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CRA Economia Aula01 Apresentacao02

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21 views35 pages

CRA Economia Aula01 Apresentacao02

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Alexandre Xavier
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Economia Internacional

Prof. Marcelo Zorovich


Aula 01
Curso Avançado
Regional Trade Agreements
Overview
• DefiniDons
– Regionalism, RTAs, PTAs, etc
• TheoreDcal PerspecDves on Regionalism
• Regionalism and the MulDlateral Trading
System
• Examples of Regionalism
Regionalism

• Refers to the “negoDaDon and construcDon


of interstate or intergovernmental
agreements or regimes, involving specific
and conscious policy decisions by
governments to coordinate economic and
poliDcal acDviDes within a region” (Hurrell,
1995)
Regionalism
• Regionalism = Regional inter-state
cooperaDon ! special case of
internaDonal or global cooperaDon

• Different Sectors/Areas
– Security/PoliDcal
– Economic ! ‘PreferenDal Trade
Agreements’
– Environmental Issues
arrangement

Free-trade area

Customs union

Economic union
Common market
Preferential trading

Reduction of intra-
group tariffs

Removal of intra-
group tariffs

Common external
tariff

Intra-group capital
and labor mobility
Levels of Economic IntegraDon

Common economic
policies and
common currency
FTAs and GATT

• ArDcle XXIV of GATT allows FTAs and


CUs to exist as long as:

– Trade barriers a_er integraDon do not rise on average

– Agreements eliminate all tariffs and other trade restricDons


on “substanDally all” intra-regional exchange of goods
within a “reasonable” length of Dme

– They are noDfied to the GATT which may decide to establish


a Working Party to determine if these condiDons are
saDsfied
Regional Trade Agreements

• The last two decades have witnessed a


proliferaDon of RTAs

– According to the WTO, 379 RTAs in force as


of July 2013

– 575 noDficaDons
Economic Effects

• Welfare effects unclear ! depends on trade


diversion and trade creaDon effects

– Trade crea.on is the increase in intra-regional


trade from shi_ing resources from inefficient
domesDc suppliers to more efficient producers in
the region.

– Trade diversion is the increase in intra-regional


trade from shi_ing resources from efficient
external producers to inefficient producers in the
region.
Regionalism and MulDlateralism

• PTAs are incompaDble with the WTO


principle of non-discriminaDon

• Scholars disagree on the extent to


which these arrangements are in fact
compaDble or not with the objecDves
of the GATT and WTO (mulDlateral
trade liberalizaDon)
Regionalism and MulDlateralism

• Are RTAs building or stumbling blocs to


mulDlateral trade liberalizaDon?

Building Blocs: Stumbling Blocs:


•Less actors ! easier to negotiate!faster •Three large blocs !inward- looking
and protectionists
•RTAs tend to go further than tariff
reduction • Discriminatory !against WTO goals

•“Open”, and hence compatible with •Proliferation of NTBs


multilateralism
•Slower than multilateralism and
Hence ! Threatens to erode support for
Multilateralism
Spaghej Bowl Effect

“The world trading system is


characterized by a chaoDc criss-crossing
of preferences, with a plethora of
different trade barriers applying to
products depending on which countries
they operate from” (BhagwaD, 2005).
UNASUR

ALBA
IPE & RTAs

• Three main issues:

– What are the consequences for the


internaDonal trading system?

– What accounts for the resurgence of


regionalism in the 1980s and 1990s?

– How new is the new regionalism?


