Wps  189
POLICY RESEARCH WORKING PAPER    189 8
Does Membership  in  a                            It seems participation, a
regional trade agreement
Regional Preferential Trade                       does not necessarly lead cto a
Arrangement Make a                                more liberal import regime.
Country More or Less
Protectionist?
Faezel Forouitan
The World Bank
Development Research Group
International Trade
March 1998



POLICY RESEARCH WORKING PAPER 1898
Summary findings
Foroutan explores whether a systematic relationship             countries (North-South RTAs) or with other developing
exists between a developing country's participation in a        countries (South-South RTAs).
preferential regional trade agreement (RTA) and the               Nearly every developing country belongs to one or
restrictiveness of its trade regime.                            more RTAs, so Foroutan develops criteria for
The motivation for her study is provided by the               distinguishing effective from noneffective regional blocs.
current debate about whether regional trading blocs are a    She then taps into many sources of data to compare
stepping-stone toward a more liberal global trading             levels of restrictiveness.
system and whether these blocs have changed over time             She finds no evidence that participation in a regional
so that the "new" blocs differ meaningfully from the            trade agreement necessarily leads to a more liberal
"old" ones in terms of openness to the rest of the world.       import regime.
She restricts analysis to reciprocal RTAs involving
developing countries in partnership either with industrial
This paper - a product of International Trade, Development Research Group - is part of a larger effort in the group to
study preferential trade issues. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington,
DC 20433. Please contact Lili Tabada, room MC3-333, telephone 202-473-6896, fax 202-522-1159, Internet address
Itabada@worldbank.org. March 1998. (34 pages)
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about
development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The
papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this
paper are entirely those of the authors. They do not necessarily represent the view of the World Bank its Executive Directors, or the
countries they represent.
Produced by the Policy Research Dissemination Center



Does Membership in A Regional Preferential Trade Arrangement
Make a Country More or Less Protectionist?
Faezeh Foroutan
I am grateful to L. Alan Winters patiently reading and painstakingly commenting on every aspect of this
paper. I also wish to express my gratitude to Maurice Schiff for his useful comments on an earlier draft
of the paper. Finally, I wish to thank World Bank's regional chief economists for reading and clearing
the paper.






Foreword
As regional trading arrangements (RTAs) have spread, enlarged and deepened over the last
decade, they have posed challenges to economists on both intellectual and policy levels. On the
former, do RTAs stimulate growth and investment, facilitate technology transfer, shift comparative
advantage towards high value-added activities, provide credibility to reform programs, or induce
political stability and cooperation? Or do they, on the other hand, divert trade in inefficient
directions and undermine the multilateral trading system?
The answer is probably "all of these things, in different proportions according to the
particular circumstances of each RTA." This then poses the policy challenge of how best to
manage RTAs in order to get the best balance of benefits and costs. For example, should technical
standards be harmonized and, if so, how; do direct or indirect taxes need to be equalized; how
should RTAs manage their international trade policies in an outward-looking fashion?
Addressing these issues is one important focus of the international trade research program
of the Development Research Group of the World Bank. It has produced a number of
methodological innovations in the traditional area of trade effects of RTAs and tackled four new
areas of research: the dynamics of regionalism (e.g., convergence, growth, investment, industrial
location and migration), deep integration (standards, tax harmonization), regionalism and the rest of
the world (including its effects on the multilateral trading system), and certain political economy
dimensions of regionalism (e.g., credibility and the use of RTAs as tools of diplomacy).
In addition to thematic work, the program includes a number of studies of specific regional
arrangements, conducted in collaboration with the Regional Vice Presidencies of the Bank. Current
and continuing work includes studies of several EU-Mediterranean Association Agreements, a joint
program with the staff of the Latin American and Caribbean Region entitled "Making the Most of
Mercosur," ASEAN Enlargement, and the Cross Border Initiative in Africa.
Regionalism and Development findings have been and will, in future, be released in a
number of outlets. Recent World Bank Policy Research Working Papers concerning these issues
include:
Glenn Harrison, Tom Rutherford and David Tarr, "Economic Implications for Turkey
of a Customs Union with the European Union," (WPS 1599, May 1996).
Maurice Schiff, "Small is Beautiful, Preferential Trade Agreements and the Impact of
Country Size, Market Share, Efficiency and Trade Policy," (WPS 1668, October 1996).
L. Alan Winters, "Regionalism versus Multilateralism," (WPS 1687, November 1996).
Magnus Blomstrom and Ari Kokko, "How Foreign Investment Affects Host Countries"
(WPS1745, March 1997)



ii
Magnus Blomstr6m and Ari Kokko, "Regional Integration and Foreign Direct
Investment: A Conceptual Framework and Three Cases" (WPS 1750, April 1997)
Eric Bond, "Using Tariff Indices to Evaluate Preferential Trading Arrangements: An
Application to Chile" (WPS 1751, April 1997)
Pier Carlo Padoan, "Technology Accumulation and Diffusion: Is There a Regional
Dimension?" (WPS1781, June 1997)
Won Chang and L. Alan Winters, "Regional Integration and the Prices of Imports: An
Empirical Investigation" (WPS 1782, June 1997)
Glenn Harrison, Thomas Rutherford and David Tarr, "Trade Policy Options for Chile:
A Quantitative Evaluation" (WPS 1783, June 1997)
Anthony Venables and Diego Puga, "Trading Arrangements and Industrial
Development" (WPS 1787, June 1997)
Maurice Schiff and L. Alan Winters, "Regional Integration as Diplomacy"
(WPS 1801, August 1997)
Raquel Fernandez, "Returns to Regionalism: An Evaluation of Nontraditional Gains
from Regional Trade Agreements" (WPS 1816, August 1997)
Sherry Stephenson, "Standards, Conformity Assessments and Developing Countries"
(WPS 1826, September 1997)
Valeria De Bonis, "Regional Integration and Conrmodity Tax Harmonization"
(WPS1848, November 1997) and "Regional Integration and Factor Income Taxation"
(WPS 1849, November 1997)
Eric W. Bond, "Transportation Infrastructure Investment and Regional Trade
Liberalization" (WPS 1851, November 1997)
Ferdinand Bakoup and David Tarr, "How Integration into the Central African Economic
and Monetary Community Affects Cameroon's Economy: General Equilibrium
Estimates" (WPS 1872, January 1998)
Other papers on regionalism produced by DECRG include:
Ahmed Galal and Bernard Hoekman (eds), Regional Partners in Global Markets: Limits
and Possibilities of the Euro-Med Initiative. CEPR 1997.



iii
Bernard Hoekman and Simeon Djankov, "Imports of Inputs, Foreign Investment and
Reorientation of East European Trade," World Bank Economic Review (forthcoming)
Bemard Hoekman and Simeon Djankov, "The EU's Mediterranean Free Trade Initiative,"
World Economy
Bernard Hoekman and Simeon Djankov, "Effective Protection in Jordan and Egypt in the
Transition to Free Trade with Europe," World Development.
Bartlomiej Kaminski, "Establishing Economic Foundations for a Viable State of Bosnia and
Hercegovina: Issues and Policies".
In addition, Making the Most of Mercosur issued the following papers:
Alexander J. Yeats, "Does Mercosur's Trade Performance Raise Concerns About the
Effects of Regional Trade Arrangements?" (WPS1729, February 1997))
Azita Amjadi and L. Alan Winters, "Transport Costs and 'Natural' Integration in
Mercosur" (WPS 1742, March 1997)
Claudio Frischtak, Danny M. Leipziger and John F. Normand, "Industrial Policy in
Mercosur: Issues and Lessons"
Sam Laird (WTO), "Mercosur Trade Policy: Towards Greater Integration"
Margaret Miller and Jerry Caprio, "Empirical Evidence on the Role of Credit for SME
Exports in Mercosur"
Malcom Rowat, "Competition Policy within Mercosur"
For copies of these papers or information about these programs contact Maurice Schiff, The
World Bank, 1818 H Street NW, Washington, D.C. 20433.
