Regional trade agreements

Caroline Freund () and Emanuel Ornelas

No 5314, Policy Research Working Paper Series from The World Bank

Abstract: This paper reviews the theoretical and empirical literature on regionalism. The formation of regional trade agreements has been, by far, the most popular form of reciprocal trade liberalization in the past 15 years. The discriminatory character of these agreements has raised three main concerns: that trade diversion would be rampant, because special interest groups would induce governments to form the most distortionary agreements; that broader external trade liberalization would stall or reverse; and that multilateralism could be undermined. Theoretically, all of these concerns are legitimate, although there are also several theoretical arguments that oppose them. Empirically, neither widespread trade diversion nor stalled external liberalization has materialized, while the undermining of multilateralism has not been properly tested. There are also several aspects of regionalism that have received too little attention from researchers, but which are central to understanding its causes and consequences.

Keywords: Free Trade; Trade Law; Trade Policy; Trade and Regional Integration; Economic Theory&Research (search for similar items in EconPapers)
Date: 2010-05-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (164)

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Related works:
Journal Article: Regional Trade Agreements (2010)
Working Paper: Regional Trade Agreements (2009)
Working Paper: Regional trade agreements (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:5314

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