IDEAS home Printed from https://ideas.repec.org/a/eee/jjieco/v8y1994i4p388-421.html

The New Regionalism and the Threat of Protectionism

Author

Listed:
  • Hallett Andrew Hughes
  • Braga C. A. Primo

Abstract

Drawing on the game theory concepts, the authors discuss why countries form themselves into trading blocs and what the relations between these blocs are likely to be. They identify three types of regimes: (a) unilateral trade policies - which are noncooperatives; (b) multilateral agreements (such as the GATT) - which are cooperatives; and (c) coalitions (regional integration arrangements or minilateral agreements) - which are mixed (cooperative internally and noncooperatives externally). The authors argue that regional integration arrangements can work better than global rules as precommitment devices for internally cooperative policies because they create a denser network or interlinked policy targets. The losses for a participant ostracized (or disciplined) by his bloc are immediate and tangible. Crucial to the results of analysis is the external policy stance adopted by each bloc after it has formed. External relations will determine whether regional blocs are welfare-improving, consistent with the aims of the GATT, and a vehicle for securing commitments or the regime; or whether theywill become a vehicle for spreading"political economy biases."Should higher or lower external barriers be expected for nonmembers? That depends on how large the benefits or costs, in trade and investment creation (or diversion), would be to members if the mover to free trade within the bloc is not accompanied by any increase in the bloc's external barriers (an"open"bloc). Widening tends to be easier the more open a bloc is, since insiders are less concerned with the erosion of their preferences. In the alternative scenario, lower intra-bloc trade and investment barriers are accompanied by an increase in the external barriers, giving any specific set of potential participants strong incentives to join (a"closed"bloc)."Deepening"by expanding the list of variables covered by the trade agreement also tends to make the bloc more cohesive. In both ca
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Hallett Andrew Hughes & Braga C. A. Primo, 1994. "The New Regionalism and the Threat of Protectionism," Journal of the Japanese and International Economies, Elsevier, vol. 8(4), pages 388-421, December.
    • Handle: RePEc:eee:jjieco:v:8:y:1994:i:4:p:388-421
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0889-1583(84)71022-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lewis, Jeffrey D. & Robinson, Sherman & Wang, Zhi, 1995. "Beyond the Uruguay Round: The implications of an Asian free trade area," China Economic Review, Elsevier, vol. 6(1), pages 35-90.
    2. Joseph M. Perry & Louis A. Woods, 1995. "Cuban Citrus Production in a Post-Transition Economy," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 5.
    3. Bernard Hoekman & Carlos Braga, 1997. "Protection and Trade in Services: A Survey," Open Economies Review, Springer, vol. 8(3), pages 285-308, July.
    4. Lewis, Jeffrey D. & Robinson, Sherman, 1996. "Partners or predators? : the impact of regional trade liberalization on Indonesia," Policy Research Working Paper Series 1626, The World Bank.
    5. Hughes Hallett, Andrew, 2019. "Throwing the baby out with the bathwater: Brexit and the economics of disengaging from a free trade association," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 91-96.
    6. Kohler, Marion, 2002. "Coalition formation in international monetary policy games," Journal of International Economics, Elsevier, vol. 56(2), pages 371-385, March.

    More about this item

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jjieco:v:8:y:1994:i:4:p:388-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622903 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.