What is the New Regionalism?

Why do countries form regions? How do these affect their members, those excluded, and the international system?In the last decade, new developments in trade and in the institutional structure of international economic relations have brought these questions back on to the international policy and research agenda. The multilateral trading system has been extended to new subjects and strengthened, with the completion of the Uruguay Round of trade negotiations and the implementation of the World Trade Organization (WTO) in January 1995. National governments have changed how they intervene and regulate. Between these, at the regional level: in some regions, the share of intra-regional trade has increased strongly; the number of formal regional organizations has increased at an unprecedented rate, with new groups emerging and old ones reviving; many have shown a commitment to other forms of cooperation in parallel with the extension of the coverage of ‘trade’ seen at the GATT/WTO level; the European Union already acts as a single unit in some cases rather than as a group of members with some common interests, although the members still act separately in other circumstances. Other regional groups are now following its example. The multilateral organizations and non-members of regions are having to adapt to new links among their members and to new counterparts: to a more diverse international structure, with a mix of countries and groups at various stages or degrees of integration.