ABSTRACT
It is often assumed that regional trading blocs and protectionism go hand in hand. When you encounter regional trading blocs, you should also expect to find increased protectionism. We think this assumption is at the very least highly dubious. Regionalism in trade need not always imply increased protectionism. By focusing on NAFTA within the longer-term context of US trading patterns, we evaluate some of the nascent domestic implications of the ongoing North American experiment. Our conclusion squares with those of others in the sense that the domestic impacts, especially in terms of its potential for trade diversion, have been less than great. Next, we turn to the longer-term empirical relationships among tariff levels, trade regionalization, and trade openness. We find that in the US historical case, these variables are less inter-correlated than is frequently imagined. In general, then, the emerging North American regional trading bloc has not led to a noticeable increase in protectionism or a decrease in trade openness. That need not be the case forever, but, in the interim, we need to reexamine some of our instinctive assumptions about international political economy processes. The unqualified equation of greater trade regionalization and less trade openness does not appear to be particularly valid.
