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Does membership in a regional preferential trade arrangement make a country more or less protectionist?

  • Foroutan, Faezeh
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    The author explores whether a systematic relationship exists between a developing country's participation in a preferential regional trade agreement (RTA) and the restrictiveness of its trade regime. The motivation for her study is provided by the current debate about whether regional trading blocs are a stepping-stone toward a more liberal global trading system and whether these blocs have changed over time so that the"new"blocs differ meaningfully from the"old"ones in terms of openness to the rest of the world. She restricts analysis to reciprocal RTAs involving developing countries in partnership either with industrial countries (North-South RTAs) or with other developing countries (South-South RTAs). Nearly every developing country belongs to one or more RTAs, so the author develops criteria for distinguishing effective from noneffective regional blocs. She then taps into many sources of data to compare levels of restrictiveness. She finds no evidence that participation in a regional trade agreement necessarily leads to a more liberal important regime.

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    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1898.

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    Date of creation: 31 Mar 1998
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    Handle: RePEc:wbk:wbrwps:1898
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    1. Jeffrey A. Frankel and Shang-Jin Wei., 1996. "ASEAN in a Regional Perspective," Center for International and Development Economics Research (CIDER) Working Papers C96-074, University of California at Berkeley.
    2. Merle Holden, 2005. "Trade Liberalisation In South Africa Once Again," South African Journal of Economics, Economic Society of South Africa, vol. 73(4), pages 776-784, December.
    3. Sven Arndt, 1996. "North American Free Trade: An assessment," Open Economies Review, Springer, vol. 7(1), pages 77-92, January.
    4. Harrison, Glenn W. & Rutherford, Thomas F. & Tarr, David G., 1996. "Economic implications for Turkey of a customs union with the European Union," Policy Research Working Paper Series 1599, The World Bank.
    5. Panagariya, Arvind, 1993. "Should East Asia go regional? No, no and maybe," Policy Research Working Paper Series 1209, The World Bank.
    6. Michelle Casario, 1996. "North American Free Trade Agreement Bilateral Trade Effects," Contemporary Economic Policy, Western Economic Association International, vol. 14(1), pages 36-47, 01.
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