Abstract

Regional trade arrangements have recently attracted growing interest, as existing schemes are either being extended or revived and new groupings are being formed. This study reviews recent initiatives and the experience with regional integration in industrial and developing countries and discusses the implications of the recent expansion of the trend for the multilateral trading system.

© 1992 International Monetary Fund

Library of Congress Cataloging-in-Publication Data

Torre, Augusto de la.

Regional trade arrangements / Augusto de la Torre and Margaret Kelly.

p. cm.—(Occasional Paper, ISSN 0251-6365; no. 93) Includes bibliographical references.

ISBN 1-55775-227-3 : $15.00

1. International trade. 2. Commercial treaties. I. Kelly, Margaret R. II. Title. III. Series: Occasional paper (International Monetary Fund) ; no. 93.

HF1379. T67 1992

382′.9—dc20

91-45766

CIP

Price: US$15.00 (US$12.00 to full-time faculty members and students at universities and colleges)

Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201

Contents

  • Preface

  • I. Introduction

  • II. Economic Costs and Benefits of Regional Integration

    • Static Effects on Members

    • Dynamic Effects on Members

    • Effects on Nonmembers

  • III. Recent Initiatives

  • IV. Experience with Regional Integration: Industrial Countries

    • Implementation Record

    • Effects of Arrangements

    • Quantifying Net Gains

  • V. Experience with Regional Integration: Developing Countries

    • Intraregional Trade

    • Implementation Record

    • Factors Influencing Low Implementation

    • Quantifying Net Gains

    • Views on the Role of Regional Integration

  • VI. Implications of Regional Integration for the Multilateral System

    • Aspects of the New Trend

    • Compatibility of Regional Arrangements with the GATT

    • Risks and Limitations of Regionalism

  • Appendix. Membership of Selected Regional Trade Arrangements

  • References

  • Boxes

    • 1. Selected Regional Trade Arrangements in Industrial Countries

    • 2. Selected Regional Trade Arrangements in Developing Countries

    • 3. Southern African Development Coordination Conference (SADCC)

  • Tables

  • III.

    • 1. Regional Trade Arrangements in Europe

    • 2. Regional Trade Arrangements in the Western Hemisphere

    • 3. Regional Trade Arrangements in Africa

    • 4. Regional Trade Arrangements in Asia-Pacific and the Middle East

  • IV.

    • 5. Selected Industrial Country Regional Arrangements: Intraregional Exports

    • 6. Selected Industrial Country Regional Arrangements: Changes in Trade to GDP Ratios

  • V.

    • 7. Selected Regional Trade Arrangements in Developing Countries: Main Objectives

    • 8. Selected Developing Country Regional Arrangements: Intraregional Exports

    • 9. Selected Developing Country Regional Arrangements: Changes in Trade to GDP Ratios

  • Charts

  • IV.

    • 1. Trade Developments in Industrial Country Regional Arrangements

    • 2. Trade Developments in Developing Country Regional Arrangements

The following symbols have been used throughout this paper:

… to indicate that data are not available;

—to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

–between years or months (e.g., 1991–92 or January–June) to indicate the years or months covered, including the beginning and ending years or months;

/ between years (e.g., 1991/92) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice. The term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

Preface

Regional trade arrangements have recently attracted growing interest, as existing schemes are either being extended or revived and new groupings are being formed. This study reviews recent initiatives and the experience with regional integration in industrial and developing countries and discusses the implications of the recent expansion of the trend for the multilateral trading system. Developments up to the end of 1991 have been included, prior to the scheduled conclusion of the Uruguay Round.

The study was prepared by the Trade and Payments Division of the Exchange and Trade Relations Department of the International Monetary Fund. The main authors are Augusto de la Torre and Margaret R. Kelly, with contributions from Bernhard Fritz-Krockow and Miranda Xafa. The authors are indebted to a number of colleagues, both in the Fund and in other national and international agencies, for their willingness to exchange views and provide information. The authors are grateful to Joslin Landell-Mills for her assistance in preparing the Occasional Paper from an earlier longer manuscript; to the editor, David M. Cheney, of the External Relations Department; to Peter Uimonen and Christine Hörbinger for research assistance; and to Marcela Toso and Elizabeth Mack for keyboarding. The authors alone are responsible for the study; their opinions do not necessarily reflect the views of the Fund.