L. Alan Winters
Research Manager
Development Research Group






1. Introduction
The objective of this paper is to explore whether there exists a systematic relationship
between a developing country's participation in an effective preferential regional trade
agreement (RTA) and the restrictiveness of its trade. The motivation for this study derives from
the current debate on a) whether or not regional trading blocs are a stepping stone towards a
more liberal global trading system and b) whether or not there has been a change over time in
the characteristics of such blocs whereby the "new" blocs differ meaningfully from the "old"
ones in this specific respect. The analysis is restricted to reciprocal RTA's involving developing
countries either in partnership with developed countries (North-South RTAs) or with other
developing countries (South-South RTAs). North-South agreements in which the preferences
are unilaterally granted by the former to the latter, such as the Lom6 Convention or the
Generalized System of Preferences (GSP), are therefore excluded.
Among developing countries, it is not easy to find many that have not been in the past
or are not currently member of some kind of preferential or regional trading bloc. Virtually
every country in Sub Saharan Africa and Latin America participates in at least one such
grouping, and many belong to three or even more groupings. Despite this proliferation of
trading blocs, however, not every bloc can be considered as being effective, in the sense of
playing a significant role in shaping the trade flows and/or policies of its members. It is
therefore imperative to develop criteria that allow to decide which of these blocs have been
and/or are presently truly effective, in order then to compare their members' external trade
regimes with those of other countries that do not participate in an effective regional groupings.
Section 2 of the paper attempts to do precisely that. It looks at intra-bloc trade shares
and trade intensities of the principal RTAs involving developing countries to see if any
systematic trend could be detected in the period following the formation of the blocs. The
existence of such a trend together with the general knowledge of various blocs is then used to
divide the countries for which data are available into two groups: those that belong or have in
the past belonged to an effective RTA and those that do not. In section 3 a number of suitable
indicators of trade policy are developed. Sections 4-6 proceeds to compare these indicators for
the two groups of countries in order to look for any systematic differences that may exist
between trade policy of the two group of countries. Section 7 contains the general conclusions
of the paper. The paper also contains two appendixes. Appendix I provides a description of
how trade intensities are computed. Appendix II contains a brief description of the salient
characteristics of regional trade agreements (RTAs) whose expressed objective has been the
promotion of trade in goods and services (including factor services) via preferential treatment
accorded to partners. The survey covers only the RTAs involving developing countries,
whether in partnership with other developing countries or with industrialized countries, so long
as the arrangements are reciprocal. Thus, agreements that grant unilateral preferences to
developing countries such as the Lome convention and GSP are not considered.l
For a recent survey of regional groupings see Harmsen and Leidy (1994).



2. Classification of Regional Groupings
A partial criterion for discerning effective blocs from non-effective ones is to look at
the liberalization of intra-bloc trade in goods and services (including factor services) in
comparison with barriers to trade with third countries. This exercise requires accurate
knowledge over a relatively long period of time of the effective implementation of trade
agreements signed by each partner and appropriate data and information may not always be
readily available. However, to the extent that effective intra-bloc trade liberalization leads to a
relatively more rapid trade expansion with partners, another criterion for assessing the
effectiveness of PTA is provided by the pattern over time of intra-bloc trade shares and trade
intensities. An expansion of trade among partners beyond the level that would have occurred in
the absence of an agreement is a potential indicator of effectiveness. This approach has the
advantage of relying on trade data that are much more readily available than information on
intra-bloc trade liberalization. Ideally, such a criterion requires some kind of a model, which
would measure the "counterfactual" trade and compare it to the existing level for each
grouping. One such model widely used in the literature is the so-called "gravity model."2
Because the construction and estimation of such a model for all the groupings examined here
goes beyond the scope of this paper, a regional grouping is judged as effective if the data reveal
that the share and/or intensity of intra-group trade in the years following the formation of the
group is significantly larger than in the years before, and if there is enough evidence from the
literature to believe that the increase in trade shares/intensities is not a pure statistical artifact
(e.g. arising from a declining share in world trade) but rather the result of a genuine increase in
intra-bloc trade flows.3
This is of course a rough criterion. For instance, the very expectation of a positive
trade deal may already boost the flow of trade between potential partners even before any
formal agreement is signed (e.g. the US-Israel FTA and NAFTA); or the agreement may be
quite important for one or two members of a FTA (usually small compared to the group as
whole) but not for others. In the case of several groupings in Africa, for instance, the
agreements appear to be significant for one or two net exporting countries, especially if only
manufactured trade is considered, but not for the group as a whole. This appears to be the case
for Cameroon in UDEAC, Cote d'Ivoire and Senegal in CEAO/UEMOA, Kenya and
Zimbabwe in PTA/COMESA.
Similarly, partners in a particular grouping may be expanding their trade with each
other for reasons that might be independent of the formation of the regional bloc, such as faster
than average economic growth or generalized trade liberalization. It is thus necessary to purge
the growth in intra-bloc trade shares of the influence of such independent factors. One way of
doing so is to consider the trend in intra-bloc trade intensity alongside with intra-bloc trade
shares.4 If for a particular grouping both indicators show a systematic upward trend, then the
2For a description of the gravity model see Foroutan and Pritchett (1992). For a recent application
to a number of RTAs considered in the present paper see Soloaga (1997).
In a completely different approach, Page (1996, p.2) defines a bloc as 'successful' or effective
if "it survives and ..develops or evolves, in terms of its scope, of its formality, and perhaps
of the number of members."
4Trade intensity indices deflate changes in the share of trade of two or more partners with one
another with variations in their share in total world trade. They highlight the importance of
-3-



presumption of effectiveness of the group is enhanced. This is the approach followed in this
paper. The shares of intra-group import and export trade in non-fuel products and trade
intensity indices for the period 1965-95 (averaged over five-year periods) are reported in
Tables 1-3.
Based upon the discussion above and the information contained in Appendix If, the
following groupings are considered as effective. In Latin America these are : CACM (in the
early years following its formation in 1960 and then again in the 1990s), the Andean Group,
and MERCOSUR (all since the beginning of the 1990s).5 Since there is a flourishing of
bilateral or multilateral agreements in Latin America, the above list is likely to expand in terms
of countries it covers. However, most of these new accords are just too recent for their impact
on partner's trade flows to be captured by available trade data. In Africa, two groups could be
considered as effective: CEAO/UEMOA, especially during its early years, and SACU.
Zimbabwe, Kenya, and Cameroon can also be considered as belonging to an effective regional
grouping because as net exporters they have benefited from the regional trade agreements in
which they have participated, even though these agreements have had a negligible effect on the
trade flows of other partners.6
Among other prominent regional groupings involving only developing countries,
neither ASEAN nor GCC have thus far proved effective. In the case of GCC, the member
countries' similarity of production and trade structures, as well as the their relatively open trade
regimes vis-a-vis the rest of the world account for the ineffectiveness of their RTA. In the case
of ASEAN, the lack of effectiveness is mostly attributable to the very limited trade concessions
given to partners. The recent arrangements amongst the ASEAN members can in the future
lead to faster growth of intra-group trade, but these are still being implemented and are
therefore too new for their impact to be reflected in current data.
Among the North/South groupings NAFTA and Israel/US FTA are argued to be
effective. The EU-Mediterranean initiative promises to have a profound impact on the whole
policy environment and welfare of the participating Southern countries. However, the initiative
is at its infancy for some and not yet ratified by others. It is therefore too soon for its effect to
be reflected in the available data.
