REGIONAL COOPERATION AND ECONOMIC INTEGRATION

REGIONAL TRADE AGREEMENTS AND REGIONAL COOPERATION
Chart 2: Overlapping RTAs structure in the Western Hemisphere –
“Spaghetti bowl effects”
Source: Richard Baldwin, “Multilateralising regionalism: The WTO’s next challenge,”
VoxEU, February 29, 2008.
Creation of market niches and efforts to size the market with the uniqueness of trade marks
in such segments of productions and trade are not really securing longer term market
success whish should provide needed coverage of the associated costs.
With the second effect (need for large markets) which supports creating a number of new
RTAs we have to be observable in the present situation of global financial and economic
recession environment. It could be that era of enthusiastic RTAs creation is approaching
to its end following the present global financial and economic crises impacts. Negative
national economic effects which at list short term accompany creation of a new FTA
potentially threaten present and future process of multilateral and regional (FTA’s) trade
opening. Such sentiments, decisions and potential future developments are evidenced even
in today’s EU practices. As The wall Street Journal reported in March (Forelle, 2009)
that older EU members leaded by German Chancellor rejected plead of a number of new
Eastern Europe EU member countries leaded by Hungary, for a bailout package of up
to 190 billion €. Eastern EU members face decrease in their sails to “old Europe”, and
are troubled by external over indebtedness. They suggest that within EU already some
protectionist developments could be sensed. Old EU members as GB, France or Germany
have little desire to persuade their populations to add East European problems to their own.
Signs of taking care only of own problems, creating threats of evoking protectionism, are
increasing around the glob. If in close future there will be no coordinated political global
scale activity leading to agreements similar to those reached in Bretton Woods in 1944,
the world might easily repeat the behaviour of the years between the two World Wars.
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