The New Regionalism and Policy Interdependence

Leonardo Baccini () and Andreas Dür ()
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Leonardo Baccini: IMT Lucca
Andreas Dür: University of Salzburg

No 2010-8, Working Papers in Economics from University of Salzburg

Abstract: Since 1990 the number of preferential trade agreements has increased rapidly. Our argument explains this phenomenon, known as the new regionalism, as a result of competition for market access. Exporters that face trade diversion because of their exclusion from a preferential trade agreement concluded by foreign countries push their governments into signing an agreement with the country in which their exports are threatened. We test our argument in a quantitative analysis of the proliferation of preferential trade agreements among 167 countries between 1990 and 2007. The finding that competition for market access is a major driving force of the new regionalism is a contribution to the literature on regionalism and to broader debates about global economic regulation.

Pages: 45 pages
Date: 2010-04-22
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