Before concluding this section, it is worth noting that there is another sense in which a
regional grouping can be judged effective. Although a regional grouping may be judged
ineffective based upon internal trade shares, in a policy sense membership to the group may
prove to be quite important. This is seen in the context of two groupings in Africa (CEAO and
UDEAC, see Appendix II) where it is argued that partnership in a regional bloc played a
crucial role in creating an extra layer of complex and distortionary indirect taxes (including
trade taxes). Because, however, the intent of this paper is to relate policy stance to regional
group membership, using policy stance also as a criterion for effectiveness runs the risk of
seemingly small changes in the trade of countries whose reciprocal trade is relatively small.
For the definition of the index see Appendix I. For further discussion on the use of the
intensity index see Braga et al. (1994), Frankel and Wei (1996).
5This is compatible with recent analysis of the three groupings; see Soloaga, op. cit.
6For further elaboration see Foroutan (1993).
-4-



introducing a certain circularity into the reasoning. The impact, if any, of group membership
on partners trades policy is hence ignored as a criterion for effectiveness.
3. Indicators of Trade Policy and Data Sources
In the absence of a unified all-comprehensive measure to gauge the
restrictiveness of a trade regime, the trade policy stance of a country is ordinarily
measured by a wide variety of indicators, including the incidence of non-tariff barriers
(NTBs)7, such as quotas, import license requirements, domestic content requirement,
and so forth; the height of tariff and para-tariff charges; a country's commitments
under the GATT, including the level and share of tariff bindings; and the black
market premium as a proxy for foreign exchange rationing at the going exchange rate.
However, the multiplicity of these barriers, some of which may be actually
redundant, makes it exceedingly difficult to construct an ad-valorem index of trade
restrictiveness that is comparable across countries and over time. For this reason some
researchers have tried to construct other, more comparable measures of trade
restrictiveness. For example, in a study of trade liberalization in Africa, Narasimhan
and Pritchett ( 1993) measure the evolution of the restrictiveness of a country's import
regime by comparing the gap between its actual imports and its notional demand for
imports. The notional demand is computed on the basis of the country's level of
income, real exchange rate and a set of pre-selected elasticities of import demand with
respect to these variables. In another study Nash (1993) uses a similar approach to
estimate changes in the "tariff-equivalent" of multiple restrictions on imports in a
number of developing countries.
Given the very large number of countries and the long span of time, no attempt
at estimating an overall index of protection is made in the present study. Rather, as
many indicators of trade policy as possible are employed and for as many countries as
data from a variety of sources allow. The data are summarized and reported in Tables
5-7. In these Tables the countries are classified not only according to their membership
in an effective RTAs, but also by region since important differences appear to exist
amongst various regions.
Table 5 reports tariff and NTB data for all developing countries for which
such data are available. Columns I-IV of these Tables report the (unweighted) mean
(MFN) tariff rate averaged over five-year intervals for the period 1978-94. Columns V
and VI report the latest average tariff rate available together with the year to which the
latest data refer. Columns VII-IX of the same Tables report additional information on
the structure of protection, namely the maximum tariff rate, the number of tariff bands
and total other charges on imports. Since the latter information, obtained from IMF
(1994), is missing for several countries, Columns X and XI provide additional
information on total charges (tariffs and other para-tariff taxes) on imports for two time
periods: 1984-87 and 1991-93. The latter information is obtained from UNCTAD's
Directory of Trade Regimes (1994). UNCTAD is also the source of data reported in
columns XII and XIII of Table 5, which show the percentage of tariff lines affected by
For a comprehensive list of non-tariff barriers see UNCTAD (1994).
-5-



non-tariff barriers. The latter information from UNCTAD is not available for Africa.
The average rate of tariff refers to unweighted MFN tariff for all products.
Unweighted rather than import-weighted tariff was chosen both because of data
availability and because import-weighted average tariff tends to underestimate the true
average protection rate. Also, the MFN tariff of a country is chosen to represent a
country's general protection policy, that is, its policy towards all countries that are not
in a trade arrangement with it. The choice of MFN tariff rate as opposed to, say, the
average overall nominal tariff rate (i.e. the mean of tariff rates applied to third
countries and partners) makes the ranking of countries by their protection rate
independent of their membership in an RTA.
However, because trade with actual or potential partners for some countries
belonging to an RTA is very large, Table 5 (column IX) also reports the most recent
average overall tariff for countries that belong to an effective RTA. The latter is the
weighted average of MFN tariff and the duty applied to partners (assumed to be zero)
with 1995 import shares of third countries and partners representing the appropriate
weights. This exercise was done only for the most recent year for which both tariff and
trade data are available (usually 1995) for two reasons. First, because most regional
arrangements, either amongst developing countries or between these and developed
countries, were not really fully implemented until very recently, or are still in the
process of implementation (this is particularly true for the Euro-Mediterranean
Association Agreements). Secondly, tariff rates do not change very frequently so that
computing the average overall tariff for more than one year would not add enough
additional information to make the exercise worthwhile. Finally, although the European
Union's free trade agreement with the Mediterranean countries is still in its infancy and
far from implemented, given the very large volume of trade that the latter conducts
with the EU, the overall hypothetical average tariff rate has nevertheless been
computed for the Mediterranean countries to assess the impact of such an agreement on
their overall rate of duty protection.
4. Integration and the Import Regine
What do the data reveal for various regions? Let us begin with Latin American
(LAC) countries. Of the twenty LAC countries that appear in Table 5 (parts A. 1 and
A.2), the majority (fourteen countries in all) are classified as belonging to one or
another effective RTA. Only a few small Caribbean countries and Chile, which only
recently entered an FTA agreement with MERCOSUR, can be considered at the time
of writing as not belonging to an effective RTA. Amongst the fourteen countries that
are now members of an effective RTA, the four member countries of CACM (Costa
Rica, El Salvador, Guatemala and Nicaragua), and the five member countries of the
Andean Pact (Bolivia, Colombia, Ecuador, Peru and Venezuela) have been in an
effective regional grouping since the 1960s. As discussed in Appendix II, the older
arrangements were initially successful at promoting intra-regional trade, albeit from a
very small base in the case of Andean Pact, but ran out of steam in the wake of the
debt crises of the early 1980s. The older arrangements were reinvigorated and new
ones were established in the late 1980s/early 1990 with the result that all fourteen
countries listed in the part A. 1 of Table 5 can now be thought as belonging to an
effective RTA.
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The data show that the Latin American countries that are members of an
effective regional arrangement are also those that have liberalized their trade regimes
the most, to the point that on average, they now possess among the lowest levels of
protection in developing countries. Indeed, a recent IMF survey (1994) lists these as
the only developing countries (among the 45 countries considered) where the overall
import regime could be classified as moderately, as opposed to highly, restrictive, with
the number of countries having a restrictive trade regime falling from 11 (73 percent of
the total number of Latin American countries) to only 2 (or 13 percent).8
The data in Table 5 fully support these conclusions. For example, amongst the
Latin American countries, the larger ones such as Brazil, Argentina and Mexico, have
at least halved their average protection rate during the 1990s. The same pattern holds
true if total import charges rather than tariffs alone are considered. Similarly, these
countries have drastically reduced the incidence of NTBs since the second half of the
1980s. For the 14 countries listed in the part A. 1 of Table 5, the average tariff rate
has declined form 31 percent in 1981-85 to 13.8 percent in 1991-94 and further to 11.5
percent in 1995; the average of total charges on imports has declined from 45 percent
in 1984-87 to 14 percent in 1991-93 and the NTB coverage has fallen from an average
of 40 percent of tariff lines to less than 2 percent over the same time period.
