Multilateral Trade Liberalization and Political Disintegration : Implications for the Evolution of Free Trade Aareas and Customs Unions

The author combines two theories - one about how multilateral trade liberalization affects regional integration, the other about how it affects political disintegration - to explain why the ratio of free trade areas to customs unions has increased over time. Ethier argues (1998, 1999) that multilateral trade liberalization led to the recent wave of regional integration arrangements. Alesina and others (1997), in discussing the number and size of countries, argue that multilateral trade liberalization leads to political disintegration, with an increase in the number of countries. Combining the two arguments, the author hypothesizes that as multilateral trade liberalization proceeds, and the number of regional integration arrangements increases, the ratio of free trade areas to customs unions also increases. The data, which show that ratio increasing in the 1990s, are consistent with the hypothesis.

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Bibliographic Details
Main Author: Schiff, Maurice
Language:English
en_US
Published: World Bank, Washington, DC 2000-05
Subjects:ANDEAN PACT, ANTI-MARKET POLICIES, ANTI-TRADE, BLOC WELFARE, CAPITAL GOODS, CENTRAL BANK, CHANNEL, COAL, COMMON MARKET, COMPETITIVENESS, CONSUMERS, CURRENCY, CURRENCY AREA, CUSTOMS, CUSTOMS UNION, CUSTOMS UNION FORMATION, CUSTOMS UNIONS, DECOLONIZATION, DEEP INTEGRATION, DYNAMIC GAINS, EAST AFRICAN COMMUNITY, ECONOMETRIC ANALYSIS, ECONOMIC AGREEMENTS, ECONOMIC COMMUNITY, ECONOMIC DOMINANCE, ECONOMIC INTEGRATION, ECONOMIC LOSS, ECONOMIC THEORIES, EVIDENCE CUSTOMS UNIONS, EXOGENOUS REDUCTION IN TRADE BARRIERS, EXPORTS, EXTERNAL BARRIERS, EXTERNAL TARIFF, EXTERNALITY, FREE MOVEMENT, FREE MOVEMENT OF FACTORS, FREE MOVEMENT OF LABOR, FREE TRADE, FREE TRADE AGREEMENTS, FREE TRADE AREA, FREE TRADE AREAS, GDP, GEOGRAPHIC DISTRIBUTION, GEOGRAPHY, GROWING TRADE, HARMONIZATION, HARMONIZATION OF REGULATIONS, HIGH TARIFFS, HIGH TRADE BARRIERS, IMPORT DUTY, INCOME, INCOME LOSSES, INCOME TRANSFERS, INTEGRATION MEASURES, INTERMEDIATE INPUTS, INTERNATIONAL RIVERS, INTERNATIONAL TRADE, INTERNATIONAL TRADE POLICY, LDCS, MANUFACTURED GOODS, MARKET SIZE, MEMBER COUNTRIES, MONETARY COMMUNITY, MONETARY POLICY, MONETARY UNION, MULTILATERAL LIBERALIZATION, MULTILATERAL LIBERALIZATION EPISODES, MULTILATERAL SYSTEM, MULTILATERAL TRADE, MULTILATERAL TRADE LIBERALIZATION, MULTILATERALISM, NATION-STATES, NATIONAL BODIES, OPEN TRADE, OPEN TRADE REGIME, OPENNESS, PARETO OPTIMUM, PARTNER COUNTRIES, PARTNER COUNTRY, PER CAPITA INCOME, POINT, POLITICAL ECONOMY, POLITICAL INTEGRATION, PREFERENTIAL MARKET ACCESS, PRODUCTION METHODS, PRODUCTION STRUCTURE, PROTECTIONISM, PUBLIC GOODS, PUBLIC POLICIES, RAW MATERIALS, REGIONAL AGREEMENTS, REGIONAL COOPERATION, REGIONAL INTEGRATION, REGIONAL INTEGRATION AGREEMENTS, REGIONAL INTEGRATION ARRANGEMENTS, REGIONAL LEVEL, REGIONALISM, RULES OF ORIGIN, SOUTHERN AFRICA, STRENGTHENING DEMOCRACY, TARIFF BARRIERS, TARIFF EQUILIBRIUM, TARIFF RATES, TARIFF REVENUES, TARIFF SCHEDULE, TARIFF STRUCTURE, TAXATION, TERMS OF TRADE, TRADE BARRIERS, TRADE BLOCS, TRADE DIVERSION, TRADE POLICY, TRADE REGIME, TRADE RESTRICTIONS, TRADING SYSTEM, UNILATERAL REFORMS, UNILATERAL TRADE, UNILATERAL TRADE LIBERALIZATION, WEST, WORLD EXPORTS,
Online Access:http://documents.worldbank.org/curated/en/2000/05/437227/multilateral-trade-liberalization-political-disintegration-implications-evolution-free-trade-areas-customs-unions
https://hdl.handle.net/10986/18851
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