By Mireya Solis, Barbara Stallings, Saori N. Katada
Regardless of considerable scepticism approximately their monetary advantages, loose alternate Agreements (FTAs) have proliferated at a quick speed. coverage diffusion models explain how various units of preferential exchange agreements are interconnected and establish less than what stipulations FTAs can paintings for or opposed to the emergence of coherent nearby blocs.
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Extra resources for Competitive Regionalism: FTA Diffusion in the Pacific Rim (International Political Economy)
3 shows that throughout the postwar period, and certainly during the latest wave of free trade agreements, the vast majority of the new FTAs were “greenfield” agreements established among new sets of countries, rather than representing expansion of the old ones. 3 FTA diffusion: Enlargement versus proliferation (number of FTAs reported to the GATT/WTO by decade) 12 Explaining FTA Proliferation involved rounds of enlargement in the European integration process, whereas elsewhere in the world the dominant trend by far was the negotiation of alternative FTAs.
This contrast suggests that the fears of exclusion as envisaged by policymakers and business people—and not the actual negative effects from alternative trade agreements—are fueling FTA proliferation in the region. 27 28 Exclusion Fears and Competitive Regionalism in East Asia The structure of the chapter is as follows. The second section examines the impacts and determinants of the formation of FTAs mainly from a theoretical aspect. The third section examines empirically the changing patterns of trade and foreign direct investment (FDI) in East Asia by focusing on their intra-regional relationship.
Finally, a striking fact of the recent wave of FTAs is that they only cover a modest volume of trade. As illustrated in tables in the country chapters, only a few FTAs such as NAFTA cover a large proportion of trade for contracting parties. Therefore, standard arguments about the desire to maximize aggregate welfare gains by negotiating with large economic partners as the main motivation for preferential trade agreements cannot account for most FTA agreements in recent years. Instead, we propose to tease out alternative mechanisms to explain FTA proliferation, which include the dissemination of policy paradigms through cross-country policy networks or the multiplier effect of strategic interaction among states and interest groups as they maneuver for competitive advantage.