The overall tariff protection in LAC countries that belong to an effective RTA
is even less considering the relatively high share of trade with partners. This is
especially true for smaller countries such as El Salvador, Guatemala, Paraguay and
Uruguay, which source one-third or more of their imports from regional partners. It is
also true for Mexico whose imports from NAFTA account for three quarters of all her
total non-fuel imports.
For LAC countries classified as not belonging to an effective RTA, recent tariff
data are more scarce. Besides Chile, relatively recent data are available for only
Jamaica and Trinidad and Tobago. The latest information for Guyana dates back to
1989, and for Bahamas and Haiti to even an earlier date. Any conclusion about the
trend in protection in these countries is therefore partial and subject to further
verification. On the basis of the available data, however, it appears that besides Chile,
the other countries have not achieved the same degree of import liberalization as in the
countries that belong to an effective RTA. The most recent average tariff rate in the
former group of countries (20.2 percent) is twice as high as the average tariff rate in
the LAC countries that belong to an effective RTA (11.5 percent).
Table 5 also reports the same data for Asian and North African countries
divided into four groups: East Asia (part C), South Asia (part D), Middle East and
See IMF (1994), Table 2, p. 37. According to the IMF's definition, the overall trade regime of a
country is defined as moderately open if average tariff is between 11 and 25 percent and the
import/export coverage of QRs is 0-10 percent with high intensity or 10-25 percent with
medium intensity. The latter notion is defined with reference to the "effectiveness" of QRs in
restricting imports. Thus import bans or prohibitive quotas are considered as examples of
high intensity QRs whereas automatic import licensing is and non-binding quotas are
considered as low intensity QRs.
-7-



North Africa (part E) and the Gulf oil producers (part F). None of these countries, it is
argued in Appendix II, belongs to an effective RTA. The data show that on average
the South Asian countries have the highest level of protection of all the four groups,
and that despite some recent liberalization in several countries, including India and
Pakistan, the average rate of tariff and para-tariff protection for the region remains
very high, indeed the highest among all the regional groups examined here.
In East Asia, other than Hong Kong and Singapore which, for all practical
purposes, have no tariff protection, the average rate of tariff has declined substantially
to a relatively moderate level of 15 percent. The average protection rate, however, is
still above that in Latin American countries that are members of an effective RTA, and,
starting from a lower level, the decline in the average protection level is much less
dramatic than in the latter.
The Middle East and North African countries represented in Table 5 (part F)
appear to have implemented the least amount of trade liberalization. Except for the
recent reforms in Egypt and some degree of liberalization in the second half of the
1980s in Morocco, the average rate of protection does not decline in any other country
and remains at a high level of some 27 percent in the most recent year for which data
are available. The level of NTB coverage is also quite high and is expected to fall only
gradually if all countries fulfill their commitments under the Uruguay Round
negotiations of the GATT. Given the high volume of imports that these countries
purchase from the EU, the calculations in column IX of the same Table show that if
and when these countries achieve complete free trade with the EU, the impact on their
overall rate of tariff protection will be quite dramatic, leading to a halving of the
overall average tariff rate (from 22 to 12 percent).
The Gulf oil producing countries, as mentioned earlier, have always had rather
open import regime. The recent rise in average tariff rates, most notably in Saudi
Arabia, is attributable more to revenue needs than to protectionist motives.
In Africa, few countries had undertaken any noticeable import liberalization
until very recently. Other than Ghana and Guinea, which according to the available
data had undertaken a serious tariff reform in the second half of the 1980s, the average
rate of tariff protection in all other countries remains unchanged in the 1990s. The
most important reforms in African countries have occurred only during 1996, when the
seven UDEAC members as well as Benin (a member of UEMOA) drastically reduced
their average tariff and simplified the structure of tariff rates and other indirect taxes
thereby greatly reducing the level and dispersion of the average rate of protection.
Despite these reforms, however, the average rate of protection in SSA remains high, at
around 22 percent with little difference between countries that are classified as
belonging to an effective RTA and those that are not.
Finally, Table 5 (part B) also reports data on the three countries, Israel,
Mexico and Turkey, that are in a North-South RTA arrangement. The data show that
these countries have now a moderate MFN tariff rate, but that the reduction in
protection occurred in the first and second half of the 1980s, respectively, in Mexico
and Turkey, well before these countries had concluded any effective RTA with their
respective Northern partners, namely the US and the EU. The data also indicate that
-8 -



even prior to 1985 signing of the FTA with the US, Israel had a relatively moderate
tariff protection.
5. Integration and the Uruguay Round
Other than the average tariff, for a limited number of countries there also exist
data on their commitments under the most recent Round of the GATT negotiations.
These data, which are reported in Table 6, show the average level of pre- and post-
Uruguay Round (UR) GATT-bound tariff rates, post-UR average applied tariff rates,
and the percentage of imports which are GATT-bound. Once again the data show that
countries that are classified as belonging to an effective regional scheme (all of which
in Latin America) have reduced the most their post-UR bound rate (from 40.5 percent
to 32.7 percent, a reduction of 19.6 percent), even though the bound rate is still
significantly above the applied rate and higher than the average bound rate of the other
two groups of countries reported in Table 6. The first group of countries, however, has
a much higher percentage of its imports GATT-bound than the latter two groups
(almost 100 percent, as opposed to 67 and 63 percent, respectively, in the other two
groups) and its mean applied tariff rate is much below that in the non-regional member
group (13.2 percent vs. 18.6 percent in the group of countries not member of an
effective RTA, or 22 percent if Hong Kong, Macao anid Singapore are excluded from
the latter).
6. Integration and Openness
For all countries classified as before, Table 7 shows the evolution of their
degree of openness over time, measured as total imports plus exports of non-fuel
products as a percentage of their GDP. To the extent that the growth in imports and
exports and hence the openness of a country respond to trade liberalization, a more
rapid increase in the degree of openness (which deflates growth in trade by that in
GDP) indirectly bears witness to the breath and scope of a country's trade
liberalization effort. Since data on trade flows are more readily available than those on
tariffs and NTBs, the information reported in Table 7 complements those in earlier
Tables by providing further evidence as to which countries have liberalized the most
their trade regimes.
The data demonstrate that in the first half of the 1990s the degree of openness
has risen the most in the Latin American countries that belong to an effective regional
scheme, the South Asian countries and the Northern African/Middle Eastern countries
(about 22 percent). However, except for a few countries, most notably Mexico, the
degree of openness in the 1990s in LAC was still below its very high levels in the
second half of the 1970s, i.e. before the onset of the debt crisis. This is not true in the
case of South Asian countries where openness appears to have gradually increased over
time during the entire period considered. The same pattern is in other regions except
for Africa. In the latter, openness increases in the first half of the 1990s compared to
the previous five years, but despite this increase, openness in all countries with the
exception of Mauritius remains well below its high levels in the second half of the
1970s.
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7. Conclusions
The data and information collected from a variety of sources appear to indicate
that, excluding those countries such as Hong Kong, Singapore and the Gulf states,
which have always had a very open and liberal trade regime, the countries that are
currently member of an effective RTA, namely Israel, Mexico, and Turkey which are
in an effective RTA arrangement with the US and/or the EU as well as the Latin
American countries that belong to an effective regional grouping are also the ones that
have most radically liberalized their trade regimes in the past decade.
