Question
Identify the correct statement.
The correct answer is
The European Union, including European Monetary Union, was the biggest and most important regional integrative scheme.
Regional Integration Scheme Analysis
This question asks to identify the correct statement regarding major regional integration schemes.
Option Analysis
- Option 1: Incorrect. The Maastricht Treaty (1992) established the European Union (EU) and significantly reformed the European Communities (EC). It did not rename the European Community (EC) as the European Economic Community (EEC). The EC existed as a pillar within the newly formed EU.
- Option 2: Incorrect. The primary goal of the ASEAN Free Trade Area (AFTA), established in 1992 (implemented later), was to reduce intra-regional tariffs and non-tariff barriers to trade in goods, boosting regional economic competitiveness. While it fosters cooperation, softening restrictions on professional movement wasn't its main objective.
- Option 3: Incorrect. The South Asian Association for Regional Cooperation (SAARC) was founded in 1985 and currently includes eight member states: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. The statement incorrectly identifies the number of member countries as six.
- Option 4: Correct. The European Union (EU), particularly with advancements like the European Monetary Union (EMU) creating the Euro, represents the deepest and most comprehensive form of regional integration globally, encompassing economic, political, and social dimensions. It is widely regarded as the biggest and most significant regional integrative scheme.
Conclusion
Based on the factual analysis of each statement, Option 4 accurately describes the significance of the European Union as a regional integrative scheme.
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Important Questions from Regional Economic Integration
- SAFTA (South Asian Free Trade Agreement) categorises member nations as Non-Least Developed Contracting States (NLDCS) and Least Developed Contracting States (LDCS). Identify the NLDSC states from the following
A. Bangladesh
B. Pakistan
C. Bhutan
D. India
E. Sri Lanka
Choose the correct answer from the options given below: - Common market achieves uniformity in monetary policy and fiscal policy among the member countries in __________.
- Match List-I with List-II relating to benefits and cost of economic integration and identify the code representing correct matching.Codes :
List – I List – II a. Trade creation i. Movement of production and resources in opposite directions. b. Trade diversion ii. Become active when a member country does not augment export but simply shifts its imports from low cost source to high cost source. c. Trade deflection iii. Shifting the locus of production from high cost to low cost centre within the union. d. Polarisation forces iv. Goods produced in a third country entering a free trade area through a member country having lower tariff. - What is the situation referred to as, amongst the following, when intra-region trade is duty free but there is variation in tariff structure for import from a third country ?
Match the items of List - I with List - II and choose the correct code of combination :
List - I List - II (a) It abolishes all restrictions on trade among the members (i) Common Market (b) It not only eliminates all restrictions on trade among members but also adopts a uniform commercial policy against the non-members (ii) Economic Union (c) It allows free movement of labour and capital within the common market (iii) Free Trade Area (d) It achieves some degree of harmonization of national economic policies, through a common central bank, unified monetary and fiscal policy, etc. (iv) Customs Union
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