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


  • Foroutan, Faezeh


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.

Suggested Citation

  • Foroutan, Faezeh, 1998. "Does membership in a regional preferential trade arrangement make a country more or less protectionist?," Policy Research Working Paper Series 1898, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1898

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    References listed on IDEAS

    1. Frankel, Jeffrey A. & Wei, Shang-Jin, 1996. "ASEAN in a Regional Perspective," Center for International and Development Economics Research (CIDER) Working Papers 233438, University of California-Berkeley, Department of Economics.
    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.
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    4. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2014. "Economic implications for Turkey of a Customs Union with the European Union," World Scientific Book Chapters,in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 16, pages 395-404 World Scientific Publishing Co. Pte. Ltd..
    5. Michelle Casario, 1996. "North American Free Trade Agreement Bilateral Trade Effects," Contemporary Economic Policy, Western Economic Association International, vol. 14(1), pages 36-47, January.
    6. Panagariya, Arvind, 1993. "Should East Asia go regional? No, no and maybe," Policy Research Working Paper Series 1209, The World Bank.
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    Cited by:

    1. Longo, Robert & Sekkat, Khalid, 2004. "Economic Obstacles to Expanding Intra-African Trade," World Development, Elsevier, vol. 32(8), pages 1309-1321, August.
    2. Ornelas, Emanuel, 2008. "Feasible multilateralism and the effects of regionalism," Journal of International Economics, Elsevier, vol. 74(1), pages 202-224, January.
    3. Vincent Vicard, 2009. "On trade creation and regional trade agreements: does depth matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(2), pages 167-187, July.
    4. HM Sandberg & TL Martin, 2001. "Trade Relationships And Economic Development," South African Journal of Economics, Economic Society of South Africa, vol. 69(3), pages 405-435, September.
    5. de Castro Alxandre Samy & Goldin, Ian & Pereira da Silva, Luiz A., 2002. "Relative returns to policy reform - evidence from controlled cross-country regressions," Policy Research Working Paper Series 2898, The World Bank.
    6. Soloaga, Isidro & Alan Wintersb, L., 2001. "Regionalism in the nineties: what effect on trade?," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 1-29, March.
    7. Correa, Paulo & Dayoub, Mariam & Francisco, Manuela, 2007. "Identifying supply-side constraints to export performance in Ecuador : an exercise with Investment Climate Survey data," Policy Research Working Paper Series 4179, The World Bank.
    8. Crescenzo dell'Aquila & Marijke Kuiper, 2003. "Which Road to Liberalization? A first assessment of the EuroMed association agreements," ENARPRI Working Papers 002, ENARPRI (European Network of Agricultural and Rural Policy Research Institutes).
    9. Karacaovali, Baybars & Limão, Nuno, 2008. "The clash of liberalizations: Preferential vs. multilateral trade liberalization in the European Union," Journal of International Economics, Elsevier, vol. 74(2), pages 299-327, March.
    10. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    11. Antoni Estevadeordal & Christian Volpe Martincus & Mitsuyo Ando, 2009. "Complements or Substitutes?: Preferential and Multilateral Trade Liberalization at the Sectoral Level," IDB Publications (Working Papers) 9332, Inter-American Development Bank.
    12. Ornelas, Emanuel, 2005. "Trade creating free trade areas and the undermining of multilateralism," European Economic Review, Elsevier, vol. 49(7), pages 1717-1735, October.
    13. Soloaga, Isidro & Winters, L. Alan, 1999. "How has regionalism in the 1990s affected trade?," Policy Research Working Paper Series 2156, The World Bank.
    14. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    15. Nuno Limao, 2006. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," American Economic Review, American Economic Association, vol. 96(3), pages 896-914, June.


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