INTERNATIONAL TRADE LAWS 
 REGIONAL TRADE INSTITUTIONS

CD13 Syllabus                                                                       Course Structure Index
Professor Michael Hart

Goals
This module examines regional trading arrangements, the laws and agreements which govern such ar­rangements, and their relationship to the international institutions and laws covered in other modules. It will look at the origins and structures of regional trade agreements, their role in gov­erning international trade and investment, the extent to which they complement or undermine the multilateral system, and the reasons governments pursue their trading interests along more than one track. Students who successfully complete this course should be able to identify how and when to deploy re­gional agreements to address specific issues in international trade and investment, the pros and cons of regional approaches to a problem, and the limits of such agreements. Students should also be able to analyze the impact of such agreements on non-members and how non-members can address issues that may arise in relations with members of regional arrangements.

Topics
The module will concentrate on a comparative analysis of four important regional agreements and ar­rangements: the European Union (EU), the North American Free Trade Agreement (NAFTA), the Common Market of the Southern Cone (MERCOSUR), and APEC. Each of these agreements illustrates various characteristics of regionalism. The module will examine their origins, structure of their obliga­tions, their institutional arrangements, and their relationships to each other and to the multilateral system. The module will also provide a cursory overview of the wide range of other regional arrange­ments as a prelude to a discussion of the positive and negative dimensions of regionalism and its possi­ble future evolution.

Grading
During the third week, the class will simulate a WTO Working Party examining a regional integration agreement for conformity with the WTO (GATT article XXIV and GATS article V) – probably the MERCOSUR agreement but the class can agree on another. We will establish teams and roles in the first week for this simulation. Preparation and participation will count for 50 percent. A newspaper article reporting on the working group meeting will count for 30 percent, and general class participation for the final 20 percent.

Week One

 Topics:

•     The interrelationship between regional and multilateral rules and institutions – motives, rules, characteristics , impacts, tensions.

•     The origins of modern regionalism in Europe, and its echo in Africa, Latin America and Australasia – differences in motives, impacts and results.

Required Readings:

1.            Alasdair Smith, “The Principles and Practice of Regional Economic Integration,” in Vincent Cable and David Henderson, eds., Trade Blocs? The Future of Regional Integration (London: Royal Institute of International Affairs, 1994), 17-34.

2.            Frieder Roesler, “The Relationship Between Regional Integration Agreements and the Multilateral Trade Order,” in Kym Anderson and Richard Blackhurst, eds., Regional Integra­tion and the Global Trading System (New York: Harvester Wheatsheaf, 1993), 311-325.

3.            Jagdish Bhagwati and Anne Krueger, The Dangerous Drift to Preferential Trade Agreements (Washington: American Enterprise Institute, 1995).

4.            OECD, Regional Integration and the Multilateral Trading System: Synergy and Divergence (Paris, 1995).

 Suggested Additional Readings:

1.    Michael Hart, Doing the Right Thing – Regional Integration and the Multilateral Trade Regime (Occasional Paper # 39, Centre for Trade Policy and Law, 1996).

2.   Paul Wonnacott and Mark Lutz, “Is There a Case for Free Trade Areas?” in Jeffrey J. Schott,  ed., Free Trade Areas and U.S. Trade Policy (Washington: Institute for International Economics, 1989), 59-95.

3.    Gardner Patterson, “Implications for the GATT and the World Trading System,” in Jeffrey J. Schott,  ed., Free Trade Areas and U.S. Trade Policy (Washington: Institute for International Economics, 1989), 353-373.

4.   Miles Kahler, International Institutions and the Political Economy of Integration (Washington: Brookings, 1994), 80-116.

 Cases and Empirical Material:

•     Students will compare and analyze how similar problems have been addressed in a number of regional agreements, including the Treaty of Rome, the European Free Trade Area, the Single European Act, the North American Free Trade Agreement, and the MERCOSUR agreement.

Week Two

Topics:

•     The full flowering of European regionalism – from the European Coal and Steel Community (1951) through the European Common Market and European Free Trade Area of the 1960s and 1970s to the European Union of the 1990s, including the relationships developed with various European dependencies and neighbours in the Mediterranean, Africa, the Caribbean, and the Pacific.

•     Analysis of the motives,  rules, politics, and institutions of European regionalism.

