DP1739 The Political Economy of EC Regionalism

Author(s): André Sapir

Publication Date: November 1997

Keyword(s): Political Economy , Preferential Trading Arrangement , trade liberalisation

JEL(s): F13 , F15

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP1739.asp

Many observers have noted a recent proliferation of regional trade agreements primarily centred in or on Europe. The paper analyses the causes and consequences of EC regionalism. It begins by examining the development and importance of the phenomenon. It finds that although the EC maintains preferential trade arrangements with virtually all countries, preferential trade accounts for no more than 25% of total EC trade. The paper investigates the causes of EC regionalism, focusing on the determinants of both the demand by third countries and the supply by the EC. Lastly, it examines future options.