IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper

Multilateralising Regionalism: Sphagetti Bowls as building Blocs on the Path to Global Free Trade

  • Richard Baldwin

    ()

This paper addresses the final steps to global free trade -- the political economy forces that might drive them, and the role the WTO might play in guiding them. Two facts form the departure point: 1) Regionalism is here to stay; 2) the motley assortment of regional trade agreements is not the best way to organise world trade. Moving to global duty-free trade will require a multilateralisation of regionalism. The paper presents the political economy logic of trade liberalisation and uses it to structure a narrative of world trade liberalisation since 1947. The logic is then used to project the world tariff map in 2010, arguing that the pattern will be marked by fractals – fuzzy, leaky trade blocs made up of fuzzy, leaky sub-blocs (fuzzy since the proliferation of FTAs makes it impossible to draw sharp lines around the 3 big blocs, and leaky since some FTAs create free trade ’canals’ linking the blocs). The paper then presents a novel political economy mechanism – spaghetti bowls as building blocs – whereby offshoring creates a force that encourages the multilateralisation of regionalism. Finally, the paper suggests three things the WTO could do to help multilateralise regionalism.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=Document15102007200.5717584.pdf&fcategory=Articles&AId=1231&fref=repec
Download Restriction: no

Paper provided by eSocialSciences in its series Working Papers with number id:1231.

