The Intricate Geography of Regional Trade Agreements Spaghetti Bowl

Before the mid-1980s, it was clearly a complement. Regionalism consisted of theEuropean trade bloc, the EEC, and a certain number of RTAs among developing nations thatcovered a trivial fraction of world trade with arrangements that rarely operated effectively.This regionalism did nothing to obstruct the regular conclusion of multilateral tariff cutting negotiations conducted by the WTO’s predecessor, the GATT. All this changed in the mid-1980s. Regionalism was re-ignited in North America withthe US–Canada FTA, followed by NAFTA which triggered a domino-like cascade of regionaltrade deals in Latin America. European regionalism, which was reignited by the 1986 SingleEuropean Act and the progressive collapse of the Soviet Union, triggered its own domino effect(Baldwin, 1993). Since then, the number of RTAs has grown at an accelerating pace as the EUand United States have continued to sign agreements and many new players have joined theregionalism game. East Asian regionalism, which had been simmering for decades, was broughtto a boil when China suggested a free trade agreement with ASEAN in 2000. The domino effect this caused is still ongoing. It is logically possible that trade blocs might be obstacles onthe road to global free trade. The evidence, so far, is mixed on this point. A great many tradebarriers have been liberalized by RTAs – in fact over one-third of world trade is conductedinside the world’s best functioning trade blocs (the EU and NAFTA).