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Returns to Regionalism: An Evaluation of Non-Traditional Gains from RTAs

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  • Raquel Fernandez

Abstract

The last decade has witnessed an explosion in the number of regional trade agreements (RTAs). There seems to be a general if ill-defined belief on the part of many policy-makers, and among a number of academics as well, that there is more to a RTA than the traditional gains from trade. This paper examines several possible benefits that RTAs may confer to their partners, including credibility, signaling, bargaining power, insurance, and coordination. It assesses the necessary conditions for each of these candidates to work; gives stylized examples of specific types of policy where it might be applicable; examines real cases where the explanation might be relevant; and discusses their overall plausibility. It concludes by examining NAFTA and the Europe Agreements viewed in this light.

Suggested Citation

  • Raquel Fernandez, 1997. "Returns to Regionalism: An Evaluation of Non-Traditional Gains from RTAs," NBER Working Papers 5970, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5970
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    Cited by:

    1. Martinez-Vazquez, Jorge & Chen, Duanjie, 2001. "The impact of NAFTA and options for tax reform in Mexico," Policy Research Working Paper Series 2669, The World Bank.
    2. M. Ayhan Kose & Guy M. Meredith & Christopher M. Towe, 2005. "How Has NAFTA Affected the Mexican Economy? Review and Evidence," Springer Books, in: Rolf J. Langhammer & Lúcio Vinhas Souza (ed.), Monetary Policy and Macroeconomic Stabilization in Latin America, pages 35-81, Springer.
    3. Blomström, Magnus & Kokko, Ari, 1997. "Regional Integration and Foreign Direct Investment," CEPR Discussion Papers 1659, C.E.P.R. Discussion Papers.
    4. Jean‐Marc Malambwe Kilolo, 2021. "Country asymmetry, trade agreements, and transfers," Economics and Politics, Wiley Blackwell, vol. 33(1), pages 37-51, March.
    5. Fernandez-Arias, Eduardo & Spiegel, Mark M., 1998. "North-South customs unions and international capital mobility," Journal of International Economics, Elsevier, vol. 46(2), pages 229-251, December.
    6. Sapir, Andre, 1998. "The political economy of EC regionalism," European Economic Review, Elsevier, vol. 42(3-5), pages 717-732, May.
    7. Sadequl ISLAM, 2011. "The Economic Effects On Nafta Of Trans-Atlantic Free Trade Agreements," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    8. Islam, Sadequl, 2010. "The Economic Effects of Trans-Atlantic Free Trade Agreements," Conference papers 330247, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Davide Sala, 2007. "RTAs Formation and Trade Policy," Economics Working Papers ECO2007/59, European University Institute.
    10. Piazolo, Daniel, 1997. "Gaining credibility and enhancing economic growth through regional integration: The case for EU membership of Eastern Europe," Kiel Working Papers 837, Kiel Institute for the World Economy (IfW Kiel).
    11. Guanyi Leu, 2011. "ASEAN’s Preferential Trade Agreements (PTA) Strategy," Journal of Current Southeast Asian Affairs, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 30(2), pages 31-64.
    12. Ugur, Mehmet, 2008. "Economic implications of Turkish EU membership: the advantages of tying one's hands," Greenwich Papers in Political Economy 3984, University of Greenwich, Greenwich Political Economy Research Centre.
    13. Amita Batra, 2010. "Asian Economic Integration and Sub-regionalism," International Studies, , vol. 47(1), pages 1-25, January.
    14. Jorge Martinez-Vazquez & Duanje Chen, 2001. "NAFTA and Mexico's Tax Policy Reform," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0102, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    15. Jahangir Khan Achakzai, 2010. "Unilateral Liberalization versus Regional Integration: The Case of ECO Member Countries," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(1), pages 27-44, Jan-Jun.

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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