ABSTRACT
Regionalism has been defined as ‘the promotion by governments of international economic linkages with countries that are geographically proximate’ (Hine, 1992). Its primary manifestation is the formation of regional free-trade areas, customs unions and common markets, known generically as ‘regional trading blocs’ or ‘regional trading arrangements’. Regionalism can be contrasted with globalism or multilateralism, which seek to increase integration between countries at a worldwide level. Since the latter is one of the aims of the GATT, there exists a potential conflict between the attempts of the GATT/WTO to create a more open, multilateral trading order and the proliferation of regional trading blocs or arrangements. In the past, the potential for conflict was not considered a matter of great concern. Except in Western Europe, most developed countries showed little interest in seeking closer regional linkages. Where free-trade areas or customs unions were formed (for example, the EC and EFTA in the late 1950s), it happened in a manner which had no serious consequences for multilateralism. Indeed, some would say it spurred on the process of global trade liberalisation by compelling other countries (in particular the US) to seek fresh multilateral negotiations. Most of the early regionalist experiments involved developing countries and were largely unsuccessful. Their effects on world trade were at worst marginal.
