Returns to regionalism : an evaluation of nontraditional gains from regional trade agreements
The past decade has witnessed an explosion in the number of regional trade agreements. There seems to be a general, if ill-defined, belief on the part of many policymakers and academics that there is more to such agreements than the traditional gains from trade (thus the term"new regionalism"). The author examines several possible benefits that regional trade agreements may confer on their partners, including credibility, signaling, bargaining power, insurance, and a mechanism for coordination. She assesses the condtions necessary for each of these benefits, gives stylized examples of policies that might bring about those conditions, and discusses the plausibility of those conditions existing. In this light, she examines the North American Free Trade Agreement (NAFTA) and the European association agreements between the European Union and the countries in Central and Eastern Europe. She concludes that regional trade agreements can serve a useful economic purpose beyond the direct gains from tradeliberalization, by reducing uncertainties and improving credibility, and thus making it easier for the private sector to plan and invest. Indeed, reducing uncertainty may be essential for realizing gains from liberalization. Whether economies benefit from a particular regional trade agreements depends on the scope and coverage of its provisions, the nature of the enforcement mechanism, the circumstances in which the agreement can be amended, and changes in the behavioral incentives for various agents in the economy that result from it. It is important to examine these factors carefully and to evaluate the feasibility of freer trade in their absence when determining the effects of regional trade agreements on world welfare.
|Date of creation:||31 Aug 1997|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
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.:
- Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
- 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.
- Maggi, G & Rodriguez-Clare, A, 1996. "The Value of Trade Agreements in the Presence of Political Pressures," Papers 180, Princeton, Woodrow Wilson School - Public and International Affairs.
- Wilfred J. Ethier, 1998. "Regionalism in a Multilateral World," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1214-1245, December.
- Staiger, Robert W., 1995.
"International rules and institutions for trade policy,"
Handbook of International Economics,
in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 29, pages 1495-1551
- Robert W. Staiger, 1994. "International Rules and Institutions for Trade Policy," NBER Working Papers 4962, National Bureau of Economic Research, Inc.
- Kyle Bagwell & Robert W. Staiger, 1997. "Regionalism and Multilateral Tariff Cooperation," NBER Working Papers 5921, National Bureau of Economic Research, Inc.
- Schiff, Maurice & Winters, L. Alan, 1997.
"Regional Integration as Diplomacy,"
CEPR Discussion Papers
1690, C.E.P.R. Discussion Papers.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
- Carlo Perroni & John Whalley, 2000.
"The new regionalism: trade liberalization or insurance?,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 33(1), pages 1-24, February.
- Carlo Perroni & John Whalley, 1994. "The New Regionalism: Trade Liberalization or Insurance?," NBER Working Papers 4626, National Bureau of Economic Research, Inc.
- 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".
- John Whalley, 1998.
"Why Do Countries Seek Regional Trade Agreements?,"
in: The Regionalization of the World Economy, pages 63-90
National Bureau of Economic Research, Inc.
- Staiger, Robert W & Tabellini, Guido, 1987. "Discretionary Trade Policy and Excessive Protection," American Economic Review, American Economic Association, vol. 77(5), pages 823-37, December.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1816. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.