This paper reviews the evolution of thinking about regional trade agreements (RTAs) and the policy developments reflected in three waves of RTAs during the last half century. It rejects claims, based on number of RTAs notified to the WTO, that RTAs are today more prolific than ever. Desirable and undesirable features of RTAs can be identified, but the central message of the theory of second-best about the ambiguity of outcomes remains valid. Describing many RTAs as free trade agreements distorts the meaning of “free trade” and deeper integration in some regions undermines use of the nation state as the central unit of analysis; both make it difficult to determine whether active RTAs are stepping stones or stumbling blocks to improved resource allocation.
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Paper provided by EconWPA in its series International Trade with number
0511002.
Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F15 - International Economics - - Trade - - - Economic Integration F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
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Engel, Charles & Rogers, John H, 1996.
"How Wide Is the Border?,"
American Economic Review,
American Economic Association, vol. 86(5), pages 1112-25, December.
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