt !eted the idea o" creatina reional tradin bloc d!rin a peech at Moco* State ni&erity. N!mero! treatie *ere!be:!ently ined to etablih the tradin bloc rad!ally. Many politician, philoopher and

political cientit ha&e ince called "or "!rther interation to*ard a political, military andc!lt!ral !nion. 0o*e&er modern-day /aBa+htan ha inited the !nion tay p!rely economic ait ee+ to +eep it independence and o&ereinty intact. In pite o" that, t*o E%E membertateelar! and R!ia"orm a political !nion; the nion State and all E%E membertate participate in the #ollecti&e Sec!rity reaty $raniBation, an intero&ernmental m!t!alde"ene alliance.

he E!raian Economic nion ha an interated inle mar+et o" 1@= million people and a ro

dometic prod!ct o" o&er > trillion .S. dollar (PPP). he EE introd!ce the "ree mo&ement o"ood, capital, er&ice and people and pro&ide "or common tranport, aric!lt!re and enerypolicie, *ith pro&iion "or a inle c!rrency and reater interation in the "!t!re. he !nionoperate thro!h !pranational and intero&ernmental intit!tion. he S!preme E!raianEconomic #o!ncil i the LS!preme odyL o" the nion, conitin o" the 0ead o" the MemberState. he other !pranational intit!tion are the E!raian #ommiion (the e5ec!ti&e body),the E!raian Intero&ernmental #o!ncil and the #o!rt o" the EE (the j!dicial body)

254/ist&r

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%"ter the end o" the #old 4ar and the 'iol!tion o" the So&iet nion, R!ia and the #entral%ian rep!blic *ere *ea+ened economically and "aced decline in 3'P. Pot-So&iet tate!nder*ent economic re"orm and pri&atiation. he proce o" E!raian interation beanimmediately a"ter the brea+-!p o" the So&iet nion to al&ae economic tie *ith Pot-So&iettate thro!h the creation o" the #ommon*ealth o" Independent State on @ 'ecember 1AA1 by

the preident o" elar!, /aBa+htan and R!ia.

In 1AA>, d!rin a peech at Moco* State ni&erity Preident o" /aBa+htan, N!r!ltanNaBarbaye&, !eted the idea o" creatin a reional tradin bloc in order to connect and pro"it"rom the ro*in economie o" E!rope and Eat %ia. he idea *a :!ic+ly een a a *ay tobolter trade, boot in&etment in the reion, and er&e a a co!nter*eiht to 4eterninteration !nion.

F&"di"* treaties 1BB0s4

Meetin o" the leader o" the #ommon*ealth o" Independent State (#IS) in ih+e+, 2GG@. he#IS initiated the lenthy proce o" E!raian interation.

'!rin the 1AAG, the E!raian interation proce *a lo*, poibly d!e to the economic criie5perienced a"ter the diol!tion o" the So&iet nion and the iBe o" the co!ntrie in&ol&ed(R!ia, elar! and /aBa+htan co&er an area o" abo!t 2G million +m). % a re!lt, n!mero!treatie ha&e been ined by member tate to etablih the reional tradin bloc rad!ally.

In 1AA?, elar!, /aBa+htan, R!ia, and later accedin tate /yryBtan and aji+itan inedthe "irt areement on the etablihment o" a #!tom nion. It p!rpoe *a to rad!ally leadthe *ay to*ard the creation o" open border *itho!t paport control bet*een member tate.

In 1AAJ, elar!, /aBa+htan, R!ia and /yryBtan ined the reaty on Increaed Interationin the Economic and 0!manitarian ield to bein economic interation bet*een co!ntrie toallo* "or the creation o" common mar+et "or ood, er&ice, capital, labo!r, and de&elopininle tranport, enery and in"ormation ytem.

