Trade Blocs

The growth of regional trading blocs. often known as regional integration agreements (RIAs), is one of the major developments in international relations. More than one-third of world trade takes place within such agreements. The last ten years have witnessed qualitative, as well as quantitative changes in regional integration schemes. Three major developments are identified: the recognition that effective integration requires more than reducing tariffs and quotas; a move from "closed regionalism" to a more open model that is more committed to boosting, rather than controlling, international commerce; and the advent of trade blocs in which both high-income industrial countries and developing countries are equal partners. This documents analyzes both the political and the economic benefits of regional trade blocs and the trade-offs faced