Hostname: page-component-848d4c4894-5nwft Total loading time: 0 Render date: 2024-05-13T09:03:07.285Z Has data issue: false hasContentIssue false
  • English
  • Français

Multilateral Determinants of Regionalism: The Effects of GATT/WTO on the Formation of Preferential Trading Arrangements

Published online by Cambridge University Press:  27 October 2003

Edward D. Mansfield  and
Eric Reinhardt
Get access

Abstract

Preferential trading arrangements (PTAs) have spread widely over the past fifty years. During the same era, multilateral openness has grown to unprecedented heights, spurred by the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). If the cornerstone of the manifestly successful multilateral regime is nondiscrimination, why have its members increasingly resorted to preferential liberalization? We argue that developments at the heart of GATT/WTO encourage its members to form PTAs as devices to obtain bargaining leverage within the multilateral regime. Specifically, the growth in GATT/WTO membership, the periodic multilateral trade negotiation rounds, as well as participation and, especially, losses in formal GATT/WTO disputes, have led its members to seek entrance into PTAs. Conducting the first statistical tests on the subject, we find strong evidence in support of this argument.

Type
Articles
Information
International Organization , Volume 57 , Issue 4 , Fall 2003 , pp. 829 - 862
Copyright
Copyright © The IO Foundation 2003

