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Regionalism and multilateralism: crucial issues in the debate on RTAs

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Notes

  1. 18–19 November 2005.

  2. In a simplified scheme of different stages of advancement in the economic integration perspective, Preferential Trading Areas (PTAs) constitute the most basic option for individual product’s tariff reduction, followed by FTAs, in which internal tariffs are eliminated but each member retains its own independent commercial policies. A Customs Union (CU) is an FTA with a Common External Tariff. Next, a Common Market (CM) builds on a CU such that there are free flows of goods, services, capital, and labor. Finally, an Economic Union (EU) is a CM that embraces greater harmonization of microeconomic and fiscal policies as well as monetary union.

  3. The EU generally grew out of the donor-recipient approach in its relationship with developing Asian countries, at least officially, with its 1994 paper on the “Partnership of Equals with Asia”.

  4. This will also be true in the future, for the simple reason that developed (OECD) countries are either already integrated through preferential trading arrangements (e.g., the EU and the European Economic Area, the United States and Canada) or are unlikely to reach any accords in the near future due to political and political-economy reasons (for example, a “Transatlantic Free Trade Area” and US-Japan free trade area have been proposed at various times but have never been seriously negotiated due to various political-economy problems).

  5. For example, the EEC-EFTA Free Trade Area, created in the 1960 s, included only manufactured goods, in clear violation of the “substantially all goods” principle in Article XXIV. The US-Canada Auto Pact of 1965 was restricted to one (albeit major) industrial sector.

  6. It will be argued that the flexibility allowed by the Enabling Clause has been detrimental to developing countries over the years, as it prompted a “piecemeal,” positive-list approach that had little effect on trade and yet created distortions.

  7. WTO homepage, http://www.wto.org/english/tratop_e/dda_e/dohaexplained_e.htm#regional, cited September 11, 2005.

  8. For example, the most popular, traditional technique is the applied Computational General Equilibrium (CGE) approach, which is mainly (though not always) exclusively tariff- and tariff-equivalent non-tariff-barrier driven and ex ante in nature. However, dynamic features have been included in CGE models and they do incorporate certain ex-post elements, e.g., in calculating potential productivity spillovers. Certain applications of econometric gravity models and “import growth approaches” do include (implicitly) non-tariff/non-border effects (see Kreinin and Plummer 2002). Nevertheless, as these are not structural models, the non-tariff/non-border effects are generally intractable.

  9. See Frankel 1997, from which some of these topics are adopted.

  10. Nor are they at the country-level. While the optimum tariff argument is one of the three classic economic arguments in favour of protection (the others being the infant-industry argument and strategic trade policy), it is well recognized as a theoretical argument. Tariffs are generally implemented for political and political-economy-related reason, not as a means of trying to extract terms of trade gains.

  11. The WTO itself has mentioned institutional capability as an essential factor in managing any trade policies: institutions matter in order to be able to enforce regulations in the respect of competition rules.

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Authors and Affiliations

  1. The University of Bologna in Ravenna, Bologna, Italy

    Roberta Benini

  2. The Johns Hopkins University, SAIS-Bologna center, Bologna, Italy

    Michael G. Plummer

Authors
  1. Roberta Benini
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  2. Michael G. Plummer
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Correspondence to Roberta Benini.

Additional information

The special will be continued in Economic Change and Restructuring, volume 42:1–2 2009.

Appendices

Appendix

See Table 1.

Table 1 Intra-regional trade in selected RTAs by large geographic areas, 1980–2005
Full size table

Abbreviations of the selected RTAs

ACP:

African, Caribbean and Pacific Group of States

ANCOM:

Andean Community

APEC:

Asia-Pacific Economic Cooperation

APTA:

Asia-Pacific Trade Agreement (previous Bangkok Agreement)

ASEAN:

Association of South-East Asia Nations

BSEC:

Black Sea Economic Cooperation

CACM:

Central America Common Market

CARICOM:

Caribbean Community

CEMAC:

Economic and Monetary Community of Central Africa (previous UDEAC)

CEPGL:

Economic Community of the Great Lakes Countries

CIS:

Commonwealth of Independent States

COMESA:

Common Market of Eastern and Southern Africa (previous PTA)

ECO:

Economic Cooperation Organization

ECOWAS:

Economic Community of West African States

EFTA:

European Free Trade Association

ESCAP:

Economic and Social Commission for Asia and the Pacific

FTAA:

Free Trade Area of the Americas

GCC:

Gulf Cooperation Council

LAIA:

Latin America Integration Cooperation

MERCOSUR:

Southern Cone Common Market

NAFTA:

North American Free Trade Agreement

OECS:

Organisation of Eastern Caribbean States

SAARC:

South Asian Association for Regional Cooperation

SADC:

Southern African Development Community

UEMOA:

West African Economic and Monetary Union

UMA:

Arab Maghreb Union

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Benini, R., Plummer, M.G. Regionalism and multilateralism: crucial issues in the debate on RTAs. Econ Change Restruct 41, 267–287 (2008). https://doi.org/10.1007/s10644-008-9068-y

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