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The New Regionalism in the Americas: The Case of MERCOSUR

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  • Estevadeordal, Antoni
  • Goto, Junichi
  • Saez, Raul

Abstract

This paper takes seriously the recent claim made by Ethier [1998] that the "New Regionalism" reflects the success of the multilateral trading system, not its failure. In fact, the New Regionalism represents a qualitative departure of the old regionalism in several respects, in particular, its development has taken place in a very different international economic environment. Moreover, the traditional Vinerian paradigm is no longer the primary analytical framework for its evaluation. We use this novel approach to analyze the case of one of the most important experiences in regional integration, the formation of the "Mercado Común del Sur" (MERCOSUR). The paper carefully documents the main stylized facts of the development of MERCOSUR arguing that this makes this type of agreement a prime example of the New Regionalism. Then, using a simple Krugman trade model with tariff distortions we show the positive welfare effects on member and non-member countries of these types of agreements. Our conclusions are consistent with Ethier's paper, that is, regionalism can play a key role in expanding and preserving the liberal trade order.

Suggested Citation

  • Estevadeordal, Antoni & Goto, Junichi & Saez, Raul, 2000. "The New Regionalism in the Americas: The Case of MERCOSUR," IDB Publications (Working Papers) 2643, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:2643
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    References listed on IDEAS

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    1. Caroline L. Freund & John McLaren, 1999. "On the dynamics of trade diversion: evidence from four trade blocs," International Finance Discussion Papers 637, Board of Governors of the Federal Reserve System (U.S.).
    2. Ethier, Wilfred J, 1998. "The New Regionalism," Economic Journal, Royal Economic Society, vol. 108(449), pages 1149-1161, July.
    3. Yeats, Alexander J, 1998. "Does Mercosur's Trade Performance Raise Concerns about the Effects of Regional Trade Arrangements?," The World Bank Economic Review, World Bank, vol. 12(1), pages 1-28, January.
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    Cited by:

    1. Mauricio Bittencourt & Donald Larson & David Kraybill, 2010. "Regional Short-Run Effects Of Trade Liberalization In Brazil," Economic Systems Research, Taylor & Francis Journals, vol. 22(1), pages 65-85.
    2. Volpe Martincus, Christian & Siedschlag, Iulia, 2010. "The Impact of South-South Preferential Trade Agreements on Industrial Development: An Empirical Test," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 69-104.
    3. Iulia Traistaru-Siedschlag & Christian Martincus, 2006. "Economic Integration and Manufacturing Concentration Patterns: Evidence from MERCOSUR," Open Economies Review, Springer, vol. 17(3), pages 297-319, July.
    4. Fernando González Vigil, 2002. "Preferential trade agreements in the western hemisphere," Apuntes. Revista de ciencias sociales, Fondo Editorial, Universidad del Pacífico, vol. 29(51), pages 87-124.
    5. Lambregts, Bart, 2002. "Global city-region ambition in the Netherlands: From Randstad to Deltametropolis," ERSA conference papers ersa02p313, European Regional Science Association.

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