REGIONALISM - AN OVERVIEW

Regional trading arrangements are proliferating. This overview conside rs some of their implications. Section I reviews the paradigm of tradi tional trade theory which emphasizes the ''second best'' nature of the se arrangements. It also evaluates the conditions under which they are permitted by the GATT. Section II notes that these arrangements incre asingly move beyond simply removing internal border barriers toward de eper forms of integration involving common behind-the-border policies and systems of governance. Taking account of these aspects of the arra ngements requires a different analytic paradigm, which evaluates these arrangements as an alternative to national governance rather than sim ply as a means of liberalizing trade. Section III considers existing a nd emerging regional arrangements in Europe, North America, and Asia i n light of these paradigms. J. Japan. Int. Econ., Dec. 1994, 8(4), pp. 365-387. John F. Kennedy School of Government, Harvard University, an d National Bureau of Economic Research, Cambridge, Massachusetts; and Brookings Institution, Washington, DC. (C) 1994 Academic Press, Inc.