Does this finding supports a causality link between trade liberalization and RTA
membership? The answer appears to be in the negative for at least two reasons. First,
given that LAC countries are those which have both liberalized the most in recent years
and also belong to effective RTAs, it is difficult to separate the LAC effect form the
RTA effect. Secondly, and more importantly, over the time period considered, there
are examples of both liberalizing countries that did not belong to any regional
arrangements and member countries of effective RTAs that did not liberalize. Among
the latter the Andean Group and CACM countries in the early years of their formation
provide a good example. In the past, their participation in a regional grouping did not
lead to any overall trade liberalization . In fact, it is likely that the regional
arrangement was a sufficiently large obstacle to liberalization so as to induce Chile to
opt out of the Andean Pact to pursue its own reform agenda. Regrettably, the tariff data
in Table 5 do not go back beyond the late 1970s, when the two regional groupings had
already been established for some years, so that a comparison between their pre- and
post- RTA tariff is not really possible. However, the data show that the Andean and
CACM countries' trade regimes were still highly protective towards the end of the
1970s and early 1980s, namely several years after their establishment. In fact, the
early wave of regionalism in Latin America was inward looking and import substituting
with import substitution at regional level replacing that at the national level.9
At the other end of the spectrum the data show that several countries in all
regions of the word (e.g. Chile, Korea, Mexico and Turkey, to mention a few)
significantly reduced their trade barriers without necessarily belonging to any trade
agreement at the time they undertook their trade liberalization measures. Even in the
case of LAC countries that are classified as belonging to an effective South-South RTA,
a closer look at annual data (on which Table 5 is based) reveal that they undertook their
liberalization effort just before the new wave of RTA revival in the early 199s and
continued thereafter. Thus Argentina's average tariff rate was reduced from about 27
percent in 1987 to 20.5 percent in 1990 and to about 10 percent in 1991, the year
MERCOSUR was formed. Similarly, Brazil began reducing its average tariff rate in the
second half of the 1980s, from some 50 percent in 1987 to 32 percent in 1990, 25
percent in 1991, and continuing to reduce it further in the 1990s. The data show the
same pattern also in Peru. Uruguay and Venezuela, all of whom liberalized their import
regimes toward the very end of 1980s.
See Nogues and Quintanilla (1993).
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Thus, to the extent that any relation between regionalism and trade liberalism
can be established, it appears that the acceptance of a liberal trade policy may be a
requirement for the survival and deepening of a meaningful RTA whereas belonging
to a regional scheme constitutes neither a necessary nor a sufficient condition for an
open and liberal trade regime. This is particularly true in the case of (economically)
small partners in a regional grouping (e.g. the developing partners in all North/South
arrangements) which import heavily from their larger partners even in the absence of
any formal arrangement. In effect it would be hard to believe that countries that are
highly protectionist are willing to liberalize even a portion of their trade that takes place
with their partners unless they embrace an altogether more open import policy.
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Appendix I: Definition of Trade Intensity Index
Trade intensity index (Iij) for country i's exports to country j is defined as the share of country j
in country i's total exports (Xij/Xi) relative to the share of j imports (Mi) in total world imports,
net of i's imports (M,-Mi):'0
Iii = (Xii/Xi)/(Mj/(M,,-Mi))
The term Mi is deducted from the denominator to take into account that a country does not
import to or export from itself. In the above formula i and j can indicate a single country or a
group of countries. If i indicates a group of countries for which we desire to measure the
intensity of its intra-group trade for exports, then for intra-group exports, the intensity is
defined as:
Igx= (Xgg/Xg)/(Mg/Mw)
where lgx indicates intra-group export trade intensity; Xgg and Xg are the group's exports to
itself and to the world as a whole; Mg and M, indicate, respectively, total group's import from
the world as a whole and total world import trade. In this case no adjustment is necessary in the
denominator since (unlike a single country) a group does trade with itself. If, however, one
desires to compare intra-trade share with the share of the group in trade with the rest of the
world, then Xgg must be deducted both from Mg and M, in the denominator of the equation
above. This adjustment is not done in the calculations that appear in Table 3. This is of little
consequence since, dealing with developing countries, Xgg is a relatively small number in
comparison with both Mg and M,. An import-trade intensity index can be calculated in a
similar manner.
The value Ij (or Igg) varies between zero and one. A value of the index greater than unity
indicates that country i trades with country j more intensely than does the world as a whole.
Vice versa, a value of Ij less than one is indicative of a small flow of trade between i and j
relative to j's trade with the rest of the world.
10 See for example Braga et al. (1994). See also Anderson and Blackhurst (1993) for a discussion
of the index and its use in regional integration context.
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Appendix II: Major Regional Trade Blocs Among Developing Countries
North-South Agreements
Amongst the North-South agreements, all of which are considered effective in this
paper, three are of particular interest in the context of this paper: The European Union (EU)'s
recent Association Agreement with a number of Mediterranean countries; The North American
Free Trade Agreement (NAFTA) between the US, Canada and Mexico; and the US-Israel Free
Trade Agreement of 1985.
EU's Mediterranean Initiative.1 Since the early years of its establishment, the
European Union has concluded a large number of trade agreements with developing countries,
either as a group or individually. 12 Until recently, however, virtually all trade agreements
between the EU and the developing countries were non-reciprocal in character, namely trade
preferences granted by the EU to its developing partners were not reciprocated by the latter. In
contrast, the recently-launched Mediterranean initiative envisages the creation of a reciprocal
free trade or association agreement between Europe and the Mediterranean Region (MR)
countries,'3 requiring the latter to create, within a time frame of 10-12 years, a free trade area
(customs union in the case of Turkey) between each of the MR countries and the EU for non-
agricultural products.
So far, the agreements with Morocco, Israel, and Tunisia have already been signed and
entered into force. Similarly, the Customs Union agreement with Turkey has now become fully
binding. Negotiations with another three Mediterranean countries (Egypt, Jordan, and
Lebanon) are at an advance stage and are expected to be concluded shortly.14 Given the very
large share of the EU in total trade of the MR countries, the association agreement with the EU
will have a significant impact on their external trade and protection policies, not only vis-a-vis
Europe, but also in respect to the US, as it is likely that before long the US would want to enter
into a similar agreement with the MR countries in order to preserve its market share and
strategic position. The Euro-Mediterranean Association agreements are therefore considered
very effective here.
The North American Free Trade Agreement (NAFTA) 15 The NAFTA Treaty signed
by Canada, Mexico, and the US and which entered into effect on January 1, 1994, is
considered here an example of a very effective regional bloc because of its significant effect on
I See Harrison et al. (1996), Rutherford et al. (1995), Hoekman (1996), Jbili et al. (1996), Martin
(1997), Nsuli (1996)
12 See EU Commission (1996).
MR countries are Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, the
Palestinian Autonomous Territories, Syria, Turkey and Tunisia.
14 For the full text of the interim Agreement with Israel see Com(95) 618 final of 29.11.1995 and
the OJ L 71/96. For the agreement with Tunisia see COM(95) 235 final of 31.05.1995. For
the agreement with Morocco see MA 24/10/95 - EM I.
15See Arndt et al (1996), Casario (1996), Whalley (1996).
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its member countries' trade with each other, particularly Mexico's trade with the US. Data in
Tables 1-3 show a considerable increase in trade shares and intensities of member countries in
the 1990s, following the NAFTA negotiations. The combined share of Canada and the US in
Mexico's imports and exports which stood steady at roughly two-thirds of Mexico's total (as
well as non-fuel) imports and exports between 1965 and 1990, increases by almost 10
percentage points, respectively, in 1995. A similar pattern is observable in the intensity index.
The latter which was roughly equal to 3.5 during the entire period from 1965 to 1990,
increases by 30 percent to a value of 4.3 in the 1990s.
US-Israel FTA. The 1985 free trade area agreement between Israel and the US was the
first such agreement between a developed and an industrializing country that envisaged full,
reciprocal treatment of imports by both partners, albeit with some concessions to Israel. In fact,
Israel was granted permission to impose extra protection for its infant industries against imports
from the US. The scope of infant industry protection was, however, limited by restricting it to
new industries that did not exist at the time of the signing of the agreement and by limiting its
duration to twenty-four months only. Moreover, its application at any time was restricted to at
most 10 percent of total imports from the US. Judging by its considerable impact on Israel's
exports to the US it is considered as an effective example of a North South regional trade bloc.
