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Difficulty: EasyTransportation, Trade, and Economic Groupings in Africa

Arrange the following stages of regional economic integration in Africa in order from the lowest level of economic integration to the highest level.

  1. 1Free Trade Area
  2. 2Customs Union
  3. 3Common Market
  4. 4Economic Union

Answer

The correct sequence from lowest to highest level of economic integration is: Free Trade Area, Customs Union, Common Market, and Economic Union.
Regional economic integration progresses sequentially starting from a Free Trade Area (internal tariff removal), followed by a Customs Union (common external tariff), advancing to a Common Market (free movement of labor and capital), and culminating in an Economic Union (harmonized fiscal and monetary policy).

Step-by-Step Solution

1
Identify the foundational stage where internal trade barriers are eliminated.
Free Trade Area is the starting point of regional economic integration.
Countries first remove tariffs on trade among themselves before coordinating external trade rules.
2
Identify the stage that establishes unified external trade policies.
Customs Union is the second stage.
It builds upon the Free Trade Area by instituting a common external tariff against non-member nations.
3
Identify the stage allowing mobility of production factors across borders.
Common Market is the third stage.
It extends integration beyond physical trade to permit free movement of labor, capital, and services.
4
Identify the stage requiring institutional policy harmonization and monetary alignment.
Economic Union is the final and highest stage.
It requires member states to harmonize macro-economic policies and often adopt a unified currency.

Key Concept

Stages of Regional Economic Integration
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Topics

Transportation, Trade, and Economic Groupings in Africa

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