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

Richard Baldwin

No 12545, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper addresses the final steps to global free trade -- the political economy forces that might drive them, and the role the WTO might play in guiding them. Two facts form the departure point: 1) Regionalism is here to stay; 2) the motley assortment of regional trade agreements 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 3 big blocs, and leaky since some FTAs create free trade ’canals’ linking the 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 multilateralise regionalism.

JEL-codes: F1 F15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int, nep-pol and nep-sea
Date: 2006-10
Note: IFM ITI
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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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