Browsing by Subject "regional integration"

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  • Zhang, Liangying (1999)
    The recently continuing proliferation of regional Preferential Trade Agreements (PTAs) and the glowing trend of emerging tri-bloc (Europe, America, Asia) raise the concern that the regional trade arrangements may challenge the world trading system embodied in the General Agreement on Tariff and Trade (GATT) and World Trade Organisation (WTO). In response to this background, this thesis reviews both the old and new key theoretical contributions on PTAs. The emphasis is put on the new one, which addresses the direct effect of regional arrangement on multilateral process. Basic international trade theory and policy, terminology and background are provided at the beginning to facilitate reading. While the paper does not attempt to put normative judgement on PTAs, it does call for more effort on multilateral process in the conclusion. Among the old literature, this paper reviews the classical work of Viner. Viner had a doubt on the welfare improvement Customs Union by raising the concept of trade diversion and trade creation. His model implies that unambiguous gain can only be obtained when the partner countries are the sole source of import even in the initial equilibrium. Among the recent literature, this paper reviews the analyses from the viewpoint of 'new political economy' which view trade policy as being determined by lobbying of the concentrated interest groups. Two models, Grossman-Helpman's and Krishna's, are introduced. Grossman-Helpman's small union model, which takes a specific factor model with n+1 goods in a political economy framework, addresses the incentive for the government to conclude a Free Trade Area, and reaches conclusion that free trade agreement could more likely be reached when it affords enhanced protection. Krishna's Cournot oligopoly model uses a similar framework of Grossman and Helpman's, however examines further the direction relation between the regional arrangement and multilateral process besides the incentive, and concludes the trade-diversion incentive and harmful effect of regional trade agreement on multilateral trade liberalisation.
  • Kähkönen, Mikko (2000)
    The objective of this study is to analyse the effects of an enlargement of a common market on economic growth and incomes. The analytical framework is developed by Uwe Walz (1998). The underlying growth model draws on the work of Grossman and Helpman (1991). Growth is explained with continuous developing of new differentiated intermediate inputs in an R&D sector. The use of these intermediates yields economies of scale and further, productivity gains in final goods production. The countries' specialisation patterns are determined together with the mentioned scale economies and agglomeration advantages and disadvantages arising from transport costs. The new country to the common market is considered to be technologically lagging compared to the initial countries. The differences in technology are of such magnitude that the entrant cannot take part in the R&D activity at all. The study of the enlargement is divided into two sequences: liberalisation of trade and liberalisation of migration. The result of removing the barriers to trade is faster economic growth and income convergence between the initial common market countries. The enhanced welfare is observed as better wages in the new member state. The specialisation patterns become less drastic, with the reallocation of resources leading to the innovating activity being more evenly distributed. In the case of labour mobilisation, faster growth is achieved with qualifications. The migration of unskilled workers to the initial common market countries slows down growth. The immigration of skilled workers in turn leads to faster growth if and only if it was used relatively less intensively in the new member country prior to the enlargement. In this case wages converge. The starting point of the study consists of the following papers: Grossman, G. M. & Helpman, E. (1991): Innovation and Growth in the Global Economy. The MIT Press, Cambridge, Ma. USA. Walz, U. (1998): Does an Enlargement of a Common Market Stimulate Growth and Convergence? Journal of International Economics 45, 297-321. Walz, U. (1996): Transport costs, Intermediate Goods, and Localized Growth. Regional science and Urban Economics 26, 671-695.
  • Talka, Santeri (Helsingin yliopisto, 2018)
    Regional integration in Central Asia (CA) has seen very limited success, despite strong cultural and historical connections and shared grievances. I attempt to identify factors that promote or inhibit intensification of regional cooperation. I use a political economy approach to identify foundational factors, stakeholders and political phenomena that influence deepening regional cooperation. I analyse the formal institutional integration initiatives through realist and constructivist IR theories. I also bind the case study of Central Asia to a broader theoretical debate on the relationship between regionalism and multilateralism in 21st century. The relationship between intraregional dynamics (comprising the CA states) and interregional dynamics (comprising external sponsors or partners contributing to regionalism) is complex, and partially characterized by conflict of interests. CA states lack incentives to promote regional institutions and identities, but are willing to exploit regionalism opportunistically. I analyse CA policy principally through the framework of political elites, emphasizing nationalism and state sovereignty. Simultaneously, CA elites have used open regionalism to meet goals in globalist foreign policy and nationalistic domestic policy. On the other hand, external hegemons perceive strong incentives to promote regionalism under their own leadership. I analyse the external sponsors mostly through a neorealist framework of hegemonic influence. Despite these conflicts, there are some specific areas of shared interests, particularly fighting non- traditional security threats. Use of regional integration initiatives in CA can be perceived as not incompatible with greater multilateralism, even contributing to the integration of the region to a global system on its own terms. Based on this case study, I argue for a complex, non- categorical understanding of regionalism and multilateralism. I argue that new regionalism, and open regionalism in particular, have been used in CA for promoting specifically globalist policy agendas. This conclusion supports the premise that regionalism and multilateralism exist in a dynamic relationship, influencing each other in a mutually supportive manner. Rather than understanding regionalism as a “stumbling block” or temporary “building block”, it should be perceived as a permanent part of the contemporary global system.