Economic analysis of regional trading arrangements
Date
2003
Authors
Editors
Pomfret, R.
Advisors
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Volume Title
Type:
Book (edited)
Citation
Statement of Responsibility
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Abstract
The Economics of Regional Trading Arrangements provides a unified analysis of policies
which discriminate among trading partners. With the European Union's 1992 programme, the formation
of NAFTA, and attempts to form or strengthen regional trading arrangements in South America,
southern Africa, and Southeast Asia regionalism became a major issue in international commercial
diplomacy during the early 1990s. The proliferation of RTAs was viewed by some as a challenge, and
by others as a complement, to the establishment of the World Trade Organization as the successor to
GATT.
Richard Pomfret analyses the new RTAs, situating them in the broader realm of discriminatory trade
policies for which there is a well-defined body of theory and empirical studies, before asking
whether the new regionalism requires new theoretical analysis. His approach is to combine in
roughly equal proportions history, theory, and a review of empirical studies. This is appropriate
given that the key theoretical result is the welfare ambiguity of discriminatory trade policy
changes. Empirical studies can provide a sense of which of the potentially offsetting effects are
more or less important. Since some effects may take a long time to have their full impact and may
be systemic, it is also useful to observe how RTAs have evolved in practice.
This new-in-paperback edition of The Economics of Regional Trading Arrangements includes a
brand-new Preface in which Pomfret surveys three important developments that occurred during the
second half of the 1990s: the onset of a third wave of regionalism, the reintegration of formerly
centrally planned economies into the global trading system, and theoretical developments, including
the significance of national boundaries. This up-to-date survey will appeal to trade theorists as
well as to anyone involved in policy institutions.