Freund, Caroline and Ornelas, Emanuel (2009) Regional trade agreements. CEP Discussion Paper, No. 961. Centre for Economic Performance, London School of Economics and Political Science, London, UK.
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This paper reviews the theoretical and the empirical literature on regionalism. The formation of regional trade agreements has been, by far, the most popular form of reciprocal trade liberalization in the last fifteen 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 have 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.
|Item Type:||Monograph (Discussion Paper)|
|Additional Information:||© 2009 The authors|
|Uncontrolled Keywords:||regionalism, trade creation, trade diversion, external tariffs, trade liberalization|
|Library of Congress subject classification:||H Social Sciences > HB Economic Theory|
|Journal of Economic Literature Classification System:||F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations
|Sets:||Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
|Identification Number:||No. 961|
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