Regionalism (Economic IntegraDon)
Old Regionalism
Among DCs
(LAFTA, CARICOM,

1960s 1990s

European Post- Cold War


Integration “New” Regionalism
(MERCOSUR, NAFTA,
ASEAN, NEPAD)
Old vs. New Regionalism
The Old Regionalism The New Regionalism
Influenced by a CW logic and often Post-CW logic, and often developing
imposed from outside by the from within the region
superpowers
Introverted and protectionist Extroverted, linked with globalization

Specific and narrow objectives Comprehensive and multidimensional


objectives (e.g. economics, politics,
security, etc)
Exclusive in terms of membership Inclusive and open

European phenomenon, modeled on Worldwide and heterogeneous


the European Communities phenomenon
State-centric and state-dominated Involves state, market and civil society
actors
Regionalism in TheoreDcal PerspecDve

The
Integration Mainstream
“New Regionalism”
Theory IR Approaches
(Neorealism, Neoliberal Approach
(Neofunctionalism, (Constructivism,
Institutionalism, etc.)
Intergovernmentalism) Post-Positivist Theories)

European Integration Post-Cold War


Late 1950s- 1970s Regionalism
Mainstream Approaches

1) Systemic Theories
• Neorealism
• InsDtuDonalism
• ConstrucDvism

2) DomesDc Level Approaches


• StaDst
• Societal (interest groups)
• CoaliDonal
InsDtuDonalist ExplanaDons

• Emphasis on the func.ons that


regimes perform for states

• Regional insDtuDons as a joint


aqempt by states to manage the
problems generated by increased
interdependence (e.g. NAFTA)
Realist ExplanaDons

(1) External Balancing Arguments ! Regional


blocs formed as a response to external, or
extra-regional, threats or challenges.

(2) Regionalism and Hegemony ! Does the


presence of regional hegemon facilitate or
hinder regional cooperaDon?
Talvez para segurança
ConstrucDvist ExplanaDons

1) Regional CooperaDon facilitated by shared


culture
– CogniDve frameworks of regional elites

2) Regional cooperaDon leads to ‘shared


iden=ty’ which leads to self-sustaining
integraDon
– Emergence of regional iden.ty/ sense of
community
DomesDc-Level

(1) Sta=st Arguments: Regional


cooperaDon driven by the preferences
and goals of governments

(2) Interest Group Explana=ons: driven


by the preferences of business groups

(3) Coali=onal Explana=ons


Baldwin’s Domino Theory
• PoliDcal economy explanaDon ! starts from
assumpDon that tariffs reflect balance of
supply and demand for protecDon
– Reciprocal trade talks re-aligns pe forces inside each
parDcipaDng naDon
– MTN turn exporters into anD-protecDonist forces

• FormaDon of RTA re-aligns poliDcal economy


forces in non-members (due to discriminaDon)
! pressures for joining or creaDng new RTA
• If new member joins exisDng RTA, forces for
inclusion get stronger in non-member naDons
! Domino
21st Century Regionalism
• Baldwin: 21st C trade ! Trade-Investment-Service Nexus !
intertwining of:

(1) Trade in goods

(2) InternaDonal investment in producDon faciliDes, training,


technology and long-term business relaDonships

(3) Use of infrastructure services – telecoms, internet, express


parcel delivery, air cargo, trade-related finance, etc.-- to
coordinate the dispersed producDon process

• As a result of these changes ! Demands for deeper


integraDon rules
21st Century Regionalism
• Dds for deeper integraDon rules to
overcome “21st C trade barriers”
– Behind the border barriers ! new
internaDonal risks and threats to property
risks, as firms begin doing business
abroad

– Cross-border barriers ! obstacles to


flows of goods, people, ideas, and
investment that are required to
coordinate internaDonal producDon
faciliDes
21st Century Regionalism
• IncenDves to remove these 21st C
barriers ! source of demand for more
complex trade disciplines
• WTO otherwise occupied, so this
demand was filled by
– Deeper RTAs
– BITs
– Unilateral reforms
21st Century Regionalism

• Four deeper disciplines that appear in 1/3


RTAs (but not in WTO)
– CompeDDon policy

– Movement of capital

– Intellectual property rights (beyond TRIPs)

– Investment assurances
21st Century Regionalism
• Requires new analyDcal tools
– Vinerian analysis not so relevant anymore
– New poliDcal economy dynamics
• New bargain “foreign factories in exchange of
domesDc reforms” (instead of exchange of
market access)

– Different type of threat than recognized by


“building-stumbling-bloc” debate
• Deep RTAs may undermine the WTO’s central
place in world trade governance (rule-making
role)

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