•     Impact of European regionalism on the multilateral trade regime and other major international traders.

Required Readings:

1.   J.M.C. Rollo, “The EC, European Integration and the World Trading System,” in Vincent Cable and David Henderson, eds., Trade Blocs? The Future of Regional Integration (London: Royal Institute of International Affairs, 1994), 35-58.

2.   Jeffrey Harrop, The Political Economy of Integration in the European Community (2d edition (Aldershot, IUK: Edward Elgar, 1992), 6-84.

or   Ernest Wistrich, After 1992: The United States of Europe, revised edition (London: Routledge, 1991), 1-50, 64-76.

Week Three

Topics:

•     The new regionalism in North America and its echo in Central and South America

•            Origins, motives, characteristics, and impacts of the new regionalism (the Canada-US FTA, the North American FTA, the MERCOSUR, the Andean Pact, the CACM, the CARIBCOM, ANZCER, etc.

·        Simulation exercise

 Required Readings:

1.   Gilbert R. Winham, Trading With Canada: The Canada-U.S. Free Trade Agreement (New York: Twentieth Century Fund, 1988), pamphlet.

2.   Jeffrey J. Schott, NAFTA: An Assessment (Washington: Institute for International Economics, 1992), 1-10, 111-117.

3.   Gary Clyde Hufbauer and Jeffrey J. Schott, Western Hemispheric Economic Integration (Washington: Institute for International Economics, 1994), 97-130.

4.   The Economist, supplement on MERCOSUR, week of October 14, 1996.

Suggested Additional Readings:

1.   Peter Morici, Free Trade in the Americas (New York: Twentieth Century Fund, 1994).

2.            Sydney Weintraub, NAFTA: What Comes Next? (Westport, CT: Praeger for the: Center for Strategic and International Studies, 1994), 14-33.

3.            National Planning Association, “Perspectives on Western Economic Integration,” North American Outlook, vol. 5, no. 4/vol. 6, no. 1 (Winter 1995/6), pamphlet..

4.            Roberto Bouzas, “U.S.-Mercosur Free Trade,” in Sylvia Saborio, ed., The Premise and the Promise: Free Trade in the Americas (Washington: Overseas Development Council, 1992), 249-270.

5.            Gordon Mace, “Consensus-building in the Andean integration system: 1968-1985,” in Andrew Axline, ed., The Political Economy of Regional Integration: Comparative Case Studies (London: Pinter, 1994), 34-71.

6.   --- Payne, “The politics of regional cooperation in the Caribbean: the case of Caricom,” in Andrew Axline, ed., The Political Economy of Regional Integration: Comparative Case Studies (London: Pinter, 1994), 72-104.

Week Four

Topics:

•            regionalism in Asia

•     The future prospects for regionalism within the global economy and the multilateral trade institutions – dynamic and negative dimensions.

 Required Readings:

1.   Pearl Imada et. al., A Free Trade Area: Implications for ASEAN (Singapore: Institute of Southeast Asian Studies, 1991),  pamphlet..

2.   Yoshida et. al., “Regional Economic Integration in East Asia: Special fetures and Policy Implications,” in Vincent Cable and David Henderson, eds., Trade Blocs? The Future of Regional Integration (London: Royal Institute of International Affairs, 1994), 59-108.

3.            Pushpa Thambipillai, “Continuity and change in ASEAN: the politics of regional cooperation in South East Asia,” in Andrew Axline, ed., The Political Economy of Regional Integration: Comparative Case Studies (London: Pinter, 1994), 105-135.

4.            Gregory E. Fry, “International cooperation in the South Pacific: from regional integration to collective diplomacy,” in Andrew Axline, ed., The Political Economy of Regional Integration: Comparative Case Studies (London: Pinter, 1994), 136-177.

Suggested Additional Readings:

1.   David Henderson, “Putting ‘Trade Blocs’ into Perspective,” in Vincent Cable and David Henderson, eds., Trade Blocs? The Future of Regional Integration (London: Royal Institute of International Affairs, 1994), 179-198.

2.   Peter Drysdale and Ross Garnaut, “The Pacific: An Application of a General Theory of Economic Integration,” in Fred Bergsten and Marcus Noland, eds., Pacific Dynamism and the International Economic System (Washington: Institute for International Economics, 1993), pp. 183-223.