Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade

Richard Baldwin

No 5775, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper addresses the final steps to global free trade – what they might look like, what sort of political economy forces might drive them, and what the WTO might do to guide them. Two facts form the point of departure: 1) Regionalism is here to stay; world trade is regulated by a motley assortment of unilateral, bilateral and multilateral trade agreements; 2) this motley assortment 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 big-3 trade blocs, and leaky since some FTAs create free trade ’canals’ linking the big-3 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.

Keywords: domino effect; juggernaut effect; multilateralism; regionalism; RTB unilateralism; trade (search for similar items in EconPapers)
JEL-codes: F10 F13 F15 F2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int, nep-pol and nep-sea
Date: 2006-08
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Related works:
Working Paper: Multilateralising Regionalism: Sphagetti Bowls as building Blocs on the Path to Global Free Trade (2007)
Working Paper: Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade (2006)
Journal Article: Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade (2006)
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