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Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade

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  • Richard E. Baldwin

Abstract

This paper addresses the final steps to global free trade - what they might look like, what sort of political economy forces might drive them, and what the WTO might do to help. Two facts form the point of departure: (1) Regionalism is here to stay; world trade is regulated by a motley assortment of unilateral, bilateral and multilateral trade agreements; (2) this motley assortment is not the best way to organise world trade. Moving to global duty-free trade will require a multilateralisation of regionalism. This paper presents the political economy logic of trade liberalisation and uses it to structure a narrative of world trade liberalisation since 1947. The logic is then used to project the world tariff map in 2010, arguing that the pattern will be marked by fractals - fuzzy, leaky trade blocs made up of fuzzy, leaky sub-blocs (fuzzy since the proliferation of FTAs makes it impossible to draw sharp lines around the Big-3 trade blocs, and leaky since some FTAs create free trade 'canals' linking the Big-3 blocs). The paper then presents a novel political economy mechanism - spaghetti bowls as building blocs - whereby offshoring creates a force that encourages the multilateralisation of regionalism. Finally, the paper suggests three things the WTO might do to help multilateralise regionalism. Copyright 2006 The Author Journal compilation 2006 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 29 (2006)
Issue (Month): 11 (November)
Pages: 1451-1518
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Handle: RePEc:bla:worlde:v:29:y:2006:i:11:p:1451-1518

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Blog mentions

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  1. Preferential trade and economic efficiency
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  1. Kimura, Fukunari & Obashi, Ayako, 2011. "Production Networks in East Asia: What We Know So Far," ADBI Working Papers 320, Asian Development Bank Institute.
  2. Monika Mrazova & David Vines & Ben Zissimos, 2008. "Is the WTO's Article XXIV Bad?," Economics Series Working Papers 417, University of Oxford, Department of Economics.
  3. Matthew Shearer & Kati Suominen & Antoni Estevadeordal, 2009. "Multilateralising RTAs in the Americas: State of Play and Ways Forward," IDB Publications 9300, Inter-American Development Bank.
  4. Jeremy Harris & Brian Rankin Staples, 2009. "Origin and Beyond: Trade Facilitation Disaster or Trade Facility Opportunity?," IDB Publications 9326, Inter-American Development Bank.
  5. Fritz Breuss, 2007. "A Prototype Model of EU's 2007 Enlargement," FIW Working Paper series 007, FIW.
  6. Harun Onder, 2009. "Starting Small in Free Trade Agreements," Working Papers 0905, Florida International University, Department of Economics.
  7. Richard Lipsey & Murray Smith, 2010. "Multilateral Versus Regional Trading Arrangements: Substitutes Or Compliments?," Discussion Papers dp10-03, Department of Economics, Simon Fraser University.
  8. Leslie Wehner, 2009. "Power, Governance, and Ideas in Chile’s Free Trade Agreement Policy," GIGA Working Paper Series 102, GIGA German Institute of Global and Area Studies.
  9. Bezuidenhout, Henri & Naude, Wim, 2008. "Foreign Direct Investment and Trade in the Southern African Development Community," Working Papers RP2008/88, World Institute for Development Economic Research (UNU-WIDER).
  10. Mikic, Mia, 2007. "Preferential trade agreements and agricultural trade liberalization in Asia and the Pacific," MPRA Paper 2947, University Library of Munich, Germany.
  11. Masahiro Kawai & Peter A. Petri, 2010. "Asia’s Role in the Global Financial Architecture," Working Papers id:2958, eSocialSciences.
  12. Mia Mikic, 2007. "Trends in preferential trade liberalization in Asia and the Pacific," STUDIES IN TRADE AND INVESTMENT, in: Studies in Trade and Investment - AGRICULTURAL TRADE - PLANTING THE SEEDS OF REGIONAL LIBERALIZATION IN ASIA, volume 60, pages 1-32 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
  13. Innwon Park & Soonchan Park, 2011. "Best practices for regional trade agreements," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(2), pages 249-268, June.
  14. Silvia Nenci & Pierluigi Montalbano, 2011. "Trade patterns and trade clusters: China, India, Brazil and South Africa in the global trading," Departmental Working Papers of Economics - University 'Roma Tre' 0125, Department of Economics - University Roma Tre.
  15. Rifflart, Christine & Schweisguth, Danielle, 2008. "Value-Added Trade and Regionalization. GTAP Eleventh Annual Conference "Future of Global Economy", Helsinki, Finland," Open Access publications from Sciences Po info:hdl:2441/9541, Sciences Po.
  16. Nenci, Silvia, 2008. "The Rise of the Southern Economies: Implications for the WTO-Multilateral Trading System," Working Papers RP2008/10, World Institute for Development Economic Research (UNU-WIDER).
  17. Park, Innwon & Park, Soonchan, 2009. "Consolidation and Harmonization of Regional Trade Agreements (RTAs): A Path Toward Global Free Trade," MPRA Paper 14217, University Library of Munich, Germany, revised 23 Mar 2009.
  18. Bensassi, Sami, 2008. "Le développement économique des prestataires logistiques
    [The Economic Development of the 3PL]    ," MPRA Paper 8945, University Library of Munich, Germany.
  19. Toro, Francisco P., 2008. "Agenda Disputes and Strategic Venue Preferences: The Doha Crisis and Europe’s Flight to Regionalism," UNU-MERIT Working Paper Series 048, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.

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