International Business Chapter 8 - regional economic integration - terms

Regional economic integration (regionalism) -- process whereby countries in a geographic region cooperate with one another to reduce or eliminate barriers to the international flow of products, people, or capital.
Free trade area -- economic integration, whereby countries seek treatment of all barriers to trade between themselves, but each country determines its own barriers against nonmembers.
Customs union -- economic integration, whereby countries remove all barriers to trade between themselves but erect a common trade policy against nonmembers.
Common market -- economic integration, whereby countries remove all barriers to trade in the movement of labor and capital between themselves. But erect a common trade policy against nonmembers.
Economic union -- economic integration, whereby countries remove barriers to trade in the movement of labor and capital, erect a common trade policy against nonmembers, and coordinate their economic policies.
Political union -- economic and political integration, whereby countries coordinate aspects of their economic and political systems.
Trade creation -- increase in the level of trade between nations that results from regional economic integration.
Trade diversion -- the version of trade away from nations not belonging to a trading bloc and toward member nations
European monetary union -- the European Union plan that established its own Central Bank and currency.