Final answer:
A supranational organization involves independent states willingly partaking in some level of integration for mutual benefit, with an informal group of sovereign states being the loosest form. Such organizations allow member states to engage in free trade while controlling their individual trade policies.
Step-by-step explanation:
A supranational organization is a voluntary association of three or more independent states willing to yield some degree of sovereignty for mutual benefit. The loosest form of economic integration that can be classified as such would be described as an informal group of sovereign states, otherwise known as a free trade association. This level of integration allows for free trade between its members while permitting each country to maintain its own external trade policies.
Nations often hesitate to relinquish their independence as maintaining their unique identity is paramount, especially in regions like Europe where there is significant diversity in language, currency, and legal systems. However, with the advent of global trade and the example set by successful trading blocs, nations are exploring ways to balance sovereignty with the benefits of economic integration. These include not just free trade agreements but also common markets and full economic unions, where fiscal and monetary policies are coordinated.