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Lecture 21a - Kyoto treaty; Law of the Sea

Lecture 21a - Kyoto treaty; Law of the Sea - Lecture21...

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Lecture 21 Regional trade agreements concluded I want to ask why some regional arrangements are moving ahead so quickly, and particularly in  Asia.  I would like to suggest three reasons.  First, regionalism apparently moves ahead when globalism is  stalled.  Second, while NAFTA and the EU have achieved their original objectives, AFTA, as originally  conceived, did not, so that AFTA’s real work is still to be done; and of course, the same thing applies to  the newer regional arrangements in Asia.  This work includes creating trade blocs that include the fastest  growing Asian economies.  Third, on the procedural side, regional agreements are in many ways more  flexible and less cumbersome than global agreements, particularly in recent decades. History of the interaction between the GATT/WTO and regional trade agreements.   Both  AFTA and   NAFTA were finalized in 1993.  The European Union originated in the 1950s, but only  completed the evolution to an economic union with the Maastricht Treaty in 1992.  This burst of  regionalism in the 1990s happened simultaneously with the near-collapse of the Uruguay Round of the  GATT, which led countries to seek alterative institutional arrangements, including NAFTA, AFTA, and  the European Union, and MERCOSUR, the Common Market of the South, comprising Argentina, Chile,  Brazil and Uruguay.  Another response was the formation of bilateral trade arrangements, in which free  trade was established between two counties, sometimes in the same region and sometimes not.   Examples  include Australia-New Zealand, Mexico-EU, US-Jordan and literally dozens of others.  Thus, stalemates  at the WTO tend to drive countries into more, wider and deeper regional agreements.   The creation of large trading blocs makes the countries outside the blocs feel nervous about their  exclusion from these large markets.  Their response is either to create blocs of their own or to move  forward in the global trade talks.  Progress at the global level means that tariffs will be lowered on more  and more items in commerce, so that the difference between being inside the regional group and outside  the group becomes less important.   Conversely, does the creation of more, wider and deeper RTAs tend to push the world trade talks  forward?  After all, the formation of NAFTA and AFTA, and the prospect that the world would be  divided up into competing and closed-off trade blocs, finally drove the European Union to help complete  the Uruguay Round of the GATT with the founding of the WTO.  But the same thing has not proved to be 
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