when regional economies agree on integration trade barriers fall and economic and political coordination increases 
specialists in this area define seven stages of economic integration a preferential trading area a free trade area a customs union a common market an economic union an economic and monetary union and complete economic integration 2 the final stage represents a total harmonization of fiscal policy and a complete monetary union the advantages of economic integration fall into three categories trade creation employment opportunities and consensus and cooperation 1more specifically economic integration typically leads to a reduction in the cost of trade improved availability of goods and services a wider selection of them and gains in efficiency that lead to greater purchasing power economic integration can reduce the costs of trade improve the availability of goods and services and increase consumer purchasing power in member nations 1employment opportunities tend to improve because trade liberalization leads to market expansion technology sharing and cross border investment political cooperation among countries also can improve because of stronger economic ties which provide an incentive to resolve conflicts peacefully and lead to greater stability despite the benefits economic integration has costs these fall into three categories because economists and policymakers believe economic integration leads to significant benefits many institutions attempt to measure the degree of economic integration across countries and regions the methodology for measuring economic integration typically involves multiple economic indicators including trade in goods and services cross border capital flows labor migration and others assessing economic integration also includes measures of institutional conformity such as membership in trade unions and the strength of institutions that protect consumer and investor rights real world example of economic integrationthe european union eu was created in 1993 and included 27 member states in 2024 since 1999 20 of those nations have adopted the euro as a shared currency 3 according to data from the world bank the eu accounted for roughly 16 6 of the world s gross domestic product in 2022 4the united kingdom voted in 2016 to leave the eu in january 2020 british lawmakers and the european parliament voted to accept the united kingdom s withdrawal the uk officially split from the eu on january 1 2021 5