In 1AAA, elar!, /aBa+htan, R!ia, /yryBtan and aji+itan ined the reaty on the

#!tom nion and the Sinle Economic Space by clari"yin the oal and policie the tate*o!ld !nderta+e in order to "orm the E!raian #!tom nion and the Sinle Economic Space.

Erasia" Ec&"&mic C&mm"it 2000201=4

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o promote "!rther economic interation and more cooperation, in 2GGG elar!, /aBa+htan,R!ia, /yryBtan and aji+itan etablihed the E!raian Economic #omm!nity (E!r%E#)*hich Bbe+itan joined in 2GGJ. he treaty etablihed a common mar+et "or it member tate.he E!raian Economic #omm!nity *a modelled on the E!ropean Economic #omm!nity. het*o had a comparable pop!lation iBe o" 171 million and 1JA million, repecti&ely.

% reaty on a Sinle Economic Space by elar!, /aBa+htan, R!ia and +raine *a ined in2GG= and rati"ied in 2GG>, b!t the proce *a talled a"ter the $rane re&ol!tion.

In 2GG7, elar!, /aBa+htan and R!ia ined an areement to create a #!tom nionbet*een the three co!ntrie.

Esta!$is'i"* t'e cst&ms "i&" a"d si"*$e maret 2010-201=4

% eion o" the S!preme E!raian Economic #o!ncil (compoed o" the !nionD head o" tate) iheld at leat once e&ery year.he #!tom nion o" elar!, /aBa+htan, and R!ia (no* theE!raian #!tom nion) came into e5itence on Fan!ary 1, 2G1G. he #!tom nionDprioritie *ere the elimination o" intra-bloc tari"", etablihin a common e5ternal tari"" policyand the elimination o" non-tari"" barrier. It *a la!nched a a "irt tep to*ard "ormin abroader inle mar+et inpired by the E!ropean nion, *ith the objecti&e o" "ormin an alliancebet*een "ormer So&iet tate. he member tate planned to contin!e *ith economic interationand *ere et to remo&e all c!tom border bet*een each other a"ter F!ly 2G11.

$n 1 Fan!ary 2G12, the three tate etablihed the E!raian Economic Space *hich en!re the

e""ecti&e "!nctionin o" a inle mar+et "or ood, er&ice, capital and labo!r, and to etablihcoherent ind!trial, tranport, enery and aric!lt!ral policie. he areement incl!ded aroadmap "or "!t!re interation and etablihed the E!raian Economic #ommiion (modelled onthe E!ropean #ommiion). he E!raian Economic #ommiion er&e a the re!latoryaency "or the E!raian #!tom nion, the Sinle Economic Space and the E!raian Economicnion.

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C/A#TER A,A?A,=17

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@ to 1AJ1,the Eat %"rican #ommon Ser&ice $raniBation (E%#S$) "rom 1AJ1 to 1AJ7, and the 1AJ7 to1A77 E%#. !r!ndi and R*anda joined the E%# on J F!ly 2GGA.

Inter-territorial co-operation bet*een the /enya #olony, the anda Protectorate, and theananyi+a erritory *a "irt "ormalied in 1A>@ by the E%0#. hi pro&ided a c!tom !nion,a common e5ternal tari"", c!rrency, and potae. It alo dealt *ith common er&ice in tranport

and comm!nication, reearch, and ed!cation. ollo*in independence, thee interatedacti&itie *ere recontit!ted and the E%0# *a replaced by the E%#S$, *hich many ober&ertho!ht *o!ld lead to a political "ederation bet*een the three territorie. he ne* oraniationran into di""ic!ltie beca!e o" the lac+ o" joint plannin and "ical policy, eparate politicalpolicie, and /enyaD dominant economic poition. In 1AJ7, the E%#S$ *a !pereded by theE%#. hi body aimed to trenthen the tie bet*een the member thro!h a common mar+et, acommon c!tom tari"", and a rane o" p!blic er&ice to achie&e balanced economic ro*th*ithin the reion.

