THE POLITICAL ECONOMY OF REGIONALISM IN WORLD TRADE : IS IT COMPATIBLE WITH MULTILATERALISM?

Regional trading arrangements (RTAs) became popular in the last decade while the trade negotiations of the Uruguay Round continued under the multilateral track of GATT. This Article reopens a discussion that has divided both economists and policy makers as to whether the trend towards "regionalismn in world trade helps to move the process of multilateral trade liberalization forward or leads to more pro tectionist preferential/discriminatory practices, thereby undermining the multilateral approach of GATT. The authors, in this study, assess the fallacious view that equates regional freeing of trade with "free traden itself and advocate a ''public choicen approach arguing that whatever the motivations are for the regionalism, they may, on the other hand, give rise to abuse by domestic interest groups for pro tectionist purposes and therefore endanger the liberalization of the world trading sys tem.