| Summary: | The proliferation of regional trade
agreements is fundamentally altering the world trade
landscape. The number of agreements in force surpasses 200
and has risen eight-fold in two decades. Today as much as 40
percent of global trade takes place among countries that
have some form of reciprocal regional trade agreement.
Global Economic Prospects 2005: Trade, Regionalism, and
Development addresses two questions: 1) What are the
characteristics of agreements that most promote-or
hinder-development for member countries? 2) Does the
proliferation of agreements pose risks to the multilateral
trading system, and if so, how can these risks be managed?
The report argues that agreements leading to open
regionalism-that is, deeper integration of trade as a result
of low external tariffs, increased services competition, and
efforts to reduce cross-border and customs delays costs-are
effective as part of a larger trade strategy to promote
growth. Such regional agreements can complement a strategy
that, on the one hand, includes autonomous liberalization to
promote productivity gains and, on the other hand, leverages
domestic reforms to enhance market access. Although regional
agreements can prove beneficial to member countries, they
can have adverse effects on excluded countries. Lowering of
border barriers around the world is crucial to minimizing
these effects. The completion of the Doha Development Agenda
by all countries in the World Trade Organization will reduce
the risk of trade diversion associated with regional
agreements and will decrease trade losses of countries
excluded from agreements.
|
|---|