Israel's share of exports destined to the US market, which until 1980 had averaged around 17
percent, increases to above 30 percent in 1985-89 and remains at that level during the 1990s.
The FTA agreement appears to have had a much weaker impact, if any, on Israeli imports from
the US. This outcome was partly the result of Israel's obligation to extend to the EU any
preferences granted to the US, and partly the result of its ability to limit these preferences to
protect its infant industries
Latin America
Attempts at regional integration and the idea of an eventual continent-wide unified
economic bloc date back to before the war.' However, it was not until the 1960s when the first
regional groupings were created. Despite the rhetoric of unity and integration, however, with
few exceptions, these initial groupings had a limited success at achieving their objectives.
Attempts at regional integration in Latin America were renewed with vigor towards the end of
the 1980s, after many countries underwent a period of structural adjustment and reform.
According to some estimates, between 1990 and 1994 alone, twenty-six bilateral and
multilateral trade agreements were signed among Latin American countries.'7 Many authors
refer to these initiatives as "open regionalism," or "open blocs" to distinguish them from the
past experience of "closed blocs." The term loosely indicates a preferential trade arrangement
that is conducive rather than contrary to integration with the world as whole in so far as (a)
external barriers against third countries' imports are relatively low and do not increase (or even
decline in some cases) compared to that prevailing in member countries prior to the formation
of the bloc; (b) regional preferences are meant to promote exports and ready the terrain for
more effective competition outside the region rather than protect import-substituting activities.
Other characteristics of "open regionalism" are argued to be reliance on market forces rather
than centralized industrial planning and relatively little tolerance for "special protection needs"
16 See Battaler (1995), p. 27.
17lbid, p. 31
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of member countries.18
It is widely believed19 that most of the new and resurrected versions of older Latin
American regional initiatives have not only been quite successful at re-orienting the region's
trade towards itself, but also they hold the promise of being more sustainable and cohesive than
in the past. This is due both to the more liberal trade stance of the majority of Latin American
countries and the growing importance of manufacturing trade, and hence, increased intra-
industry trade opportunities in the continent. To the extent that regional integration schemes
that are based on intra-industry specialization and trade are associated with lower dislocation
costs of factors of production than schemes based on inter-industry specialization and trade, the
changes that have taken place in Latin American countries' productive and trade structures in
the past three decades are now believed to be much more conducive to a lasting and cohesive
regional integration than it was the case during the first wave of such initiatives in the 1960s. 20
Below the major Latin American RTAs are briefly reviewed.
Central American Common Market (CA CM). CACM was founded in 1960 with the
participation of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The objective
of CACM was to establish a common market with a common external tariff. Although internal
friction largely prevented the full achievement of this goal, the formation of the common
market is believed to have had a significant initial impact on intra-group trade (Tables 1-3).
The initial impact was, however, tapered off during the debt crises of the 1980s. In the early
1990s, under more stable political conditions and with more open economic policies in the
member countries, a series of initiatives were adopted to revive CACM as a more open and
liberal trading bloc. This renewed effort at integration has resulted in a dramatic growth in
intra-CACM trade and trade intensity from the low levels of the post-debt crisis period
The Andean Pact. The Andean pact was established in 1969 with the participation of
Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela. Chile later left the Pact in 1976. The
objective of the Pact was to enlarge the small domestic markets of member countries and
21
promote their industrial development via regional import substitution.  The Pact, however, had
a very limited impact on the trade orientation of its members in its initial years. Similar to
CACM and reflecting the changes that had occurred in the interim at the national level, the
Andean Group began a process of renewal in the late 1980s- early 1990s aimed at transforming
the group into a relatively open and liberal regional bloc. These changes appear to have
exerted a very strong impact on the level and intensity of their internal trade (see Tables 1-3).
Latin American Free Trade Area (LAFTA). LAFTA was founded in 1960 by Argentina,
Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela,
with the aim of promoting the member countries' industrial growth behind regional protective
barriers. In 1980 its name changed to the Latin American Integration Association or LAIA.
18For a discussion on the meaning of open blocs or open regionalism see Gana (1994), Rosenthal
(1994) and Salgado (1995).
Ibid.
See Braga, Safadi and Yeats, op. cit. for further discussion and quantification of changes in the
trade and production patterns of Latin American countries.
21 See Salgado (1995), p. 70-71.
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Although aggregate data suggest that LAIA's internal trade has been on a marked rise in the
1990s, it should be pointed out that since all members of LAIA already belong to another
grouping (ANDEAN, G-3 and MERCOSUR) all of which are sub-grouping of LAIA, the
increase in intra-LAIA trade since 1990 is attributable to the formation and/or revival of these
other, smaller groups within LAIA than to LAIA itself. This conclusion is supported by a more
careful analysis of the data which show that once the impact of other smaller blocs is taken
into account, LAIA has had no positive effect on member's internal trade with each other.
Caribbean Community and Common Market (CARICOM).22 CARICOM was
established in July 1973 with the participation of Antigua and Barbuda, Bahamas, Barbados,
Belize, Dominica, Grenada, Guyana, Jamaica, Monserrat, St. Christopher-Nevis, St. Lucia, St.
Vincent and Grenadines, Trinidad and Tobago. Given the limited potential for economic
integration among such economically minuscule nations with similar production and trade
patterns, CARICOM appears to have had only a very limited impact on the trade patterns of its
members and is not considered as an effective regional grouping in this paper.
Common Market of the South (MERCOSUR). MERCOSUR was created in 1991 as a
customs union by Argentina, Brazil, Paraguay and Uruguay. Since 1996 Bolivia and Chile have
become associate members of MERCOSUR by entering into an FTA agreement with its
founding members. Since its creation, all MERCOSUR countries have seen a surge in the
share of their internal trade that bears witness to the influence of the preferential arrangement.
Based on the trend in internal trade and several recent studies on the impact of MERCOSUR in
the literature,23 it is taken as an example of one of the most effective regional groupings in
Latin America.
Sub-Saharan Africa
Together with Latin America, SSA has the highest number of regional groupings in the
developing world, with often overlapping membership and objectives that vary from limited
cooperation in specific areas to full fledged economic integration. Some of the regional
grouping in SSA --such as the Eastern African Community which is just now being revived
again, the Southern African Customs Union (SACU), and the French Franc Zone groupings--
date back to the colonial era. However, most of the integration schemes were adopted after
independence during the late 1960s and 1970s. In many instances, the groupings comprised
countries, which had shared colonial ties to the same foreign power because the colonial ties
had created a host of common institutions, a common official language, and a common
currency. In other instances, the regional groupings, notably the larger ones, were more in line
with the geographic proximity of the member countries.
Despite the proliferation of regional groupings in Africa, it appears from the growth of
intra-regional trade shares that in most instances they have achieved little by the way of
promoting regional trade integration.24 Data in Tables 1-3 show that no group has been
22 For details on recent developments see CARICOM Secretariat (1995a) and (1995b). See also
Lewis (1995) and Serbin (1994).
23 See Yeats (1997), Braga et. a] (1994), and Soloaga (1997).
24 A notable exception is SACU. For details see below.
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successful at elevating intra-regional trade beyond a negligible portion of Africa's total trade.
The data also show that until the beginning of the 1990s the internal trade shares of almost
every African grouping either remained constant or actually decreased to below their level
prior to the formation of the groups. This pattern is also apparent from trade intensity indices
for African groupings. For example, the intensity index for the Preferential Trade Area of
Eastern and Southern Africa (PTA) during 1985-89, i.e. four years after the formation of the
group, was lower than in 1975-79, i.e. five years before its formation (Table 3). During the
1990s, however, the data show a slight increase in the level, and a much bigger increase in the
intensity, of intra-African trade. This result, however, is almost entirely attributable to the huge
decline in the share of Africa in total world trade in the past thirty years, a trend that continued
unabated during the 1990s. All groupings saw their share in total world trade decline by at least
one half and more often by two-thirds of its original value (see Table 4). Now, given the
definition of trade intensity (see Appendix 1), a decline in the share of trade of a group in total
world trade necessarily results in an increase in trade intensity in the face of steady or less
steeply declining trade shares with partners.