In 1A77, the E%# collaped a"ter ten year. #a!e "or the collape incl!ded demand by /enya

"or more eat than anda and anBania in deciion-ma+in oran, diareement *ithandan dictator Idi %min *ho demanded that anBania a a member tate o" the E%# ho!ldnot harbor "orce "ihtin to topple a o&ernment o" another member tate, and the diparateeconomic ytem o" ocialim in anBania and capitalim in /enya. he three member tatelot o&er i5ty year o" co-operation and the bene"it o" economie o" cale, altho!h ome/enyan o&ernment o""icial celebrated the collape *ith champane.


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he E%# *a "inally re&i&ed on =G No&ember 1AAA, *hen the treaty "or it re-etablihment *ained. It came into "orce on 7 F!ly 2GGG, 2= year a"ter the total collape o" the de"!nctert*hile comm!nity and it oran. % c!tom !nion *a ined in March 2GG>, *hichcommenced on 1 Fan!ary 2GG?. /enya, the reionD laret e5porter, contin!ed to pay d!tie onood enterin the other "o!r co!ntrie on a declinin cale !ntil 2G1G. % common ytem o"

tari"" *ill apply to ood imported "rom third-party co!ntrie.

Political dimenion

It ha been ar!ed, perhap h!moro!ly, that the +ey dri&er "or /enya, anda, and anBaniaare that /enya *ihe to e5port !rpl! capital, anda ee+ an o!tlet "or it !rpl! labo!r, andanBania *ant to realie a Pan-%"rican &iion. It ha alo been ar!ed, ho*e&er, that thecommonalitie o "ar deeper. Many o" the national elite old eno!h to remember the "ormer

E%# o"ten hare memorie and a harp ene o" lo at it e&ent!al diol!tion. More cynically,other ha&e ar!ed that thi hitorical ambition potentially pro&ide politician *ith the ability topreent themel&e a tatemen and repreentati&e o" a reater reional interet. !rthermore,E%# intit!tion brin ini"icant ne* po*er to dipoe and depoe to thoe *ho er&e in them.

Some ha&e :!etioned the e5tent to *hich the &iion o" a political !nion are hared o!tide theelite and the relati&ely elderly, ar!in that the yo!th"!l ma o" the pop!lation i not *ellin"ormed abo!t the proce in any o" the co!ntrie. $ther ha&e pointed to an enhanced ene o"Eat %"rican identity de&elopin "rom modern comm!nication. #ommitment to the "ormal E%#idea i relati&ely narro*, in both ocial and enerational term, and th! many ha&e :!etionedthe timetable "or the project. at-trac+in political !nion *a "irt dic!ed in 2GG> andenjoyed a conen! amon the three preident o" /enya, anBania, and anda. h!, a hih-le&el committee headed by %mo 4a+o o" /enya *a commiioned to in&etiate thepoibility o" peedin interation o a to achie&e political "ederation ooner than pre&io!ly&i!alied. 8et, there ha&e been concern that rapid chane *o!ld allo* pop!lar reactionarypolitic aaint the project. here ha been an ar!ment, ho*e&er, that there are hih cot that*o!ld be re:!ired at the beinnin and that "at-trac+in the project *o!ld allo* the bene"it tobe een earlier.

here remain ini"icant political di""erence bet*een the tate. M!e&eniD !cce in obtaininhi third-term amendment raied do!bt in the other co!ntrie. he inle-party dominance in theanBanian and andan parliament i !nattracti&e to /enyan, *hile /enyaD ethnic-politicremain abent in anBania. R*anda ha a ditincti&e political c!lt!re *ith a political elitecommitted to b!ildin a de&elopmental tate, partly to a"e!ard the !ti ro!p aaint a ret!rnto ethnic &iolence.