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Andriamananjara, Soamiely, and Schiff, Maurice. 2001. Regional Cooperation Among Microstates. Review of International Economics 9 (1):42–51.CrossRefGoogle Scholar
Bagwell, Kyle, and Staiger, Robert W.. 2001. Reciprocity, Non-Discrimination, and Preferential Agreements in the Multilateral Trading System. European Journal of Political Economy 17 (2):281–325.CrossRefGoogle Scholar
Baldwin, Richard E. 1997. The Causes of Regionalism. World Economy 20 (7):865–88.CrossRefGoogle Scholar
Barnett, Michael N., and Finnemore, Martha. 1999. The Politics, Power, and Pathologies of International Organizations. International Organization 53 (4):699–732.CrossRefGoogle Scholar
Beck, Nathaniel, Katz, Jonathan N., and Tucker, Richard. 1998. Taking Time Seriously: Time-Series–Cross-Section Analysis with a Binary Dependent Variable. American Journal of Political Science 42 (4):1260–88.CrossRefGoogle Scholar
Bennett, D. Scott Jr and Stam, Allan C. III. 1999. EUGene: Expected Utility Generation and Data Management Program, version 1.18. Pennsylvania State University. Available at ⟨www.eugenesoftware.org⟩.Google Scholar
Bhagwati, Jagdish. 1993. Regionalism and Multilateralism: An Overview. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 22–51. New York: Cambridge University Press.CrossRefGoogle Scholar
Bhagwati, Jagdish, and Panagariya, Arvind. 1996. Preferential Trading Areas and Multilateralis—Strangers, Friends, or Foes? In The Economics of Preferential Trade Agreements, edited by Bhagwati, Jagdish and Panagariya, Arvind, 1–78. Washington, D.C.: AEI Press.Google Scholar
Bowles, Paul. 1997. ASEAN, AFTA and the “New Regionalism.” Pacific Affairs 70 (2):219–33.CrossRefGoogle Scholar
Busch, Marc L., and Reinhardt, Eric. 2002. Testing International Trade Law: Empirical Studies of GATT/WTO Dispute Settlement. In The Political Economy of International Trade Law: Essays in Honor of Robert E. Hudec, edited by Kennedy, Daniel L. M. and Southwick, James D., 457–81. New York: Cambridge University Press.CrossRefGoogle Scholar
Busch, Marc L., and Reinhardt, Eric. 2003. Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement. In Dispute Prevention and Dispute Settlement in the Transatlantic Partnership, edited by Petersmann, Ernst-Ulrich and Pollack, Mark. New York: Oxford University Press.Google Scholar
Correlates of War Project. 1993. Alliances Data. Unpublished manuscript, University of Michigan, Ann Arbor.Google Scholar
Crawford, Jo-Ann, and Laird, Sam. 2001. Regional Trade Agreements and the WTO. North American Journal of Economics and Finance 12 (2):193–211.CrossRefGoogle Scholar
Deardorff, Alan V. 1998. Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World? In The Regionalization of the World Economy, edited by Frankel, Jeffrey A., 7–22. Chicago: University of Chicago Press.Google Scholar
Downs, George W., Rocke, David M., and Barsoom, Peter N.. 1998. Managing the Evolution of Multilateralism. International Organization 52 (2):397–419.CrossRefGoogle Scholar
Dryden, Steve. 1995. Trade Warriors: USTR and the American Crusade for Free Trade. New York: Oxford University Press.Google Scholar
Ethier, Wilfred J. 1998. Regionalism in a Multilateral World. Journal of Political Economy 106 (6):1214–45.CrossRefGoogle Scholar
Ethier, Wilfred J. 1999. Multilateral Roads to Liberalization. In International Trade Policy and the Pacific Rim, edited by Piggott, John and Woodland, Alan, 131–52. New York: St. Martin's.CrossRefGoogle Scholar
Fernández, Raquel, and Portes, Jonathan. 1998. Returns to Regionalism: An Evaluation of Non-traditional Gains from RTAs. World Bank Economic Review 12 (2):197–220.CrossRefGoogle Scholar
Finger, J. Michael, Ingco, Merlinda D., and Reincke, Ulrich. 1996. The Uruguay Round: Statistics on Tariff Concessions Given and Received. Washington, D.C.: World Bank.CrossRefGoogle Scholar
Frankel, Jeffrey A. 1997. Regional Trading Blocs in the World Economic System. Washington, D.C.: Institute for International Economics.Google Scholar
Freund, Caroline L. 2000. Multilateralism and the Endogenous Formation of Preferential Trade Agreements. Journal of International Economics 52 (2):359–76.CrossRefGoogle Scholar
Freund, Caroline L., and McLaren, John. 1999. On the Dynamics of Trade Diversion: Evidence from Four Trade Blocs. International Finance Discussion Paper 637. Washington, D.C.: Board of Governors of the Federal Reserve System.Google Scholar
General Agreement on Tariffs and Trade (GATT). 1990. GATT Activities, 1989: An Annual Review of the Work of the GATT. Geneva: General Agreement on Tariffs and Trade.Google Scholar
General Agreement on Tariffs and Trade (GATT). 1994. Council of Representatives—Held in the Centre William Rappard on December 17, 1993. C/M/268. Geneva: General Agreement on Tariffs and Trade.Google Scholar
