ABSTRACT
The effect of a trend towards regionalism on global economic welfare is, therefore, ambiguous. Disillusionment with the ability or General Agreement on Tariffs and Trade (GATT) to meet the interests of some countries may have contributed to the growth of regionalism in the second half of the 1980s and 1990s. An added reason given by Baldwin for why the pressure for inclusion among exporters in excluded countries will increase following the establishment of a new regional trade grouping concerns the behaviour of special interest groups. Countries may negotiate trading agreements on a bilateral basis with any of their trading partners, which they choose. Countries could reap these gains themselves simply by getting rid of their import restrictions. An important principle of GATT is that all countries are to treat each other equally. An important area of ambiguity has concerned the rights of countries to give emergency protection to an industry subject to a sudden surge of imports from abroad.
