Integration of Markets vs. Integration by Agreements
This paper provides an analysis of the two channels of regional integration: integration via markets and integration via agreements. Given that East Asia and Latin America are two fertile regions where both forms of integrations have taken place, t...
| Main Authors: | , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/03/9051389/integration-markets-vs-integration-agreements http://hdl.handle.net/10986/6562 |
| Summary: | This paper provides an analysis of the
two channels of regional integration: integration via
markets and integration via agreements. Given that East Asia
and Latin America are two fertile regions where both forms
of integrations have taken place, the authors examine the
experiences of these two areas. There are four related
results. First, East Asia had been integrating via markets
long before formal agreements were in vogue in the region.
Latin America, by contrast, has primarily used formal
regional trade treaties as the main channel of integration.
Second, despite the relative lack of formal regional trade
treaties until recently, East Asia is more integrated among
itself than Latin America. Third, from a purely economic and
trade standpoint, the proper sequence of integrations seems
to be first integrating via markets and subsequently via
formal regional trade agreements. Fourth, regional trade
agreements often serve multiple constituents. The reason why
integrating via markets first can be helpful is because this
can give stronger political bargaining power to the
outward-looking economic-oriented forces within the country. |
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