Integration of Markets vs. Integration by Agreements

This paper provides an analysis of the two channels of regional integration: integration via markets and integration via agreements. Given that East Asia and Latin America are two fertile regions where both forms of integrations have taken place, the authors examine the experiences of these two areas. There are four related results. First, East Asia had been integrating via markets long before formal agreements were in vogue in the region. Latin America, by contrast, has primarily used formal regional trade treaties as the main channel of integration. Second, despite the relative lack of formal regional trade treaties until recently, East Asia is more integrated among itself than Latin America. Third, from a purely economic and trade standpoint, the proper sequence of integrations seems to be first integrating via markets and subsequently via formal regional trade agreements. Fourth, regional trade agreements often serve multiple constituents. The reason why integrating via markets first can be helpful is because this can give stronger political bargaining power to the outward-looking economic-oriented forces within the country.

Bibliographic Details

Main Authors:	Aminian, Nathalie, Fung, K.C., Ng, Francis
Language:	English
Published:	World Bank, Washington, DC 2008-03
Subjects:	ANDEAN PACT, ANTI-TRADE, ARBITRATOR, BARGAINING POWER, BARRIERS TO TRADE, BILATERAL AGREEMENTS, BILATERAL TRADE, BILATERAL TRADE AGREEMENT, BILATERAL TRADE AGREEMENTS, BILATERAL TREATIES, BOND, BOND MARKET, BOND MARKETS, CENTRAL AMERICA, CENTRAL AMERICAN, CENTRAL BANK, COMMON MARKET, COMPARATIVE ADVANTAGE, COMPARATIVE DISADVANTAGE, CONTRACTING PARTIES, COOPERATION AGREEMENTS, CURRENCY, CUSTOMS, CUSTOMS PROCEDURES, CUSTOMS UNION, DEREGULATION, DEVALUATIONS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DISPUTE SETTLEMENT, DYNAMIC EFFECTS, E-COMMERCE, ECONOMIC AGREEMENTS, ECONOMIC COMMUNITY, ECONOMIC COOPERATION, ECONOMIC CRISES, ECONOMIC CRISIS, ECONOMIC DEVELOPMENTS, ECONOMIC GROWTH, ECONOMIC INTEGRATION, ECONOMIC INTEGRATIONS, ECONOMIC LIBERALIZATION, ECONOMIC PARTNERSHIP AGREEMENT, ECONOMIC POLICY, ECONOMIC REGIONALISM, ECONOMIC STABILIZATION, EQUILIBRIUM, EUROPEAN UNION, EXPORT MARKET, EXPORT PERFORMANCE, EXPORT VALUE, EXPORTERS, EXPORTING COUNTRY, EXPORTS, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL INTEGRATION, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, FOREIGN POLICY, FOREIGN TRADE, FOREIGN TRADE POLICY, FORMAL TRADE, FREE TRADE, FREE TRADE AGREEMENT, FREE TRADE AGREEMENTS, FREE TRADE AREA, FREE TRADE AREAS, FREE TRADE ARRANGEMENT, FREE TRADE ASSOCIATION, GLOBAL ECONOMY, GLOBAL TRADING, GLOBALIZATION, HARMONIZATION, HOME COUNTRY, IMPORT SUBSTITUTION, IMPORT SUBSTITUTION INDUSTRIALIZATION, IMPORTS, INCREASING TRADE, INDUSTRIAL COUNTRY, INDUSTRIAL POLICY, INTERNATIONAL BANK, INTERNATIONAL ECONOMICS, INTERNATIONAL INSTITUTIONS, INTERNATIONAL MARKET, INTERNATIONAL MARKETS, INTERNATIONAL ORGANIZATIONS, INTERNATIONAL TRADE, INTERNATIONAL TRADE RELATIONS, INTRA-REGIONAL TRADE, INTRAREGIONAL TRADE, INVESTMENT AGREEMENTS, INVESTMENT LIBERALIZATION, INVESTMENT POLICY, LATIN AMERICAN, LEGAL INSTRUMENTS, LEGAL TERMS, LEGAL TREATIES, LIBERALIZATION OF TRADE, LOBBYING, MARKET ACCESS, MARKET CONDITIONS, MARKET DEVELOPMENT, MARKET INTEGRATION, MEMBER COUNTRIES, MONETARY UNION, MOST FAVORED NATION, MULTILATERAL AGREEMENTS, MULTILATERAL RULES, MULTILATERAL SYSTEM, MULTILATERAL TRADE, MULTILATERAL TRADE LIBERALIZATION, MULTILATERAL TRADE NEGOTIATIONS, MULTILATERALISM, MUTUAL RECOGNITION, OPEN REGIONALISM, OPEN TRADE, OPENNESS, PACIFIC REGION, PARTNER COUNTRIES, POLICY MAKERS, POLICY REFORMS, POLICY RESEARCH, POLITICAL ECONOMY, PREFERENTIAL TRADE, PREFERENTIAL TRADE AGREEMENTS, PRIVATE SECTOR, PRIVATIZATION, PROTECTIONIST, RAPID GROWTH, REGIONAL AGREEMENT, REGIONAL AGREEMENTS, REGIONAL ARRANGEMENTS, REGIONAL COOPERATION, REGIONAL COORDINATION, REGIONAL GROUPING, REGIONAL GROUPINGS, REGIONAL INITIATIVES, REGIONAL INTEGRATION, REGIONAL INTEGRATIONS, REGIONAL TRADE, REGIONAL TRADE AGREEMENT, REGIONAL TRADE AGREEMENTS, REGIONAL TRADE ARRANGEMENTS, REGIONAL TRADE INTEGRATION, REGIONAL TRADING PARTNERS, REGIONALISM, REGIONALIZATION, REPUTATION, SECURITY INTERESTS, SMALL COUNTRY, SOUTH AMERICA, TECHNICAL COOPERATION, TECHNICAL STANDARDS, TRADE BALANCE, TRADE BARRIERS, TRADE BLOCS, TRADE CREATION, TRADE DISPUTE, TRADE DIVERSION, TRADE FACILITATION, TRADE IN GOODS, TRADE IN SERVICES, TRADE INTEGRATION, TRADE INTENSITY, TRADE INTENSITY INDICES, TRADE LAWS, TRADE LIBERALIZATION, TRADE LIBERALIZATIONS, TRADE LINKS, TRADE NEGOTIATIONS, TRADE POLICIES, TRADE POLICY, TRADE POLICY FORMULATION, TRADE POLICY REVIEW, TRADE RELATIONS, TRADE RELATIONSHIP, TRADE RELATIONSHIPS, TRADE STRATEGY, TRADE TREATIES, TRADE VOLUME, TRADING BLOCS, TRADING PARTNERS, TRANSPORT EQUIPMENT, TREATIES, TRINIDAD AND TOBAGO, UNILATERAL TRADE, UNILATERAL TRADE LIBERALIZATION, UNION CUSTOMS, VERTICAL SPECIALIZATION, WORLD ECONOMY, WORLD EXPORTS, WORLD OUTPUT, WORLD TRADE, WORLD TRADE ORGANIZATION, WORLD TRADING SYSTEM,
Online Access:	http://documents.worldbank.org/curated/en/2008/03/9051389/integration-markets-vs-integration-agreements https://hdl.handle.net/10986/6562
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