Description of various forms of economic integration
Customs Union
Customs union refers to that form of economic integration in which two or more countries agrees among themselves to free internal trade among themselves while creating a common external tariff barrier for all non-member states.
Free-trade Area
Free-trade area refers to that form of economic integration in which two or more countries agrees among themselves to free internal trade among themselves but instead of levying a common tariff against the non- member states respective member states are free to levy tariff on non-member states as per their own discretion
Common Market
Common market is that form of economic integration in which not only the internal trade of goods and services among member states is free but capital and labor movements among member states is also free. However, member states levy a common tariff on all non-member states.