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Is Regionalism an Increasing Feature of the World Economy?

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  • Richard Pomfret

Abstract

Measuring the importance of regionalism in international trade is desirable but difficult. The number of regional trade agreements (RTAs) reported to the WTO or the proportion of world trade which is between countries in a RTA are frequently cited as evidence that regionalism is growing at an accelerating rate. This paper questions whether RTAs really are as important as the headline numbers suggest, or whether they just occupy an excessively large part of policymakers' and economic journalists' time. The main contributions are to analyse the number of RTAs and the share of world trade criteria in order to show why both are meaningless measures of the extent of regionalism in the current world economy. The impact of RTAs on world trade is difficult to assess because some of the most important RTAs go beyond trade to deep integration measures, while a large number of RTAs are either not implemented or have very limited coverage. The tendency towards extreme outcomes (ie. economic union or negligible economic effects) explains why, despite the apparent proliferation of RTAs, regionalism has not posed a serious challenge to the world economy as the multilateral trading system has over the last sixty years gone from strength to strength.

Suggested Citation

  • Richard Pomfret, 2006. "Is Regionalism an Increasing Feature of the World Economy?," The Institute for International Integration Studies Discussion Paper Series iiisdp164, IIIS.
  • Handle: RePEc:iis:dispap:iiisdp164 Note: Length:
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    References listed on IDEAS

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    1. Pomfret, Richard, 1985. "Discrimination in International Trade: Extent, Motivation and Implications - La discriminazione nell’ambito del commercio internazionale: estensione, motivi e implicazioni," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 38(1), pages 49-65.
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    5. Patrick Messerlin, 2005. "The Directive on Services: Rent Seekers Strike Back," Post-Print hal-01020771, HAL.
    6. Richard Pomfret, 2005. "Regional Trade Agreements," International Trade 0511002, EconWPA.
    7. Richard Pomfret, 1986. "The Trade-Diverting Bias of Preferential Trading Arrangements," Journal of Common Market Studies, Wiley Blackwell, vol. 25(2), pages 109-117, December.
    8. Schiff, Maurice & Winters, L Alan, 1998. "Dynamics and Politics in Regional Integration Arrangements: An Introduction," World Bank Economic Review, World Bank Group, vol. 12(2), pages 177-195, May.
    9. Pomfret, Richard, 2005. "Sequencing trade and monetary integration: issues and application to Asia," Journal of Asian Economics, Elsevier, vol. 16(1), pages 105-124, February.
    10. Baysan, Tercan & Panagariya, Arvind & Pitigala, Nihal, 2006. "Preferential trading in South Asia," Policy Research Working Paper Series 3813, The World Bank.
    11. Tubagus Feridhanusetyawan, 2005. "Preferential Trade Agreements in the Asia-Pacific Region," IMF Working Papers 05/149, International Monetary Fund.
    12. Dennis, Allen, 2006. "The impact of regional trade agreements and trade facilitation in the Middle East and North Africa region," Policy Research Working Paper Series 3837, The World Bank.
    13. repec:spo:wpecon:info:hdl:2441/8131 is not listed on IDEAS
    14. Crawford, Jo-Ann & Fiorentino, Roberto V., 2005. "The changing landscape of regional trade agreements," WTO Discussion Papers 8, World Trade Organization (WTO), Economic Research and Statistics Division.
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    Citations

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    Cited by:

    1. Sylvanus Kwaku Afesorgbor & Kaleb Girma Abreha, 2015. "Preferential Market Access, Foreign Aid and Economic Development," Economics Working Papers 2015-04, Department of Economics and Business Economics, Aarhus University.
    2. Pomfret, Richard & Sourdin, Patricia, 2009. "Have Asian trade agreements reduced trade costs?," Journal of Asian Economics, Elsevier, vol. 20(3), pages 255-268, May.
    3. Patrick Georges, 2009. "Dispensing with NAFTA Rules of Origin? Some Policy Options for Canada," Working Papers 0904E, University of Ottawa, Department of Economics.
    4. 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.
    5. Bernhard Herz & Marco Wagner, 2010. "Multilateralism versus Regionalism!?," DEGIT Conference Papers c015_043, DEGIT, Dynamics, Economic Growth, and International Trade.
    6. Jason H. Grant, 2013. "Is the growth of regionalism as significant as the headlines suggest? Lessons from agricultural trade," Agricultural Economics, International Association of Agricultural Economists, vol. 44(1), pages 93-109, January.
    7. Richard Pomfret, 2011. "Regional Integration in East Asia," Chapters,in: International Handbook on the Economics of Integration, Volume I, chapter 16 Edward Elgar Publishing.
    8. Rachel McCulloch, 2010. "The International Trading System and Its Future," Working Papers 08, Brandeis University, Department of Economics and International Businesss School.
    9. Tristan Kohl, 2014. "Do we really know that trade agreements increase trade?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 443-469, August.
    10. Adlung, Rudolf & Molinuevo, Martin, 2008. "Bilateralism in services trade: is there fire behind the (BIT-)smoke?," WTO Staff Working Papers ERSD-2008-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    11. Koopmann, Georg & Vogel, Lars, 2011. "Globalisierung, Regionalisierung und die Handelspolitik der Europäischen Union," HWWI Policy Papers 58, Hamburg Institute of International Economics (HWWI).
    12. Herz Bernhard & Wagner Marco, 2011. "Regionalism as a Building Block for Multilateralism," Global Economy Journal, De Gruyter, vol. 11(1), pages 1-25, March.
    13. Richard Pomfret, 2009. "Regionalism in the Asia-Pacific Region: How Wide, How Deep?," School of Economics Working Papers 2009-31, University of Adelaide, School of Economics.

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