Geographical differences in the depth of integration of the world’s common markets

Integration associations of different levels are actively developing in all regions of the world. Eight common markets, namely the European Economic Area (EEA), the Eurasian Economic Union (EEU), the Cooperation Council for the Arab States of the Gulf (GCC), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Southern Common Market (MERCOSUR), the Central American Common Market (CACM) and the Caribbean Single Market and Economy (CSME) are central. These are integration associations based on free trade and free exchange of all factors of production. The purpose of the study was to identify geographic differences in the depth of integration within the world’s common markets. The depth of integration is studied quantitatively using the index of integration depth developed by the authors. It is based on the principle of common approach to assessing integration across four freedoms, i. e. the movement of goods, services, people and capital, represented in the aggregate index by two indicators, namely openness (the ratio of a particular flow within the common market to the size of the country) and importance (the share of flows within the common market in all external flows). This approach allows to assess the country’s participation in both regional and international movement of production factors. The study revealed that common markets formed on similar principles differ significantly in the depth of integration. In contrast to the developed European common market, participants in the Asian, African and Latin American common markets are characterized by a much more intensive exchange of production factors with third countries than with each other. This is facilitated by the regional specific features of the processes of international economic integration. Only the EEA can be classified as a common market with high level of integration; the EEU, CACM, CSME and EAC are characterised by the low level of integration; and it is very low in the GCC, MERCOSUR and ECCAS. There are many centres of diffusion of integration processes in the EEA and CSME; the CACM, EAC, GCC and MERCOSUR have one main centre and one sub-centre; and there is one supercentre in the EEU. In most cases, the centre’s level of integration is one of the lowest within the market.

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