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$ther problem in&ol&e tate bein rel!ctant to relin:!ih in&ol&ement in other reional ro!p,e.., anBaniaD *ithdra*al "rom #$MES% b!t tayin *ithin the S%'# bloc "or the EconomicPartnerhip %reement neotiation *ith the E!ropean nion. Many anBanian are alo

concerned beca!e creatin a common mar+et mean remo&in obtacle to the "ree mo&emento" both labo!r and capital. ree mo&ement o" labo!r may be percei&ed a hihly deirable inanda and /enya, and ha&e important de&elopmental bene"it in anBania ho*e&er, inanBania there i *idepread reitance to the idea o" cedin land riht to "oreiner, incl!dincitiBen o" /enya and anda.

In"ormal poll ha&e indicate that mot anBanian (@G percent) ha&e an !n"a&orable &ie* o" theEat %"rican ederation. anBania ha more land than all the other E%# nation combined, and

ome anBanian "ear landrab by the c!rrent reident o" the other E%# member nation


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the application proce one month later. he application *a initially de"erred by the E%# in'ecember 2G12, ho*e&er incident *ith andan boda-boda operator in So!th S!dan ha&ecreated political tenion and may delay the proce.

In 'ecember 2G12, anBania o""icially areed to So!th S!dan6 bid to join the E%#, clearin the*ay "or the *orld6 ne*et tate to become the reional bloc6 i5th member. In May 2G1= heE%# et aide U@2,GGG "or the admiion o" So!th S!dan into the bloc e&en tho!h admiionmay not happen !ntil 2G1J. he proce, to tart a"ter the E%# #o!ncil o" Miniter meetin in%!!t 2G1=, *a projected to ta+e at leat "o!r year. %t the 1>th $rdinary S!mmit held inNairobi in 2G12, E%# head o" tate appro&ed the &eri"ication report that *a preented by the#o!ncil o" Miniter, then directed it to tart the neotiation proce *ith So!th S!dan.

% team *a "ormed to ae So!th S!danD bid ho*e&er, in %pril 2G1>, the nation re:!eted a

delay in the admiion proce, pre!mably d!e to onoin internal con"lict.

Sda"

S!dan applied to join the E%#, b!t it memberhip i tronly oppoed by anBania and anda.hey contend that beca!e o" S!danD lac+ o" a direct border *ith the E%#, it alleedlydicriminatory action to*ard blac+ %"rican, it record o" h!man riht &iolation, and ithitory o" hotilitie *ith both anda and candidate co!ntry So!th S!dan, it i ineliible to join.S!danD application *a rejected by the E%# in 'ecember 2G11.

S&ma$ia

Repreentati&e o" Somalia applied "or memberhip in the E%# in March 2G12. he application*a conidered by the E%# 0ead o" State in 'ecember 2G12, *hich re:!eted that the E%##o!ncil *or+ *ith Somalia to &eri"y their application. In ebr!ary 2G1?, the E%# aaindeliberated on the matter b!t de"erred a deciion a &eri"ication had not yet tarted nor hadpreparation *ith the o&ernment o" Somalia been "inaliBed

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he oraniation hold it o*n m!lti-port e&ent in the "orm o" the S%'# 3ame, *hich *a"irt held in 2GG> in Map!to. $riinally planned "or an earlier date in Mala*i and in Map!to re!lted in o&er 1GGG yo!th !nder-2G "rom1G co!ntrie ta+in part in a port proramme incl!din athletic, "ootball, netball, bo5in and

ba+etball.


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Rhode and other ritih imperialit in the 1@AG. he only di""erence i that the %"rican reerade Tone i the creation o" independent %"rican #o!ntrie. he idea i a "ree trade Bonepannin the *hole continent "rom the #ape to #airo (#ape o*n in the Rep!blic o" So!th%"rica to #airo in Eypt).

In addition to eliminatin d!plicati&e memberhip and the problem member tate aloparticipatin in other reional economic cooperation cheme and reional political and ec!ritycooperation cheme that may compete *ith or !ndermine each other, the %"rican ree radeTone "!rther aim to trenthen the blocD barainin po*er *hen neotiatin international deal.


