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Returns to Regionalism: An Evaluation of Non-traditional Gains from RTAs

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  • Fernández, Raquel

Abstract

The last decade has witnessed an explosion in the number of regional trade agreements (RTAs). There seems to be a general, if ill-defined, belief on the part of many policy-makers, and among some academics as well, that there is more to an RTA then the traditional gains from trade. This paper examines several possible benefits that RTAs may confer on their partners, including credibility, signalling, bargaining power, insurance, and coordination. It assesses the necessary conditions for each of these candidates to work; gives stylized examples of specific types of policy where it might be applicable; examines real cases where the explanation might be relevant; and discusses their overall plausibility. It concludes by examining NAFTA and the Europe Agreements viewed in this light.

Suggested Citation

  • Fernández, Raquel, 1997. "Returns to Regionalism: An Evaluation of Non-traditional Gains from RTAs," CEPR Discussion Papers 1634, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1634
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    References listed on IDEAS

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    1. Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
    2. Schiff, Maurice & Winters, L Alan, 1998. "Regional Integration as Diplomacy," World Bank Economic Review, World Bank Group, vol. 12(2), pages 271-295, May.
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    5. Giovanni Maggi & Andres Rodriguez-Clare, 1998. "The Value of Trade Agreements in the Presence of Political Pressures," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 574-601, June.
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    Citations

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    Cited by:

    1. Blomström, Magnus & Kokko, Ari, 1997. "Regional Integration and Foreign Direct Investment," CEPR Discussion Papers 1659, C.E.P.R. Discussion Papers.
    2. Sapir, Andre, 1998. "The political economy of EC regionalism," European Economic Review, Elsevier, vol. 42(3-5), pages 717-732, May.
    3. Davide Sala, 2007. "RTAs Formation and Trade Policy," Economics Working Papers ECO2007/59, European University Institute.
    4. Fernandez-Arias, Eduardo & Spiegel, Mark M., 1998. "North-South customs unions and international capital mobility," Journal of International Economics, Elsevier, vol. 46(2), pages 229-251, December.
    5. Martinez-Vazquez, Jorge & Chen, Duanjie, 2001. "The impact of NAFTA and options for tax reform in Mexico," Policy Research Working Paper Series 2669, The World Bank.
    6. Piazolo, Daniel, 1997. "Gaining credibility and enhancing economic growth through regional integration: The case for EU membership of Eastern Europe," Kiel Working Papers 837, Kiel Institute for the World Economy (IfW).
    7. Ayhan Kose & Christopher M Towe & Guy M Meredith, 2004. "How Has Nafta Affected the Mexican Economy? Review and Evidence," IMF Working Papers 04/59, International Monetary Fund.
    8. Guanyi Leu, 2011. "ASEAN’s Preferential Trade Agreements (PTA) Strategy," Journal of Current Southeast Asian Affairs, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 30(2), pages 31-64.
    9. Jorge Martinez-Vazquez & Duanje Chen, 2001. "NAFTA and Mexico's Tax Policy Reform," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0102, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    More about this item

    Keywords

    Credibility; Europe Agreements; NAFTA; Regional Trade Agreements; Signaling;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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