History of economic integration

Great Britain was a leading nation in international trade from the second half of the nineteenth century until the First World War, were based on free trade without trade process and tariff barriers.

However, at the end of the First World War, Great Britain ceased to be the world center, impacting economic relations, the global economic crisis accelerated the fall of the trading system, giving rise to countries increasing tariffs and imposing obstacles in the importation.

The era of free trade ended, in 1930 the United States disseminated the Smooth Hawley law increasing the tariffs on 900 products, in 1934 the USA ratified the law of reciprocal trade agreements based on the principle of reciprocity, contributing with a reduction to tariffs for certain products.

At the end of the Second World War, the USA and the Soviet Union became influential ideological blocs, so the free trade was changed by bilateralism, the USA proposed a reconstruction of the international reconstruction and development bank, the international monetary fund and the world organization of the trade, these institutions were created as trade progressed as a way to cope with economic development and seek peace in international negotiation.

Integration stages

1.Partial Scope Agreements (AAP) or preference zones: preferential access is granted to products from the countries that make up the agreement, such as tariff reductions and variable percentages. 

2.Free trade area or free trade agreement (FTA): negotiation of two or more countries where it is agreed the gradual elimination of all tariff barriers, where their tariffs go down to zero, but maintain their rates and measures with third countries. 

3.Customs Union: it is sought that products from third countries that enter any of the countries that make up the agreement have to pay the same tariff in order to have equal conditions with third parties. 

4.Common market: seeks the free mobility of goods, services, capital and people. 

5.Economic Union: free movement of goods and factors, countries agree to coordinate macroeconomic policies such as foreign exchange, fiscal and foreign trade. 

6.Total economic integration: includes the creation of a single currency and a common monetary policy.

7.Total integration: this level forms an economic and political space recognized as such by the rest of the world.

Typology of integration:

1. Territorial integration: this type of integration aims to unite a group that was divided.
There are three ways to achieve it:
• A group takes the integration initiative and uses force to achieve it.
• Several geographically close groups approach each other.
• There must be a central symbol that acts as a point of reference, as well as ethnic homogeneity.


2. National integration: seeks to create a common identity for all linguistic, religious and regional ethnic groups so that everyone feels part of the same community.

3. Social integration: seeks to overcome the difference between the elite and the people, between the rulers and the governed, each time the integration progresses, individuals will be more willing to work together for the achievement of common goals.

Multilateral organizations

World Trade Organization (WTO)

The organization is responsible for the rules that regulate trade between countries, are constituted by agreements that are signed and negotiated by most nations in the world, seeking to maintain their trade policies. It seeks to make the rules transparent, providing security for both companies and governments.

The member nations come to this organization to negotiate and try to solve the commercial problems they have between them, opting to reduce the obstacles to trade, protect the consumer and preserve public health.

World Customs Organization (WCO)

It is an intergovernmental organization that focuses exclusively on customs issues. It is considered as a help in the global customs community, since it facilitates the dialogue and the exchange of experiences among the national customs delegates.
Its work seeks the development of global standards, simplification and harmonization of customs procedures, security in the commercial supply chain, facilitation of international trade, enforcement and enforcement of customs activities and initiatives against counterfeiting and piracy. 

International Monetary Fund (IMF) 

It was born in 1944 in a conference of the United Nations, with the aim of establishing a framework of economic cooperation aimed at preventing recurrence of problems that had arisen as competitive devaluations. 
The fund aims to increase international monetary cooperation, strengthen financial stability, facilitate international trade, promote employment and sustainable economic growth and reduce poverty worldwide. 
The main objective of the fund is to ensure the stability of the international monetary system, the system of international payments and exchange rates. 
Provides services such as: 
• Financial assistance: created with the purpose of giving financial support, using various tools so that member countries can access more credits, with various lines to meet the economic needs that are required. 
• Technical assistance: it wants to help the nations in the correct application and execution of the policies, through training and specialized assistance. Support is provided in tax policy and administration, expenditure management, monetary and exchange policies, supervision and regulation of banking and financial systems, legislative frameworks and statistics. 

World Bank (WB) 

It emerged in 1944 and its main objective was to rebuild Europe after the Second World War, succeeding in promoting post-war reconstruction and alleviating poverty worldwide. 
The bank functions as a cooperative in which its members are the shareholders, who are represented by a board of governors that formulates policies seeking to reduce poverty in the countries through sustainable development. 
Some of the services offered by the bank are: 
• Generation of funds: loans are granted to developing countries. 
• Loans and loans: for investment projects and development policies. 
• Fiduciary funds and donations: countries and public and private institutions make deposits in trust funds, to allocate these funds to initiatives in favor of development. 
• Analytical and advisory services: support countries so they can achieve economic and social improvements. 
• Capacity building: trains its staff, its associates and the inhabitants of developing countries, in order to obtain knowledge and skills to improve economic and social performance.

