Economic integration is usually considered to be the principle reason for the more interconnected and unified Europe of today. Market integration originated long before the major world wars that plagued European history took place. The Holy Roman Empire is often cited as being the federal political entity that inspired the modern assembly of the EU. Similarly to the EU, The Holy Roman Empire was never a cohesive political being but merely a loose confederation that seeked stability within its borders by implementing institutionalised laws yet that nations abided to. Yet, it was more emblematic than a real authoritarian institute with its ambiguousness contrasting with the EU; as despite it being a form of ‘aspirational politics’ and being neither a nation state or ‘open market’ it is far more functional version that provides different nations with various economical and political advantages that the ambiguous Holy Roman Empire failed to do. The EU is almost an upgraded alternative to the Holy Roman Empire that aims to prevent the many shortcomings that the Holy Roman Empire possessed but whilst still retaining their successes such as the one currency for all system known as Thaler and their diverse trade routes. It is also important to note the role that imperialism and colonialism played in expanding market control outwards to countries far beyond Europe and consequently resulting in the rise of Europe as a political centre. However it is post-1945 that we see the major economic revival of Europe and why The EU is now dubbed the pioneer of regional integration. Shortly after World War 2, The council Of Europe was created in 1949, an organisation that advocates freedom of expression and of the media, freedom of assembly, equality, and the protection of minorities (bref, 2018).The aim of the Council of Europe is to “achieve a greater unity between its members for the purpose of safeguarding and realising the ideals and principles which are their common heritage and facilitating their economic and social progress.”(Treaty Office, 2018). This is the first example of Europe attempting to foster mutual cooperation. However, it is commonly criticised for not enough in fulfilling their obligation and this may be due to its inability to make any binding laws. Between the 1958 and 1993 is what we commonly refer to as the common market era where we see the explosion of market integration. The EU’s market integration started with the free circulation of goods, in light of the rationale that the more states exchange with each other and become interdependent, the less they are probable to declare war on each other. It has extended out to the free movement of people (stimulating travel, work abroad and social trade), and improved monetary incorporation through more liberated development of capital and administrations, the choice of joining a typical money, and other joint activities and approaches (Suder, 2017). Although Asia also possesses numerous geo-economic groupings that may lead to EU-like integration including the East Asia Free Trade Agreement (EAFTA), the Comprehensive Economic Partnership in East Asia (CEPEA) and the Association of Southeast Asian Nations (ASEAN), it is faced with many significant hurdles such as the fact that the region’s cultures, political regimes, economic systems and religious beliefs are more divergent than Europe and the fact that major superpower nations reside in Asia, therefore it is difficult whether they’d be willing to achieve equal partnership rather than “extending the predominance of major regional actors; of reaching partnership rather than absorption”.(Suder, 2017).
It is vital to distinguish between the two definitions that surround market integration, “negative integration being the elimination of barriers that restrict the movement of goods, services and factors of production that intervene with the efficient functioning of markets and, “positive integration”, that refers to to the creation of a common sovereignty through the modification of existing institutions and the creation of new ones for social protection, equality and other socio-political goals (Learneurope.eu, 2018). The establishment of the European Free Trade Area (EFTA) , a form of “negative integration” has proven to have strengthened ties with Europe as the EFTA is the European Union’s third largest trading partner in merchandise, and the second largest in services whilst the EU is EFTAs largest trading partner; 70% of merchandise imported to EFTA countries comes from the EU (Efta.int, 2018). Exports and imports of goods within the euro area increased from about 26% of GDP in 1998, the year before the adoption of the single currency, to around 32% in 2006 (Bank, 2007). A customs union (CU) enhances a free trade area by, in addition to removing internal barriers to trade, also requiring participating nations to harmonise their external trade policy which consists of agreeing on common external tariffs (CET) and supervise all products that enter the region (Holden, 2003). The EU and Turkey have implemented a customs union whereby Goods may travel between the two entities without any customs restrictions resulting in the EU becoming Turkey’s main export market 44.5% and importing 38% of goods from it as well (Ec.europa.eu, 2017). Finally, the introduction of the common currency in 1990 is arguably the pinnacle of regional integration in Europe that was a attempt to stabilise the fluctuations of the European countries’ currencies. There were 3 principle factors that triggered the use of the euro outlined by Jeffry Frieden, the quest for anti-inflationary credibility where nations with high inflation (France) are able to tie their currencies to that of low-inflation countries such as Germany in order to strengthen perceptions about their obligations to reduce expansion levels (Frieden, 1998). The idea of establishing a single European market largely appealed to large corporations and banks allowing them a larger base whereby they are able to confront outside competitors collectively and reinstating those links within Europe. However the Euro zone has been criticised for failing as an optimal currency area as it “undertakes an empirical analysis of the labour market and finds no progress toward flexibility or integration”