Gilpin, Robert. 1987. The Political Economy of International Relations. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Gowa, Joanne. 1994. Allies, Adversaries, and International Trade. Princeton, N.J.: Princeton University Press.Google Scholar
Gowa, Joanne, and Mansfield, Edward D.. 1993. Power Politics and International Trade. American Political Science Review 87 (2):408–20.CrossRefGoogle Scholar
Gurr, Ted Robert, and Jaggers, Keith. 1999. Polity 98: Regime Characteristics, 1800–1998. Center for International Development and Conflict Management. College Park, Md.: University of Maryland. Available at ⟨www.cidcm.umd.edu/inscr/polity/⟩. Accessed 7 July 2003.Google Scholar
Hudec, Robert E. 1993. Enforcing International Trade Law: The Evolution of the Modern GATT Legal System. Salem, N.H.: Butterworth Legal Publishers.Google Scholar
Hudec, Robert E., and Southwick, James D.. 1999. Regionalism and WTO Rules: Problems in the Fine Art of Discriminating Fairly. In Trade Rules in the Making: Challenges in Regional and Multilateral Negotiations, edited by Mendoza, Miguel Rodríguez, Low, Patrick, and Kotschwar, Barbara, 47–80. Washington, D.C.: Organization of American States and Brookings Institution Press.Google Scholar
Inter-American Development Bank (IADB). 2000. Periodic Note on Integration and Trade in the Americas. Washington, D.C.: Inter-American Development Bank.Google Scholar
International Monetary Fund (IMF). 1998a. Direction of Trade Statistics. Washington, D.C.: IMF.Google Scholar
International Monetary Fund (IMF). 1998b. International Financial Statistics. Washington, D.C.: IMF.Google Scholar
Jackson, John H. 1969. World Trade and the Law of GATT. Indianapolis: Bobbs-Merrill.Google Scholar
Jones, Daniel M., Bremer, Stuart A., and Singer, J. David. 1996. Militarized Interstate Disputes, 1816–1992: Rationale, Coding Rules, and Empirical Patterns. Conflict Management and Peace Science 15 (2):163–213.CrossRefGoogle Scholar
Kahler, Miles. 1992. Multilateralism with Small and Large Numbers. International Organization 46 (3):681–708.CrossRefGoogle Scholar
Keohane, Robert O. 1984. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton, N.J.: Princeton University Press.Google Scholar
King, Gary, and Zeng, Langche. 2001. Explaining Rare Events in International Relations. International Organization 55 (3):693–715.CrossRefGoogle Scholar
Koremenos, Barbara, Lipson, Charles, and Snidal, Duncan. 2001. The Rational Design of International Institutions. International Organization 55 (4):761–99.CrossRefGoogle Scholar
Krugman, Paul. 1993. Regionalism Versus Multilateralism: Analytical Notes. In New Dimensions in Regional Integration, edited by de Melo, Jaime and Panagariya, Arvind, 58–79. New York: Cambridge University Press.CrossRefGoogle Scholar
Lai, Brian, and Reiter, Dan. 2000. Democracy, Political Similarity, and International Alliances, 1816–1992. Journal of Conflict Resolution 44 (2):203–27.CrossRefGoogle Scholar
Lawrence, Robert Z. 1996. Regionalism, Multilateralism, and Deeper Integration. Washington, D.C.: Brookings Institution.Google Scholar
Ludema, Rodney D. 1996. On the Value of Preferential Trade Agreements in Multilateral Negotiations. Working Paper 97-22. Washington, D.C.: Georgetown University.Google Scholar
Mansfield, Edward D. 1993. Effects of International Politics on Regionalism in International Trade. In Regional Integration and the Global Trading System, edited by Anderson, Kym and Blackhurst, Richard, 199–217. New York: Harvester Wheatsheaf.Google Scholar
Mansfield, Edward D. 1998. The Proliferation of Preferential Trading Arrangements. Journal of Conflict Resolution 42 (5):523–43.CrossRefGoogle Scholar
Mansfield, Edward D., and Milner, Helen V.. 1999. The New Wave of Regionalism. International Organization 53 (3):589–627.CrossRefGoogle Scholar
Mansfield, Edward D., Milner, Helen V., and Rosendorff, B. Peter. 2002. Why Democracies Cooperate More: Electoral Control and International Trade Agreements. International Organization 56 (3):477–513.CrossRefGoogle Scholar
Martin, Lisa L., and Simmons, Beth A.. 1998. Theories and Empirical Studies of International Institutions. International Organization 52 (4):729–57.CrossRefGoogle Scholar
Mattli, Walter. 1999. The Logic of Regional Integration: Europe and Beyond. New York: Cambridge University Press.CrossRefGoogle Scholar
Mavroidis, Petros C. 2000. Remedies in the WTO Legal System: Between a Rock and a Hard Place. European Journal of International Law 11 (4):763–813.CrossRefGoogle Scholar
McCalman, Phillip. 2002. Multi-Lateral Trade Negotiations and the Most Favored Nation Clause. Journal of International Economics 57 (1):151–76.CrossRefGoogle Scholar
Michalopoulos, Constantine. 1999. The Developing Countries in the WTO. World Economy 22 (1): 117–43.CrossRefGoogle Scholar
Moore, Michael. 2000. WTO's Unique System of Settling Disputes Nears 200 Cases in 2000. PRESS/180. Geneva: World Trade Organization.Google Scholar
