What are the disadvantages of regional economic integration?


Quick Answer

Some of the disadvantages of regional economic integration include a shifting of the workforce, less efficiency in trade, creation of trade barriers to non-members and loss of sovereignty to some extent. Economic integration is, however, regarded as key to international development, as it breaks down several trading barriers among member states.

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Full Answer

One of the demerits of regional economic integration is that it encourages a shift in workforce. If, for example, a particular region offers lucrative opportunities, most professionals are bound to move from their native countries to the country with better opportunities. This may create new challenges to the native country as it tries to compete with the others.

Another demerit is that trade inefficiency may crop up. For example, if one country traditionally engaged in trade with a particular country, their trade may be forced to stop if new laws are established which prevent countries from trading with others that do not belong to the economic union. Countries within the union may offer lower prices or may be too expensive, making trade difficult or less lucrative.

Once new regional laws come into effect, member countries may lose their sovereignty in certain matters. The new laws may behoove all countries to consult and build a consensus before doing new things, and this can be regarded as a loss of sovereignty.

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