The last decade has seen a proliferation of regional preferential trading arrangements, of which the North American Free Trade Agreement is only the best known in the United States. This development represents a major deviation from the global trading arrangements based on the General Agreement on Tariffs and Trade (now World Trade Organization) built up over the past half-century. Do these arrangements contribute to or detract from global trade liberalization, and from global economic welfare? In tackling these complex questions, Frankel, currently a member of the Council of Economic Advisers, employs an impressive and subtle mixture of theoretical reasoning and empirical testing. He constructs a defensible baseline of what free trade among nations would look like and assesses observed trade flows against that baseline. He concludes that on balance regional trading arrangements have been building blocks toward global free trade rather than stumbling blocks in its way. He also makes sensible recommendations to assure that they continue to serve that constructive role.