Oye, Kenneth A. 1992. Economic Discrimination and Political Exchange: World Political Economy in the 1930s and 1980s. Princeton, N.J.: Princeton University Press.Google Scholar
Özden, Çaglar, and Reinhardt, Eric. 2003. The Perversity of Preferences: GSP and Developing Country Trade Policies, 1976–2000. Working Paper No. 2955. Washington, D.C.: World Bank.Google Scholar
Panagariya, Arvind. 2000. Preferential Trade Liberalization: The Traditional Theory and New Developments. Journal of Economic Literature 38 (2):287–331.CrossRefGoogle Scholar
Perroni, Carlo, and Whalley, John. 2000. The New Regionalism: Trade Liberalization or Insurance? Canadian Journal of Economics 33 (1):1–24.CrossRefGoogle Scholar
Pomfret, Richard. 1997. Unequal Trade: The Economics of Regional Trading Arrangements. New York: Oxford University Press.Google Scholar
Preeg, Ernest H. 1995. Traders in a Brave New World. Chicago: University of Chicago Press.Google Scholar
Reinhardt, Eric. 2001. Adjudication Without Enforcement in GATT Disputes. Journal of Conflict Resolution 45 (2):174–95.CrossRefGoogle Scholar
Reinhardt, Eric. 2002. Tying Hands Without a Rope: Rational Domestic Response to International Institutional Constraints. In Locating the Proper Authorities, edited by Drezner, Daniel, 75–102. Ann Arbor: University of Michigan Press.Google Scholar
Reinhardt, Eric. Forthcoming. Legislative Politics and GATT Trade Disputes, 1948–1994. New York: Cambridge University Press.Google Scholar
Sampson, Gary P. 1996. Compatibility of Regional and Multilateral Trading Agreements: Reforming the WTO Process. American Economic Review (Papers and Proceedings) 86 (2):88–92.Google Scholar
Sapir, André. 2001. Domino Effects in Western European Regional Trade, 1960–1992. European Journal of Political Economy 17 (2):377–88.CrossRefGoogle Scholar
Serra, Jaime, Aguilar, Guillermo, Córdoba, José, Grossman, Gene, Hills, Carla, Jackson, John, Katz, Julius, Noyola, Pedro, and Wilson, Michael. 1997. Reflections on Regionalism: Report of the Study Group on International Trade. Washington, D.C.: Carnegie Endowment for International Peace.Google Scholar
Smith, James McCall. 2000. The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts. International Organization 54 (1):137–80.CrossRefGoogle Scholar
Summers, Robert, and Heston, Alan. 1991. The Penn World Tables (Mark 5): An Expanded Set of International Comparisons, 1950–1988. Quarterly Journal of Economics 106 (2):327–68.CrossRefGoogle Scholar
United States. 2000. Economic Report of the President. Washington, D.C.: Government Printing Office.Google Scholar
Viner, Jacob. 1950. The Customs Union Issue. New York: Carnegie Endowment for International Peace.Google Scholar
Westhoff, Frank H., Yarbrough, Beth V., and Yarbrough, Robert M.. 1994. Preferential Trade Arrangements and the GATT: Can Bilateralism and Multilateralism Coexist? Kyklos 47 (2):179–95.CrossRefGoogle Scholar
Whalley, John. 1998. Why Do Countries Seek Regional Trade Agreements? In The Regionalization of the World Economy, edited by Frankel, Jeffrey A., 63–83. Chicago: University of Chicago Press.Google Scholar
Winters, L. Alan, and Chang, Won. 2000. Regional Integration and Import Prices: An Empirical Investigation. Journal of International Economics 51 (2):363–77.CrossRefGoogle Scholar
World Bank. 2001. World Development Indicators 2001 CD-ROM. Washington, D.C.: World Bank.Google Scholar
World Trade Organization (WTO). 1995a. Regionalism and the World Trading System. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 1995b. Guide to GATT Law and Practice, vol. 2. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 1998. Membership of the World Trade Organization. WT/INF/6/Rev.4. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 1999a. Report (1999) of the Committee on Regional Trade Agreements to the General Council. WT/REG/8. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 1999b. Regional Trade Agreements Notified to the GATT/WTO and in Force in April 1999. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 1999c. Overview of the State-of-Play of WTO Disputes. Geneva: WTO. Available at ⟨www.wto.org/english/tratop_e/dispu_e/stplay_e.doc⟩. Accessed 7 July 2003.Google Scholar
World Trade Organization (WTO). 2001. Negotiating Proposal on Behalf of Members of the Caribbean Community (CARICOM). G/AG/NG/W/100. Geneva: WTO.Google Scholar
Yarbrough, Beth V., and Yarbrough, Robert M.. 1992. Cooperation and Governance in International Trade: The Strategic Organizational Approach. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Yarbrough, Beth V., and Yarbrough, Robert M.. 1997. Dispute Settlement in International Trade: Regionalism and Procedural Coordination. In The Political Economy of Regionalism, edited by Mansfield, Edward D. and Milner, Helen V., 134–63. New York: Columbia University Press.Google Scholar