The elimination or reduction of trade barriers caused by non-trade-related domestic policies is referred to as
A. regional trade integration.
B. quota reduction.
C. deep integration.
D. shallow integration.
The correct answer and explanation is:
The correct answer is C. deep integration.
Explanation:
Deep integration refers to the elimination or reduction of trade barriers that go beyond the traditional lowering of tariffs and quotas, focusing on non-trade-related domestic policies. These policies often include regulations, standards, and various domestic practices that can affect the flow of trade. While tariffs and quotas are straightforward trade barriers, non-trade-related barriers such as regulatory measures, health and safety standards, and environmental regulations can create significant challenges for international trade.
In the context of deep integration, countries seek to harmonize or align their domestic policies and regulations to facilitate smoother cross-border trade. This type of integration aims to address issues that may not necessarily be covered by traditional trade agreements but can still create significant obstacles to trade. For example, countries might negotiate to standardize product regulations, eliminate bureaucratic hurdles, or simplify customs procedures.
Deep integration differs from shallow integration, which mainly focuses on reducing tariffs and quotas. Shallow integration typically leaves domestic policies such as regulations, product standards, and other non-tariff barriers largely untouched. As a result, shallow integration does not lead to the same level of economic cooperation and trade facilitation as deep integration.
In the real world, deep integration is often seen in trade agreements like the European Union (EU) or the North American Free Trade Agreement (NAFTA), which go beyond mere tariff reductions and address more complex issues such as labor standards, environmental protection, and dispute resolution mechanisms. This form of integration is more comprehensive and can lead to closer economic ties between participating countries.
In summary, deep integration involves tackling non-trade-related domestic policies that can act as hidden barriers to trade, allowing for a more integrated and efficient global economy.