Table of Contents

Handbook of the International Political Economy of Trade

Handbook of the International Political Economy of Trade

Handbooks of Research on International Political Economy series

Edited by David Deese

David A. Deese brings together leading researchers and writers from different countries and disciplines in a coherent framework to highlight the most important and promising research and policy questions regarding international trade. The content includes fundamental theory about trade as international communication and its effects on growth and inequality; the domestic politics of trade and trends in government trade policies; the implications of bilateral and regional trade (and investment) agreements; key issues of how trade is governed globally; and how trade continues to define and advance globalization from immigration to the internet.

Chapter 4: Trade networks, regional agreements and growth

Zining Yang and Mark Abdollahian

Subjects: economics and finance, political economy, politics and public policy, international politics, political economy


Over the course of the last century, trade brought great changes to every corner of the globe, increasing the internationalization of production, distribution and marketing of goods and services as well as promoting economic integration. Like other economic transactions, trade enables parties to gain through exchange with more choices, better quality, lower prices and more competition. Over time, trade has become an increasingly important source of economic growth for many countries. Some argue that, as a nation expands its trading networks, more opportunities, better jobs and economic growth are created at home (Zoellick 2002). For instance, exports accounted for about 25 percent of US economic growth over the course of the 1990s and supported an estimated 12 million jobs (Drezner 2005). By lowering prices through imports and increasing incomes, regional trade agreements (RTAs), such as NAFTA, and multilateral trade frameworks, such as the Uruguay Round agreements, have benefited the average American family of four by $1300 to $2000 each year (Langerfels and Nieberling 2005). In addition to local and individual effects, trade serves as a global economic health indicator. Many also define globalization simply as openness to foreign trade and long-term capital flows (Bardhan 2004). Thus, the prospects of increased trade opportunities strengthen foreign direct investment and confidence in financial markets, priming the global economy.

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