The Uruguay Round and Beyond
Edited by Ramesh Adhikari and Prema-chandra Athukorala
Chapter 9: The enlargement of ASEAN and its impact on regional integration
Chapter 9 11/2/02 1:17 pm Page 1 9. The enlargement of ASEAN and its impact on regional integration Jayant Menon Regional trading arrangements (RTAs) are currently popular, and have been proliferating. From 34 RTAs in 1992, the number now stands at more than 200. The demand to form or join RTAs on political grounds is strong. As Bhagwati (1997, p. 282) put it: ‘No politician is happy unless he has put his signature on at least one of them.’ Apparently there is also a strong compulsion to avoid being an outsider on economic grounds. As far back as 1964, Mundell demonstrated how trading partners who do not join a preferential trading arrangement might be made worse off through terms of trade effects even when global welfare is enhanced. (This occurs when the preferential arrangement is large enough to affect world prices, and outsiders as a whole are harmed because their terms of trade deteriorate as a result of trade diversion.) Even without terms of trade effects, that is, even if the RTA is small, the fact that an outsider’s competitors may have negotiated preferential access to its major markets suggests that the costs of not joining could be high. Thus the threat of trade and investment diversion is viewed as a compelling reason to seek membership in RTAs. On the supply side, RTA members are usually quite receptive to expanding their membership for both political and economic reasons. Size matters in politics. Political clout in international negotiations is often...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.