Regional trade agreements
AbstractThis paper reviews the theoretical and the empirical literature on regionalism. The formation of regional trade agreements has been, by far, the most popular form of reciprocal trade liberalization in the last fifteen 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 have 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.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 28697.
Length: 62 pages
Date of creation: 2009
Date of revision:
regionalism; trade creation; trade diversion; external tariffs; trade liberalization;
Other versions of this item:
- F15 - International Economics - - Trade - - - Economic Integration
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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