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Global Economic Prospects 2005 : Trade, Regionalism and Development

  • World Bank
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    The proliferation of regional trade agreements is fundamentally altering the world trade landscape. The number of agreements in force surpasses 200 and has risen eight-fold in two decades. Today as much as 40 percent of global trade takes place among countries that have some form of reciprocal regional trade agreement. Global Economic Prospects 2005: Trade, Regionalism, and Development addresses two questions: 1) What are the characteristics of agreements that most promote-or hinder-development for member countries? 2) Does the proliferation of agreements pose risks to the multilateral trading system, and if so, how can these risks be managed? The report argues that agreements leading to open regionalism-that is, deeper integration of trade as a result of low external tariffs, increased services competition, and efforts to reduce cross-border and customs delays costs-are effective as part of a larger trade strategy to promote growth. Such regional agreements can complement a strategy that, on the one hand, includes autonomous liberalization to promote productivity gains and, on the other hand, leverages domestic reforms to enhance market access. Although regional agreements can prove beneficial to member countries, they can have adverse effects on excluded countries. Lowering of border barriers around the world is crucial to minimizing these effects. The completion of the Doha Development Agenda by all countries in the World Trade Organization will reduce the risk of trade diversion associated with regional agreements and will decrease trade losses of countries excluded from agreements.

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    This book is provided by The World Bank in its series World Bank Publications with number 14783 and published in 2005.
    Handle: RePEc:wbk:wbpubs:14783
    Contact details of provider: Postal: 1818 H Street, N.W., Washington, DC 20433
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    1. Pravin Krishna, . "Regionalism and Multilaterialism: A Political Economy Approach," Working Papers 96-5, Brown University, Department of Economics.
    2. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2002. "Trade Policy Options for Chile: The Importance of Market Access," World Bank Economic Review, World Bank Group, vol. 16(1), pages 49-79, June.
    3. Konan, Denise Eby & Maskus, Keith E., 2003. "Quantifying the impact of services liberalization in a developing country," Policy Research Working Paper Series 3193, The World Bank.
    4. Baldwin, Richard, 1993. "A Domino Theory of Regionalism," CEPR Discussion Papers 857, C.E.P.R. Discussion Papers.
    5. Aghion, Philippe & Antras, Pol & Helpman, Elhanan, 2007. "Negotiating free trade," Journal of International Economics, Elsevier, vol. 73(1), pages 1-30, September.
    6. Saggi, Kamal & Yildiz, Halis Murat, 2008. "Bilateral trade agreements and the feasibility of multilateral free trade," MPRA Paper 17561, University Library of Munich, Germany, revised 26 Jun 2009.
    7. Levy, Philip I, 1997. "A Political-Economic Analysis of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 87(4), pages 506-19, September.
    8. Mansfield, Edward D. & Reinhardt, Eric, 2003. "Multilateral Determinants of Regionalism: The Effects of GATT/WTO on the Formation of Preferential Trading Arrangements," International Organization, Cambridge University Press, vol. 57(04), pages 829-862, September.
    9. Schiff, Maurice, 1997. "Small is Beautiful: Preferential Trade Agreements and the Impact of Country Size, Market Share, and Smuggling," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 12, pages 359-387.
    10. Bernard Hoekman & Constantine Michalopoulos & L. Alan Winter, 2004. "Special and Differential Treatment of Developing Countries in the WTO: Moving Forward After Canc�n," The World Economy, Wiley Blackwell, vol. 27(4), pages 481-506, 04.
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