as
in new window

Length:
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:ess:wpaper:id:1231
Note: Institutional Papers
Contact details of provider: Web page: http://www.esocialsciences.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Entry and asymmetric lobbying: why governments pick losers," LSE Research Online Documents on Economics 19726, London School of Economics and Political Science, LSE Library.
  2. Winters, L. Alan, 1996. "Regionalism versus multilateralism," Policy Research Working Paper Series 1687, The World Bank.
  3. International Monetary Fund, 1992. "Regional Trade Arrangements," IMF Occasional Papers 93, International Monetary Fund.
  4. Kyoji Fukao & Hikari Ishido & Keiko Ito, 2003. "Vertical Intra-Industry Trade and Foreign Direct Investment in East Asia," Discussion papers 03001, Research Institute of Economy, Trade and Industry (RIETI).
  5. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Protection for Sale Made Easy," CEP Discussion Papers dp0800, Centre for Economic Performance, LSE.
  6. 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.
  7. Kyle Bagwell & Robert W. Staiger, 1997. "An Economic Theory of GATT," NBER Working Papers 6049, National Bureau of Economic Research, Inc.
  8. Ethier, Wilfred, 1996. "Regionalism in a multilateral world," Discussion Papers, Series II 314, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
  9. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  10. Baldwin, Richard, 1997. "The Causes of Regionalism," CEPR Discussion Papers 1599, C.E.P.R. Discussion Papers.
  11. Cadot, Olivier & Estevadeordal, Antoni & Suwa-Eisenmann, Akiko & Verdier, Thierry (ed.), 2006. "The Origin of Goods: Rules of Origin in Regional Trade Agreements," OUP Catalogue, Oxford University Press, number 9780199290482, May.
  12. Robert Staiger, 1994. "A Theory of Gradual Trade Liberalization," International Trade 9410003, EconWPA, revised 21 Oct 1994.
  13. Olivier Cadot & Antoni Estevadeordal & Akiko Suwa-Eisenmann & Thierry Verdier, 2006. "The Origin of Goods: Rules of Origin in Regional Trade Agreements," Post-Print halshs-00754856, HAL.
  14. Richard Baldwin, 1993. "A Domino Theory of Regionalism," NBER Working Papers 4465, National Bureau of Economic Research, Inc.
  15. André Sapir, 2001. "Domino effects in Western European trade, 1960-92," ULB Institutional Repository 2013/8138, ULB -- Universite Libre de Bruxelles.
  16. Patricia Augier & Michael Gasiorek & Charles Lai Tong, 2005. "The impact of rules of origin on trade flows," Economic Policy, CEPR;CES;MSH, vol. 20(43), pages 567-624, 07.
  17. Baldwin, Richard & Forslid, Rikard, 2004. "Trade Liberalization with Heterogenous Firms," CEPR Discussion Papers 4635, C.E.P.R. Discussion Papers.
  18. Daisuke Hiratsuka, 2011. "Production Networks in Asia : A Case Study from the Hard Disk Drive Industry," Microeconomics Working Papers 23235, East Asian Bureau of Economic Research.
  19. Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
  20. repec:fip:fedgsq:y:2004:i:may20 is not listed on IDEAS
  21. Helpman, Elhanan & Antras, Pol & Aghion, Philippe, 2007. "Negotiating Free Trade," Scholarly Articles 3351239, Harvard University Department of Economics.
  22. Ben Zissimos & Ben Lockwood, 2004. "The GATT and Gradualism," Econometric Society 2004 North American Summer Meetings 607, Econometric Society.
  23. James A. Brander & Paul Krugman, 1983. "A 'Reciprocal Dumping' Model of International Trade," NBER Working Papers 1194, National Bureau of Economic Research, Inc.
  24. Gary Clyde Hufbauer & Richard E. Baldwin, 2006. "Shape of a Swiss-US Free Trade Agreement, The," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa76, December.
  25. Gary Clyde Hufbauer & Jeffrey J. Schott, 1994. "Western Hemisphere Economic Integration," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 75.
  26. Barry Eichengreen & Douglas A. Irwin, 1996. "The Role of History in Bilateral Trade Flows," NBER Working Papers 5565, National Bureau of Economic Research, Inc.
  27. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2004. "Dissecting Trade: Firms, Industries, and Export Destinations," American Economic Review, American Economic Association, vol. 94(2), pages 150-154, May.
  28. Mitsuyo Ando & Fukinari Kimura, 2003. "The Formation of International Production and Distribution Networks in East Asia," NBER Working Papers 10167, National Bureau of Economic Research, Inc.
  29. James R. Markusen & James R. Melvin, 1981. "Trade, Factor Prices, and the Gains from Trade with Increasing Returns to Scale," Canadian Journal of Economics, Canadian Economics Association, vol. 14(3), pages 450-69, August.
  30. John McLaren, 2002. "A Theory of Insidious Regionalism," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 571-608.
  31. Anne O. Krueger, 1993. "Free Trade Agreements as Protectionist Devices: Rules of Origin," NBER Working Papers 4352, National Bureau of Economic Research, Inc.
  32. Richard Chisik, 2010. "Gradualism in Free Trade Agreements: A Theoretical Justification," Working Papers 018, Ryerson University, Department of Economics.
  33. Robert E. Baldwin, 2006. "Failure of the WTO Ministerial Conference at Cancun: Reasons and Remedies," The World Economy, Wiley Blackwell, vol. 29(6), pages 677-696, 06.
  34. Magee, Christopher, 2002. "Declining Industries and Persistent Tariff Protection," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 749-62, November.
  35. I. M. Destler, 2005. "American Trade Politics 4th Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3829.
  36. Wilfred J. Ethier, 2001. "Unilateralism in a Multilateral World," Tinbergen Institute Discussion Papers 01-033/2, Tinbergen Institute.
  37. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244 National Bureau of Economic Research, Inc.
  38. Anderson, Kym & Norheim, Hege, 1993. "Is World Trade Becoming More Regionalized?," Review of International Economics, Wiley Blackwell, vol. 1(2), pages 91-109, June.
  39. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, vol. 75(2), pages 329-348, July.
  40. Robert E. Baldwin, 1984. "The Changing Nature of U.S. Trade Policy since World War II," NBER Chapters, in: The Structure and Evolution of Recent U.S. Trade Policy, pages 5-32 National Bureau of Economic Research, Inc.
  41. Baldwin, Robert Edward & Baldwin, Richard Edward, 1996. "Alternate approaches to the political economy of endogenous trade liberalization," European Economic Review, Elsevier, vol. 40(3-5), pages 775-782, April.
  42. Matsuyama, Kiminori, 1990. "Perfect Equilibria in a Trade Liberalization Game," American Economic Review, American Economic Association, vol. 80(3), pages 480-92, June.
  43. Sang-Seung, Yi, 1996. "Endogenous formation of customs unions under imperfect competition: open regionalism is good," Journal of International Economics, Elsevier, vol. 41(1-2), pages 153-177, August.
  44. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
  45. Ben S. Bernanke, 2004. "Gradualism," Speech 540, Board of Governors of the Federal Reserve System (U.S.).
  46. Baldwin, Richard, 2000. "Regulatory Protectionism, Developing Nations and a Two-Tier World Trade System," CEPR Discussion Papers 2574, C.E.P.R. Discussion Papers.
  47. Eric W. Bond & Jee-Hyeong Park, 2002. "Gradualism in Trade Agreements with Asymmetric Countries," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 379-406.
  48. Arvind Panagariya, 2003. "The Regionalism Debate: An Overview," International Trade 0309007, EconWPA.
  49. Markusen, James R., 1981. "Trade and the gains from trade with imperfect competition," Journal of International Economics, Elsevier, vol. 11(4), pages 531-551, November.
  50. S. Lael Brainard & Thierry Verdier, 1993. "The Political Economy of Declining Industries: Senescent Industry Collapse Revisited," NBER Working Papers 4606, National Bureau of Economic Research, Inc.
  51. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  52. Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
  53. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
  54. Baldwin, Richard, 1987. "Politically realistic objective functions and trade policy PROFs and tariffs," Economics Letters, Elsevier, vol. 24(3), pages 287-290.
  55. John Whalley, 1998. "Why Do Countries Seek Regional Trade Agreements?," NBER Chapters, in: The Regionalization of the World Economy, pages 63-90 National Bureau of Economic Research, Inc.
  56. John H. Jackson, 1997. "The World Trading System, 2nd Edition: Law and Policy of International Economic Relations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262600277, June.
  57. Ng, Francis & Yeats, Alexander, 2003. "Major trade trends in East Asia : what are their implications for regional cooperation and growth," Policy Research Working Paper Series 3084, The World Bank.
  58. Kimura, Fukunari & Ando, Mitsuyo, 2003. "Fragmentation and agglomeration matter: Japanese multinationals in Latin America and East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 14(3), pages 287-317, December.
  59. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  60. Kyle Bagwell & Robert W. Staiger, 2004. "The Economics of the World Trading System," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524341, June.
  61. repec:idb:brikps:9179 is not listed on IDEAS
  62. Caroline Freund, 2000. "Different Paths to Free Trade: The Gains from Regionalism," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1317-1341.
  63. Bond, Eric W. & Syropoulos, Constantinos, 1996. "The size of trading blocs Market power and world welfare effects," Journal of International Economics, Elsevier, vol. 40(3-4), pages 411-437, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:1231. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Padma Prakash)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.