Regulations confronting trade in
An important debate in the study of international political economy is over the issue of multilateralism versus regionalism and, in particular, whether regional trading arrangements (RTAs) work as a building block or a stumbling block to multilateralism. 1 The debate (Lawrence, 1995, among others) revolves around the issue of whether regionalism serves as an alternative to multilateralism, as a useful supplement to multilateralism, or as a means of accelerating the multilateral process. Much of this debate has focused on the goods market and the accompanying welfare effects of regionalism on the global trading structure. In particular it has used the Vinerian approach (see Viner, 1950) of calculating whether RTAs are trade creating or trade diverting in determining whether RTAs are beneficial or detrimental to the multilateral trading system. This emphasis on goods has resulted in a tariff-based examination of the multilateralism versus regionalism debate.
In contrast to the wealth of literature focusing on the goods aspect of this debate, very little attention has been paid to whether RTAs serve as a building block or a stumbling block to the elimination of regulatory barriers to trade. These regulatory barriers are especially prominent in the services market, which by many calculations amounts to 20 per cent of global trade. The negotiation of the General Agreement on Trade in Services (GATS) resulted in the emergence of a multilateral regime