Based upon the above discussion and the trend over time in intra-group trade shares
and intensity indices, it is argued here that most of African groupings have been ineffective.
This is probably particularly true for the larger groupings such as ECOWAS and PTA. There is
then some of the more recent initiatives, most notably the CBI and the renewed versions of
SADC, UEMOA and UDEAC that are too new for their impact, if any, on the internal trade of
the participating members to be captured by the available data. This leaves one with a few
regional groupings in the continent that can have any pretense at effectiveness. Among these,
SACU is the oldest and by all accounts the most effective grouping in SSA.
Although separate trade data do not exist for a long enough period for the member
states separately to test the impact of SACU on their trade flows, it is by most observers
accepted that the trade and revenue arrangements among SACU countries as well as their
monetary arrangement has had a considerable impact on the economies of the smaller members
that goes beyond their external trade. Similarly, it can be argued that the bilateral agreements
between Zimbabwe with South Africa and other SACU states have been more or less effective
for the former.
Amongst the remaining, older groupings there is some evidence that both CEAO and
UDEAC have been to some extent "effective," not solely, or not so much, in terms of their
impact on the overall internal trade shares, but also in terms of their implication for the trade
policy of their member states. Until the recent attempts at renewal of the two groupings, it
appears that membership to these regional arrangements added another layer of complexity and
distortion to the members' trade and indirect tax systems.25 Thus, in a sense, membership in
these regional groupings was effective, albeit in a negative sense. Finally, and additionally,
there exists some evidence from two separate sets of estimates of a gravity model 26 that CEAO,
especially in its early years, did exercise a statistically significant impact on the level of
members' trade with each other. Below the major groupings in Africa are briefly discussed.
25 Here I refer to two indirtect taxes, the so-called Taxe de Cooperation regionale in CEAO and
the Taxe Unique in UDEAC, both of which have been recently abrogated. For details see
Foroutan (1993).
26 See ibid and Foroutan and Pritchett (1993).
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Economic Community of Western African States (ECOWAS), was established in 1975
with the participation of fifteen countries: the seven members of CEAO, namely Benin,
Burkina Faso, Cote d'Ivoire, Mali, Mauritania, Niger, Senegal; the three members of MRU,
namely Guinea, Liberia. and Sierra Leon, plus Cape Verde, Gambia, Ghana, Guinea Bissau,
Nigeria and Togo. Cape Verde joined shortly thereafter. Despite its declared objective of
creating an economic community, it has not to date succeeded to liberalize trade in goods, let
alone factor services, among its members. In this paper ECOWAS is considered an ineffective
regional bloc.
Communaute Economigue de I'Afrigue Occidentale (CEAO)/Union Economigue et
Monaitaire de l'Afrigue Occidentale (UEMOA). CEAO was created by the Treaty of Abidjan
in 1973 with six members: Burkina Faso, Cote d'Ivoire, Mali, Mauritania, Niger, and
Senegal. Benin became a member in 1984. All of the member countries except for Mauritania
belong to the French franc zone and are also members of the West African Monetary Union
(Union Monetaire de l'Afrique Occidentale, UMOA). Mauritania's currency is also pegged to
the French franc and is convertible with CFA at a fixed parity. In early 1990s, and facilitated
by the devaluation of the CFA franc in January 1994, CEAO was replaced by a new initiative,
UEMOA, intended to strengthen the process of integration amongst the members.
Union Duaniere et Economigue d'Afrigue Centrale (UDEAC). UDEAC was founded in
1996 by the former French West African colonies of Cameroon, the Central African Republic
(CAR), Chad, Congo and Gabon. Equatorial Guinea, a former Spanish colony, acceded to the
union in 1985. Alongside the wave of new regional initiatives in Africa and elsewhere, in the
early 1990s UDEAC countries also launched a process of renewal of the union. Its aim was to
replace the existing complex and distorted system of external and internal taxes with a
simplified and transparent one, similar to the one being considered by CEAO members.
Communaute Economigue des Pays des Grands Lacs (CEPGL). CEPGL was founded
in 1976 by Burundi, Rwanda and Zaire. The outbreak of civil unrest in Rwanda and Burundi,
and most recently in Zaire, has stalled any progress towards economic integration.
The Common Market of Eastern and Southern Africa (COMESA)/Preferential Trade
Area for Eastern and Southern African States (PTA). PTA was founded in December 1981
and by the early 1990s, its membership had expanded to eighteen countries in the region:
Angola, Burundi, Comoros, Djibuti, Ethiopia, Kenya, Lesotho, Malawi, Mauritius,
Mozambique, Namibia, Rwanda, Sudan, Swaziland, Uganda, Tanzania, Zambia and
Zimbabwe. Dissatisfaction with PTA's progress and the new wave of regionalism in the
continent led PTA members (joined by Madagascar and Mauritius) to draw up a new treaty
establishing COMESA in December 1993. The new regional grouping became effective and
replaced the PTA in December 1994.
Southern African Development Coordination Conference (SADC)/ The Southern
African Development Community (SADCC).27 SADCC was created in April 1980 to reduce
the dependence of the region on South Africa and to seek foreign financial support for
development projects that could not economically be undertaken by any one of its member
27 For recent developments see Lindeke (1996), Holden (1996).
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countries individually. SADCC's original members included Angola, Botswana, Lesotho,
Malawi, Mozambique, Tanzania, Zambia, Zimbabwe, and Swaziland. Namibia joined the
Community in 1990, after independence. After the end of the Apartheid regime in South Africa
in 1992, SADCC was replace by SADC, yet another preferential trade grouping in the region.
South Africa joined the organization in 1994.
Southern African Customs Union (SACU). SACU was founded in 1910 with the
participation of South Africa, and the so-called BLNS states, namely Botswana, Lesotho,
Namibia and Swaziland. Namibia formally joined in 1990 after gaining political independence
but as an administered territory by South Africa was always a member of the union. It is the
oldest and the most integrated regional bloc in SSA.
The Cross-Border Initiative (CBI). The CBI was borne at the Masstricht Conference on
Africa in 1990 and is sponsored by four major multilateral organizations, including the African
Development Bank, the IMF, the World Bank and the EU as an effective way of furthering the
overall trade liberalization in Africa. This aim is to be achieved by encouraging the
participating countries to converge toward a relatively moderate level of external protection
while liberalizing internal trade among CBI partners. So far fourteen countries have endorsed
the Initiative. These are Burundi, Comoros, Kenya, Madagascar, Malawi, Mauritius, Namibia,
Rwanda, Seychelles, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
Bilateral Trade Agreements In Southern Africa. Other than the major groupings thus far
considered, there exists a number of bilateral trade agreements, mainly between the Republic of
South Africa on the one hand, and several of the regional countries on the other. Among the
regional bilateral agreements involving South Africa, 28 the main ones are those with
Zimbabwe, Malawi, and Mozambique. The agreement between South Africa and Zimbabwe
dates back to 1964. South Africa's agreements with Malawi and Mozambique involve unilateral
tariff concessions by South Africa on some imports from the latter. Finally, there are two free
trade agreements between Zimbabwe and Botswana and Zimbabwe and Namibia.