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In ome area, mere coordination o" national acti&itie and policie i the aim o" cooperation. Inother, the member tate aim at more "ar-reachin "orm o" cooperation. or e5ample, on"orein policy the main aim i coordination and cooperation, b!t in term o" trade and economic

policy, a tihter coordination i in prore *ith a &ie* to one day etablihin a common mar+et*ith common re!latory intit!tion. he !tainable !e o" nat!ral reo!rce i commonlyhared by member tate.

S%'# ha recently recei&ed the top poition in a lobal comparion o" indicator o" 4ater#ooperation prepared by international thin+-tan+ Strateic oreiht 3ro!p. S%'# ha cored1GG in the 4ater #ooperation V!otient,*hich e5amine acti&e cooperation by riparian co!ntriein the manaement o" *ater reo!rce !in 1G parameter, incl!din leal, political, technical,en&ironmental, economic and intit!tional apect. 0ih per"ormance in the 4ater #ooperationV!otient alo mean lo* ri+ o" *ar bet*een co!ntrie in the concerned ri&er bain to red!ce

economic dependence o" S%'# co!ntrie on So!th %"rica.


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May 2G1G, at a head o" tate !mmit held in #ampana, 7? +m (>7 mi) north o" !eno%ire, "ormer %rentine Preident N[tor /irchner *a !nanimo!ly elected the "irt Secretary3eneral o" N%SR "or a t*o-year term.


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en&iioned a "ederated rep!blic encompain all o" 0ipanic %merica, *hich he calledL#olombiaL.

he independence *ar e""ort a* the conc!rrence o" interated armie compoed by Spanih%merican o" di&ere reion on both ide o" the con"lict (&.. Patriot and Royalit), and

"ihtin all o&er the territorie o" many "!t!re nation. or e5ample, the %rmy o" the %nde*hich *a athered in the nited Pro&ince o" the RZo de la Plata "o!ht in #hile, Per! andEc!ador, and later interated *ith SimWn olZ&arD %rmy (*hich itel" incl!ded troop o" "!t!reeneB!ela, #olombia and Ec!ador) to "!rther "iht in Per! and the pper Per!.

y the 1@2G, the main proponent o" a "ederation o" the ne*ly born rep!blic *a SimWnolZ&ar, altho!h thi idea *a hared by many contemporaneo!, notably incl!din Fo[ de SanMartZn and ernardo de Montea!do (e), !nder either rep!blican or contit!tional monarchicalo&ernment. In 1@2J, olZ&ar !mmoned a con"erence to be held in Panama, *hich *a to be+no*n a the L%mphictyonicL #onre o" Panama beca!e o" the parallelim *ith the 0ellenic

%mphictyonic So!th %merican S!mmit, repreentati&e o" t*el&e So!th %merican nation inedthe #!Bco 'eclaration, a t*o-pae letter o" intent anno!ncin the etablihment o" the then-named LSo!th %merican #omm!nity o" NationL. Panama and Me5ico *ere preent aober&er. he leader anno!nced the intention o" modelin the ne* comm!nity in the mold o"the E!ropean nion, incl!din a !ni"ied paport, a parliament and, e&ent!ally, a inle c!rrency.

he then Secretary 3eneral o" the %ndean #omm!nity %llan 4aner pec!lated that anad&anced !nion !ch a the E ho!ld be poible *ithin the ne5t "i"teen year.

