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REQUIRED IMAGE
With global trade talks stalled and lower demand from major economies, regional trade agreements are emerging as a way for middle-income countries to increase trade, spur growth, and lower unemployment rates. In a new report, Alejandro Foxley analyzes how three regions—Eastern Europe, Latin America, and East Asia—are increasing trade within their borders and building a broader free trade system.
WASHINGTON, September 16—With global trade talks stalled and lower demand from major economies that were hit hard by the global economic crisis, regional trade agreements are emerging as a way for middle-income countries to increase trade, spur growth, and lower unemployment rates. In a new report, Alejandro Foxley analyzes how three regions—Eastern Europe, Latin America, and East Asia—are increasing trade within their borders and building a broader free trade system.
Using the findings from three vastly different experiences, Foxley says that regional trade agreements work best when participating countries have few political differences, coordinate their monetary and fiscal policies, and embrace globalization. And bottom-up approaches in which companies develop regional supply chains are more effective in improving regional integration than top-down approaches imposed by governments.
Policy Recommendations:
“Pursuing stronger regional trade agreements can help form the building blocks for global free trade deals,” Foxley writes. “Increasing trade will not only help middle-income economies develop but also drive growth around the world as the financial crisis recedes.”
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NOTES
Click here to read the full report.
Alejandro Foxley is a senior associate in the Carnegie International Economics Program. Before joining Carnegie, Foxley was minister of foreign affairs of the Republic of Chile (2006–2009). Between 1998 and 2006, he was a senator of Chile, serving as chairman of the Finance Committee and the Permanent Joint Budget Committee. Previously, he was also Chile’s minister of finance and concurrently served as a governor of the Inter-American Development Bank and the World Bank (1990–1994).
The Carnegie International Economics Program monitors and analyzes short- and long-term trends in the global economy, including macroeconomic developments, trade, commodities, and capital flows, and draws out policy implications. The initial focus of the Program will be the global financial crisis and the policy issues raised. Among other research, the Program will examine the ramifications of the rising weight of developing countries in the global economy.
Press Contact: Kendra Galante, 202-939-2289, pressoffice@ceip.org
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
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