DOES REGIONAL-INTEGRATION PROMOTE GLOBAL LIBERALIZATION - A CASE OF ENDOGENOUS PROTECTION

This paper examines the effects of regional integration upon global li beralization of an industry, when protection is endogenous due to a po litical commitment to the establishment of the industry. It identifies positive incentive effects of regional economic integration upon indu stry and analyzes how these effects are modified by whether economic i ntegration is accompanied by political integration and by whether its arrangement is free trade agreement or customs union. It shows that re gional economic integration promotes global liberalization, with the p ossible exception of a customs union not accompanied by political inte gration. (C) 1994 Academic Press, Inc.