Regionalism in International Trade

Abstract

The major influences which have shaped the institutional framework of world trade during the 1960s have been the emergence of two powerful regional trading blocs in Europe. Even the world-wide trading initiative of the Kennedy Round can reasonably be regarded as being, in large measure, a consequence of the regional development in Europe: at any rate it is unlikely that the United States Government would have proposed its scheme for a massive across-the-board tariff cut and got it through Congress in this form without the European Common Market to supply America with a motive. By the late 1960s some 40 per cent of total world exports came from the two regional blocs in Western Europe, E.E.C. and EFTA. If the Soviet trading bloc is added, the total comes to just over 50 per cent. The question that I am going to examine in this paper is whether the regional pattern established in the 1960s is likely to continue during the next decade, and if so how it is likely to affect the structure of international trade.

I am grateful to Professor Sidney Wells, who read and commented on this paper in draft.