In This Review

Regional Integration and Development
Regional Integration and Development
By Maurice Schiff and L. Alan Winters
Oxford University Press for the World Bank, 2003, 322 pp

Discriminatory trade arrangements have proliferated in recent years. Emulating earlier actions by the European Community, the United States has negotiated free trade deals with Canada, Chile, Israel, Jordan, Mexico, and Singapore and has begun discussions with a number of other countries. Many developing countries have formed "regional integration agreements" (RIAs) among themselves. Not to be left out, East Asian states, heretofore committed to a multilateral, nondiscriminatory trade regime, are now actively exploring free trade areas. Is this development desirable for participants or outsiders? Does it represent movement, admittedly piecemeal and fragmented, toward more liberal world trade? In this book, two World Bank economists take a comprehensive look at rias involving developing countries, and they do not like what they find. In practice, rias rarely live up to the claims made in their favor and are more likely to divert trade than create it. But since the trend is unlikely to be reversed, the authors wisely provide guidelines, based on their findings, on how to improve rias.