Ornelas, EmanuelFreund, Caroline2012-03-192012-03-192010-05-01https://hdl.handle.net/10986/3799This paper reviews the theoretical and empirical literature on regionalism. The formation of regional trade agreements has been, by far, the most popular form of reciprocal trade liberalization in the past 15 years. The discriminatory character of these agreements has raised three main concerns: that trade diversion would be rampant, because special interest groups would induce governments to form the most distortionary agreements; that broader external trade liberalization would stall or reverse; and that multilateralism could be undermined. Theoretically, all of these concerns are legitimate, although there are also several theoretical arguments that oppose them. Empirically, neither widespread trade diversion nor stalled external liberalization has materialized, while the undermining of multilateralism has not been properly tested. There are also several aspects of regionalism that have received too little attention from researchers, but which are central to understanding its causes and consequences.CC BY 3.0 IGOAD VALOREMAGGREGATE TRADEANDEAN PACTAPPARELAVERAGE TRADEBARRIERS TO TRADEBILATERAL AGREEMENTBILATERAL AGREEMENTSBILATERAL TARIFFSBILATERAL TRADEBILATERAL TRADE AGREEMENTSBLOC TARIFFSBLOC TRADECAPITAL MARKETSCOMPARATIVE ADVANTAGECONSUMER GAINSCONSUMER PRICESCONSUMER SURPLUSCONSUMPTION POSSIBILITIESCURRENCYCUSTOMSCUSTOMS UNIONCUSTOMS UNION FORMATIONCUSTOMS UNIONSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDOMESTIC FIRMSDOMESTIC INDUSTRYDOMESTIC MARKETDOMESTIC PRODUCERSECONOMIC INTEGRATIONECONOMIC POLICYELASTICITY OF SUBSTITUTIONEQUILIBRIUMEUROPEAN UNIONEXPORT PRICESEXPORT SECTOREXPORTERSEXPORTSEXTERNAL LIBERALIZATIONEXTERNAL PROTECTIONEXTERNAL SUPPLIERSEXTERNAL TARIFFEXTERNAL TARIFF STRUCTUREEXTERNAL TARIFFSEXTERNAL TRADEEXTERNAL TRADE BARRIERSEXTERNAL TRADE LIBERALIZATIONEXTERNAL TRADE POLICIESEXTERNAL TRADE POLICYFACTOR ENDOWMENTSFINAL GOODSFIRST-MOVER ADVANTAGEFOREIGN COUNTRIESFOREIGN DIRECT INVESTMENTFOREIGN MARKETFREE ACCESSFREE TRADEFREE TRADE AGREEMENTFREE TRADE AGREEMENTSFREE TRADE AREAFREE TRADE AREASFREE-TRADE AGREEMENTSGENERAL EQUILIBRIUMGENERAL EQUILIBRIUM MODELGLOBAL FREE TRADEGLOBAL LIBERALIZATIONGLOBAL TRADEGRAVITY EQUATIONGRAVITY MODELGRAVITY MODELSHIGH TARIFFSHOME MARKETIMPORTED GOODSIMPORTED PRODUCTSIMPORTSINCREASING TRADEINDUSTRIALIZATIONINTEREST GROUPSINTERNATIONAL BANKINTERNATIONAL COMPETITIONINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINTERNATIONAL TRADE AGREEMENTSINTERNATIONAL TRADE IN SERVICESINTERNATIONAL TRADE POLICYINTERREGIONAL TRADEINTRAREGIONAL TRADEINVESTMENT FLOWSLABOR MARKETSLABOR STANDARDSLOBBYINGLOW-TARIFF COUNTRYMARKET ACCESSMARKET SEGMENTATIONMARKET SHAREMARKET SHARESMARKET STRUCTUREMEMBER COUNTRIESMEMBER COUNTRYMULTILATERAL AGREEMENTMULTILATERAL AGREEMENTSMULTILATERAL COOPERATIONMULTILATERAL EFFORTSMULTILATERAL FREE TRADEMULTILATERAL LEVELMULTILATERAL LIBERALIZATIONMULTILATERAL NEGOTIATIONSMULTILATERAL SYSTEMMULTILATERAL TARIFF REDUCTIONMULTILATERAL TARIFFSMULTILATERAL TRADEMULTILATERAL TRADE AGREEMENTSMULTILATERAL TRADE LIBERALIZATIONMULTILATERAL TRADE SYSTEMMULTILATERALISMMULTINATIONAL FIRMNATIONAL MARKETSNET TRADE CREATIONOPENNESSPOLICY RESEARCHPREFERENTIAL ACCESSPREFERENTIAL ARRANGEMENTSPREFERENTIAL LIBERALIZATIONPREFERENTIAL MARGINPREFERENTIAL MARGINSPREFERENTIAL PARTNERSPREFERENTIAL RATESPREFERENTIAL REMOVALPREFERENTIAL TARIFFPREFERENTIAL TARIFF REDUCTIONPREFERENTIAL TARIFFSPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTPREFERENTIAL TRADE AGREEMENTSPREFERENTIAL TRADING ARRANGEMENTSPREFERENTIAL TREATMENTPRODUCTION INEFFICIENCYPRODUCTIVE USESPROTECTIONISTPROTECTIONIST DEVICESRECIPROCITYREGIONAL AGREEMENTSREGIONAL INTEGRATIONREGIONAL TRADEREGIONAL TRADE AGREEMENTREGIONAL TRADE AGREEMENTSREGIONAL TRADE INTEGRATIONREGIONALISMRULES OF ORIGINSOCIAL WELFARETARIFF CONCESSIONSTARIFF EQUIVALENTTARIFF REVENUETECHNICAL BARRIERSTERMS OF TRADETRADE AGREEMENTTRADE BARRIERSTRADE BLOCTRADE BLOCSTRADE CONCESSIONSTRADE COSTSTRADE CREATINGTRADE CREATIONTRADE DATATRADE DIVERSIONTRADE EFFECTSTRADE FLOWSTRADE IN GOODSTRADE IN SERVICESTRADE INTEGRATIONTRADE LIBERALIZATIONTRADE MORETRADE OBJECTIVESTRADE PARTNERTRADE PARTNERSTRADE PATTERNSTRADE POLICIESTRADE PREFERENCESTRADE REFORMTRADE REGIMETRADE REGIMESTRADE RESTRICTIONSTRADE ROUNDSTRADE SYSTEMTRADE VOLUMETRADE VOLUMESTRADING BLOCSTRANSPORT COSTSVOLUME OF TRADEWAGE RATEWELFARE GAINSWELFARE LOSSESWORLD PRICESWORLD TRADEWORLD TRADE ORGANIZATIONWORLD TRADING SYSTEMWorld Bankhttps://doi.org/10.1596/1813-9450-5314