Integration involves the recognition that partnership between countries can achieve this goal in a more efficient way than by unilateral or independent pursuance of policy in each country. Integration requires at least some division of labor and freedom of movement for goods and services within the group. Higher types of integration arrangements also require free movement of factors of production within the integrated area, as well as certain restrictions on these movements between the integrated area and those outside it. The success and durability of integration requires at least some consultation, if not coordination, of competition, monetary, fiscal and regional development policies. The process of integration may be practically unlimited.
Economic integration is an evolving and continuing process more than a limited one.
Regional integration arrangements may take different forms depending on the degree of integration between countries. Customs union , when the member states agree to a common external tariff. The rational for the creation of a customs union is to prevent that all of the goods coming from abroad to the free trade area come through the country with the lowest tariffs. Common market , when countries agree to remove the barriers to the movement of capital and labor. These would increase investment in those countries as well as the demand for the removal of barriers to the movement of capital and labor.