Economic integration agreements

International economic integration agreements are agreements concluded between one or several countries in which the principles by which their trade and investment relations will be governed are indicated, as well as the consultation and solution mechanisms to settle the differences resulting from the execution of their respective commercial policies, or of the reduction or mutual suppression of barriers to trade and investment.

Multilateral organizations

World Trade Organization (WTO): Colombia is part of the agreement since April 30, 1995, its participation is essential to ensure a multilateral trade based on rules, stable, fair and open.

The WTO supports the freedom of trade, protecting the fundamental rights of people and promoting fair trade, establishing fundamental principles such as trade without discrimination, freer trade, predictability and consolidation, promotion of fair competition, promotion of development.

Latin American Integration Association (ALADI): was established on August 12, 1980, with the signing of the Montevideo Treaty, its main objective is to create a common Latin American free trade space within a flexible framework, allowing the development of different integration processes rhythms.

This scheme is based on five principles: pluralism, convergence, flexibility, multiplicity and differential treatments. Additionally, the treaty establishes three basic functions, the promotion and regulation of trade, economic complementation and cooperation actions to help expand markets.

The treaty provides support to the countries with the least economic development, in order to boost the economies in an accelerated manner.

In this way, Aladi participates with increasing prominence in regional, sub regional, bilateral, multilateral and hemispheric negotiations, technically supporting the member countries in the common regulatory framework and in the agreements that are being achieved.

Regional trade agreements

Andean Communication (CAN): It was born in 1969 through the Cartagena Agreement or the Andean Pact, the Andean Community is the most institutionally developed American economic integration agreement, has common intellectual property regimes, foreign investment, as well as to avoid double taxation. It covers a large number of laws to comply with established procedures to comply with international trade policies.

The alliance of the pacific: it is not conceived as an FTA, it is a mechanism of political economic articulation and of cooperation and integration, it looks for the productive development with the purpose of making more competitive the markets like the one of Asia Pacific.

In Colombia, through the pacific alliance, it is hoped to accelerate the insertion to Asian countries and reduce their vulnerability to international economic crises, through the development of treaties in bloc.

The negotiation of the topic of trade and integration is based on five groups, tariff reduction, rules of origin, sanitary and phytosanitary measures, technical barriers to trade and trade facilitation and customs cooperation.

Free trade agreements

These treaties are part of the economic integration in the form of a regional or bilateral trade agreement, the FTA is an agreement signed by two or more countries with the intention of eliminating tariffs and other non-tariff barriers between the parties to encourage the exchange of goods and services. services.

The FTA does not lead to monetary or political integration, these agreements are based on fundamental principles of transparency, national treatment and most favored nation, generating a commitment to facilitate trade in goods and services.

Economic complementation agreements (ECA)

The agreements represent for Colombia an opportunity to access a potential market with millions of consumers, Colombian products have preferential access to one of the largest and most protected markets in the continent, obtaining cheaper raw materials and capital goods, with the In order to contribute to the reduction of production costs and improve competitiveness.

Partial scope agreements 

Are those agreements that refer only to concessions granted to certain members of a Treaty or Convention, and therefore do not reach all signatories of the Treaty, which can be incorporated into it, only by adhesion. Agreement that only some of the member countries of ALADI participate in, although it is open to the adhesion of the rest of the member countries.

Agreements in negotiation 

•FTA Colombia-Turkey: created to strengthen trade links with countries outside the region, Turkey is a strategic partner in Europe and is projected as an economic developed in the medium term. 

•Colombia-Japan Economic Association: the main objective is the joint cooperation of the institutions of both members, the scope of this treaty embraces the goods market, services, public procurement, intellectual property, technological and commercial cooperation. 

•Trade in services agreement (TiSA): these negotiations are ongoing, seek to improve the interaction of countries and the exchange of services, giving depth in issues of market access, national treatment, transfers, acknowledgments , among others.

Conclusions

•Throughout the years, international trade has evolved worldwide, giving way to accelerated growth in the countries' economies and their trade.
•Thanks to signed treaties, Colombia has been able to compete with foreign industries, thus achieving employment and increased sales of various products.
•Multilateral organizations are organizations that seek to enforce the rules proposed by each government, in order to ensure the interaction of countries and the exchange of services, opening up large aid that benefits the country.