Nami"*

$n 2@ 'ecember 2GG?, #hilean "ormer "orein miniter Inacio 4al+er propoed that thenionD "ormer deination, the So!th %merican #omm!nity o" Nation, abbre&iated a #SN, be

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chaned to So!th %merican nion ne&erthele, many member tated to him that that propoalhad already been rejected to pre&ent con"!ion ince it acronym o" .S.%. (Spanih; niWnS!damericana) *o!ld be eaily con"!ed "or the nited State o" %merica. In the pre, thephrae Lnited State o" So!th %mericaL *a bandied abo!t a an analoy to the nited State tore"lect the economic and political po*er that the !nion *o!ld ha&e on the *orld tae.

he name *a "inally chaned on 1J %pril 2GG7 to nion o" So!th %merican Nation. he ne*name *a jointly areed by all member tate d!rin the "irt day o" meetin at the irt So!th%merican Enery S!mmit, held at Ila Mararita, eneB!ela.

Strctre

0ead:!arter o" N%SR

%t the moment, the pro&iional tr!ct!re o" the N%SR i a "ollo*;% permanent Secretariati to be etablihed in V!ito, Ec!ador. he Secretary 3eneral, *ith a t*o-year mandate, i to beelected on a conen!al bai amon the 0ead o" State o" the member tate. ormer %rentinePreident N[tor /irchner *a deinated the "irt Secretary 3eneral on > May 2G1G.

he preident o" the member nation *ill ha&e an ann!al meetin, *hich *ill ha&e the !periorpolitical mandate. he "irt meetin *a in raZlia (raBil) on 2A=G September 2GG?. heecond meetin *a in #ochabamba (oli&ia) on @A 'ecember 2GGJ. he third meetin *aheld in raZlia on 2= May 2GG@.

N[tor /irchner, N%SRD "irt Secretary 3eneral.

E5traordinary meetin o" head o" tate and the N%SR o&ernment held in raZlia.

he Preidency Pro empore, i e5ercied "or a one-year period on a pro tempore bai by one o"the head o" tate o" each N%SR Member State, the !cceion "ollo*in alphabetical order.he "irt leader to occ!py thi poition *a #hilean Preident Michelle achelet. %ccordin to'eciion Reached in the Political 'ialo!e *hich *a ined d!rin the I So!th %mericanEnery S!mmit.

he miniter o" "orein a""air o" each co!ntry *ill meet once e&ery i5 month. hey *ill"orm!late concrete propoal o" action and o" e5ec!ti&e deciion. he Preident o" theMerco!rD permanent repreentati&e committee and the director o" the Merco!rD department,the %ndean #omm!nityD eneral ecretary, %


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$n A 'ecember 2GG?, a pecial commiion *a etablihed in chare o" ad&ancin the proceo" So!th %merican Interation. It conit o" 12 member, *hoe "!nction i to elaboratepropoal that *ill help the proce o" interation bet*een the So!th %merican nation.

%n E5ec!ti&e #ommiion, *hich *a created by the II #SN meetin, *a tran"ormed in the

Political #ommiion or 'eleate #o!ncil, accordin to 'eciion Reached in the Political'ialo!e.

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he object o" thi project i to analyBe the e&ol!tion o" economic !nion "rom it

inpection latet incarnation in the "orm o" E!raian !nion compriin the comple5

array o" areement "ormin it !btance and mandate.

he t!dy "oc!e on the ade:!acy or the inade:!acy o" the ytem a it e&ol&ed

and "!nctioned in an en&ironment o" chanin international economic and political

reality.

he t!dy alo attempt to rapple *ith the more di""ic!lt :!etion o" loo+in at

the "!t!re propect o" the ytem, the train that it *ill need to "ace and the

!be:!ent chane that are called "or in it approach, content and "!nctionin,

ta+in into acco!nt the "!t!re o&ernance need o" the *orld economy.

hi project conit o" three main part.

Introd!ction o" economic !nion

Second part incl!de type o" economic !nion

hird and the lat part incl!de


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+i!$i&*ra;': -

1 ***.britannica.com

2 ***."inancialdictionary.com

= ***.nada:.com

> ***.occ!pytheory.or(E!ropean !nion)

? ***.haBar.or(E!raian !nion)
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economic union and its types

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