Final answer:
Valyria and Winterfell's agreement to remove trade barriers without a common external trade policy is indicative of a Free Trade Area.
Step-by-step explanation:
The degree of regional integration being described between Valyria and Winterfell is that of a Free Trade Area. This level of integration allows for the free circulation of goods between member nations without tariffs or quotas, but does not require a common external trade policy towards non-members. By not having a unified stance towards outside nations, both Valyria and Winterfell maintain their individual trade policies, which is a characteristic feature of a free trade area.
A step up from this arrangement would be a Customs Union, which necessitates a common external trade policy. Beyond that lies the Common Market, which includes the free movement of goods, services, capital, and labor. The highest level of economic integration is an Economic Union, which combines the qualities of a common market with additional fiscal and monetary policy coordination. Since Valyria and Winterfell have not agreed on a joint external trade policy, they have not reached the level of a customs union or higher.