Regional Trade Agreements

This paper reviews the theoretical and empirical literature on regionalism. The formation of regional trade agreements has been, by far, the most popular form of reciprocal trade liberalization in the past 15 years. The discriminatory character of these agreements has raised three main concerns: that trade diversion would be rampant, because special interest groups would induce governments to form the most distortionary agreements; that broader external trade liberalization would stall or reverse; and that multilateralism could be undermined. Theoretically, all of these concerns are legitimate, although there are also several theoretical arguments that oppose them. Empirically, neither widespread trade diversion nor stalled external liberalization has materialized, while the undermining of multilateralism has not been properly tested. There are also several aspects of regionalism that have received too little attention from researchers, but which are central to understanding its causes and consequences.

Bibliographic Details

Main Authors:	Ornelas, Emanuel, Freund, Caroline
Language:	English
Published:	2010-05-01
Subjects:	AD VALOREM, AGGREGATE TRADE, ANDEAN PACT, APPAREL, AVERAGE TRADE, BARRIERS TO TRADE, BILATERAL AGREEMENT, BILATERAL AGREEMENTS, BILATERAL TARIFFS, BILATERAL TRADE, BILATERAL TRADE AGREEMENTS, BLOC TARIFFS, BLOC TRADE, CAPITAL MARKETS, COMPARATIVE ADVANTAGE, CONSUMER GAINS, CONSUMER PRICES, CONSUMER SURPLUS, CONSUMPTION POSSIBILITIES, CURRENCY, CUSTOMS, CUSTOMS UNION, CUSTOMS UNION FORMATION, CUSTOMS UNIONS, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DOMESTIC FIRMS, DOMESTIC INDUSTRY, DOMESTIC MARKET, DOMESTIC PRODUCERS, ECONOMIC INTEGRATION, ECONOMIC POLICY, ELASTICITY OF SUBSTITUTION, EQUILIBRIUM, EUROPEAN UNION, EXPORT PRICES, EXPORT SECTOR, EXPORTERS, EXPORTS, EXTERNAL LIBERALIZATION, EXTERNAL PROTECTION, EXTERNAL SUPPLIERS, EXTERNAL TARIFF, EXTERNAL TARIFF STRUCTURE, EXTERNAL TARIFFS, EXTERNAL TRADE, EXTERNAL TRADE BARRIERS, EXTERNAL TRADE LIBERALIZATION, EXTERNAL TRADE POLICIES, EXTERNAL TRADE POLICY, FACTOR ENDOWMENTS, FINAL GOODS, FIRST-MOVER ADVANTAGE, FOREIGN COUNTRIES, FOREIGN DIRECT INVESTMENT, FOREIGN MARKET, FREE ACCESS, FREE TRADE, FREE TRADE AGREEMENT, FREE TRADE AGREEMENTS, FREE TRADE AREA, FREE TRADE AREAS, FREE-TRADE AGREEMENTS, GENERAL EQUILIBRIUM, GENERAL EQUILIBRIUM MODEL, GLOBAL FREE TRADE, GLOBAL LIBERALIZATION, GLOBAL TRADE, GRAVITY EQUATION, GRAVITY MODEL, GRAVITY MODELS, HIGH TARIFFS, HOME MARKET, IMPORTED GOODS, IMPORTED PRODUCTS, IMPORTS, INCREASING TRADE, INDUSTRIALIZATION, INTEREST GROUPS, INTERNATIONAL BANK, INTERNATIONAL COMPETITION, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, INTERNATIONAL TRADE AGREEMENTS, INTERNATIONAL TRADE IN SERVICES, INTERNATIONAL TRADE POLICY, INTERREGIONAL TRADE, INTRAREGIONAL TRADE, INVESTMENT FLOWS, LABOR MARKETS, LABOR STANDARDS, LOBBYING, LOW-TARIFF COUNTRY, MARKET ACCESS, MARKET SEGMENTATION, MARKET SHARE, MARKET SHARES, MARKET STRUCTURE, MEMBER COUNTRIES, MEMBER COUNTRY, MULTILATERAL AGREEMENT, MULTILATERAL AGREEMENTS, MULTILATERAL COOPERATION, MULTILATERAL EFFORTS, MULTILATERAL FREE TRADE, MULTILATERAL LEVEL, MULTILATERAL LIBERALIZATION, MULTILATERAL NEGOTIATIONS, MULTILATERAL SYSTEM, MULTILATERAL TARIFF REDUCTION, MULTILATERAL TARIFFS, MULTILATERAL TRADE, MULTILATERAL TRADE AGREEMENTS, MULTILATERAL TRADE LIBERALIZATION, MULTILATERAL TRADE SYSTEM, MULTILATERALISM, MULTINATIONAL FIRM, NATIONAL MARKETS, NET TRADE CREATION, OPENNESS, POLICY RESEARCH, PREFERENTIAL ACCESS, PREFERENTIAL ARRANGEMENTS, PREFERENTIAL LIBERALIZATION, PREFERENTIAL MARGIN, PREFERENTIAL MARGINS, PREFERENTIAL PARTNERS, PREFERENTIAL RATES, PREFERENTIAL REMOVAL, PREFERENTIAL TARIFF, PREFERENTIAL TARIFF REDUCTION, PREFERENTIAL TARIFFS, PREFERENTIAL TRADE, PREFERENTIAL TRADE AGREEMENT, PREFERENTIAL TRADE AGREEMENTS, PREFERENTIAL TRADING ARRANGEMENTS, PREFERENTIAL TREATMENT, PRODUCTION INEFFICIENCY, PRODUCTIVE USES, PROTECTIONIST, PROTECTIONIST DEVICES, RECIPROCITY, REGIONAL AGREEMENTS, REGIONAL INTEGRATION, REGIONAL TRADE, REGIONAL TRADE AGREEMENT, REGIONAL TRADE AGREEMENTS, REGIONAL TRADE INTEGRATION, REGIONALISM, RULES OF ORIGIN, SOCIAL WELFARE, TARIFF CONCESSIONS, TARIFF EQUIVALENT, TARIFF REVENUE, TECHNICAL BARRIERS, TERMS OF TRADE, TRADE AGREEMENT, TRADE BARRIERS, TRADE BLOC, TRADE BLOCS, TRADE CONCESSIONS, TRADE COSTS, TRADE CREATING, TRADE CREATION, TRADE DATA, TRADE DIVERSION, TRADE EFFECTS, TRADE FLOWS, TRADE IN GOODS, TRADE IN SERVICES, TRADE INTEGRATION, TRADE LIBERALIZATION, TRADE MORE, TRADE OBJECTIVES, TRADE PARTNER, TRADE PARTNERS, TRADE PATTERNS, TRADE POLICIES, TRADE PREFERENCES, TRADE REFORM, TRADE REGIME, TRADE REGIMES, TRADE RESTRICTIONS, TRADE ROUNDS, TRADE SYSTEM, TRADE VOLUME, TRADE VOLUMES, TRADING BLOCS, TRANSPORT COSTS, VOLUME OF TRADE, WAGE RATE, WELFARE GAINS, WELFARE LOSSES, WORLD PRICES, WORLD TRADE, WORLD TRADE ORGANIZATION, WORLD TRADING SYSTEM,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100519101328 https://hdl.handle.net/10986/3799
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