Asia, Middle East and North Africa
Unlike Latin America and Africa, there are relatively few trade integration schemes in
Asia, none of which, it is argued here, has been effective in terms affecting the trade
orientation of its members. Even in the case of the two major schemes in Asia --the
Association of South East Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC)--
the initial motivation for their formation was more political than promotion of trade, even
though in the course of time there has been a systematic move towards deeper economic
integration. The two principal regional schemes, ASEAN and GCC, are briefly reviewed
29
below. Other regional initiatives --among which the Economic Cooperation Council, the
South Asian Association for Regional Cooperation,30 the Arab Common Market31 and the
28 For the role of South Africa in the sub-region see Kanji (1996). For bilateral agreement with
Zimbabwe see World Bank (1995).
29 Currently encompassing Afghanistan, Iran, Pakistan, Turkey and the newly independent
Central Asian countries of Azerbaijan, Kazakistan, Kyrgyz Republic, Tajikistan,
Turkmenistan and Uzbekistan
30 Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka.



Maghreb Union,32-- are more cooperation agreements than preferential trade arrangements and
as such are not discussed any further in this paper.
ASEAN.34 ASEAN was created in 1967 with the participation of Indonesia, Malaysia,
Singapore, Thailand, and the Philippines. Brunei joined the association in 1984, shortly after
gaining independence. Vietnam joined the Association in July 1995. Its initial objective was to
foster peaceful national development of its member states through cooperation. In 1977 a
limited program of preferential trade arrangements (PTA) was first adopted by ASEAN
member states., followed in January 1992, by an ASEAN Free Trade Area (AFTA). Although
the share of both intra-ASEAN import and export trade has increased since AFTA's creation, it
is hardly a result attributable to ASEAN's free trade arrangement since the intensity of intra-
ASEAN trade actually declines over the same period. 5 In this study ASEAN is not considered
to be an effective trade promoting regional organization.
The Gulf Cooperation Council (GCC).-6 GCC was established in May 1981 by
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). Although
events in the region played an important role in the creation of GCC, the member countries did
have a long history of informal cooperation. The rules governing economic integration of
GCC partners were spelt out in the so-called Unified Economic Agreement (EA). The
agreement foresaw the creation of a common market with free movement of goods and factors
and a conunon external tariff of 4-20 percent on goods originating in third countries. So far,
with few exceptions, barriers on trade among GCC members have been substantially removed,
but the CET has not yet been introduced. However, the free trade agreement among the GCC
countries does not appear to have had much impact on the relative share of their mutual trade.
In fact, data in Tables 1-3 show that for the GCC as a whole, both intra-bloc trade shares and
trade intensity indices have been declining over time. This outcome is mostly attributable to the
similarity in their production and trade structure as well as to their relatively modest protection
against the rest of the world
31Formed in 1964, it comprises Egypt, Iraq, Jordan, Mauritania, Syria and Yemen and was.
32 This comprises Algeria, Libya, Morocco, Tunisia and Mauritania and was established in 1989.
33 For a brief summary see Harmsen and Leidy, op. cit.
34 See Edwards eta] (1996); ASEAN Secretariat (1995a) and (1995b); Panagariya (1993);
Frankel and Wei (1996)
35 See also Frankel and Wei, op. cit.
36 For a historical perspective see Peterson (1988) and Ramazani (1988). For a recent evaluation
of the economies of GCC members see Sassanpour (1996).
37see Ramazani, op. cit. p. 6.
-20-



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Table 1. Total Intra-group import trade as percentage
of total imports, non fuel trade, 1965-95
1965-69    1970-74    1975-79    1980-84    1985-89    1990-95       1995
LAC
Andean Group          1.30       2.01       2.42       3.07        3.40       7.25      10.16
CACM                 21.07      22.74      19.86      20.32      11.96       12.64      14.43
CARICOM*              3.33       4.02       3.97       5.97       4.58        4.61        2.7
LAIA/Lafta            8.39       8.23       9.76      10.62      11.81       12.36      13.57
MERCOSUR             12.64       8.70       9.79      '13.25     15.74       19.32      18.29
Mexico/NAFTA +       64.86      65.12      65.10      67.98      69.20       72.51      76.00
Group of Three        0.87       1.18       1.67       1.42        1.44       2.25       3.25
EURO-Mediterranean Agreements +
EGYPT                32.26      30.59      40.62      43.27      40.60      37.70       34.58
ISRAEL               50.02      55.07      49.21      49.07      55.81       53.30      52.06
JORDAN               34.46      31.15      42.89      41.41      37.02       35.27      35.67
LEBANON              43.25      47.14      54.26         na         na         na         na
MOROCCO              61.32      62.13      66.22      62.75      61.81      62.03       59.34
TUNISIA              58.20      64.98      70.14      68.37      68.72       72.34      72.31
TURKEY               50.88      56.27      55.71      49.71      50.49       51.43      50.35
Israel/US FTA+       26.32      21.73      24.83      25.66      20.05       19.58      20.00
Asia
ASEAN                13.70      11.23      11.02      10.95       13.35      14.76      15.81
GCC**                 n.a.       2.33       4.80       2.00       4.19         na         5.0
Australia-            5.52       7.17       6.74       6.67       6.83        7.48       7.73
NewZealand
AFRICA*
ECOWAS
CEAO/UEMOA            5.20       5.49       5.13       6.75       6.74       8.83        8.91
UDEAC                 1.88       4.21       3.17       2.27       2.84       4.23        4.43
PTAICOMESA            7.92       7.32       4.54       4.76       4.38       5.00        6.22
SADCC/SADC            8.57       3.87       1.81       3.10       3.22        3.32       4.32
CBI                  10.22       9.95       5.42       5.26       5.10        5.81       6.72
Notes:
* African and CARICOM figures refer to total trade trade
**The figure for 1995 refers to 1993
+ The import/export shares and intensity refer to The developing partner only and not to all partners.
Source: COMTRADE data base or all countries except Africa and CARICOM. IMF's DOT for the
latter.
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Table 2. Total Intra-group export trade as percentage
of total exports, non fuel trade, 1965-95
1965-69    1970-74    1975-79    1980-84    1985-89    1990-95       1995
LAC
Andean Group           2.20       3.47       6.82        7.91       6.51      13.18      17.83
CACM                  22.61      24.41      21.10       22.52      14.55      19.30      17.64
CARICOM*               5.22       5.96       3.89        4.90       5.45       6.37       3.72
LAIA                   7.55       9.10      11.26        9.94       8.68      12.96      15.14
MERCOSUR               9.00       8.45       8.77        7.92       7.14      14.97      19.67
Mexico/NAFTA +        62.85      68.79      62.41      68.70       78.62      84.71      87.08
Group of Three         1.69       2.68       5.16       4.14        2.65       3.95       4.02
EURO-Mediterranean Agreements +
EGYPT                 16.88      14.38      20.16      34.64       38.33      42.25      46.71
ISRAEL                43.27      40.11      39.27      36.61       31.95      32.61      31.21
JORDAN                 5.23       0.16       3.06        2.88       6.47       4.17       6.17
LEBANON               13.33      11.29       6.84         na         na         na          na
MOROCCO               73.24      69.19      65.11      59.81       59.53      62.74      61.16
TUNISIA               56.69      61.54      70.07       69.89      70.39      76.18      77.95
TURKEY                47.56      49.11      49.58       35.47      43.63      49.55      49.12
IsraelUS FTA+         16.78      18.45      17.43      23.18       32.22      30.48      30.12
Asia
ASEAN                 22.25      19.22       17.53      18.20      17.01      20.33      23.22
GCC**                    na      39.09      33.00      23.34       20.85        na        20.0
Australia-             5.28       6.14       6.14        6.39       7.50       9.00      10.33
NewZealand
AFRICA
ECOWAS
CEAO/UEMOA             6.36       8.86       9.46       10.12       8.60      10.80       8.91
UDEAC                  1.92       3.97       2.31        1.69       3.00       2.21       2.32
PTA/COMESA             7.21      7.786      7.566      6.992       5.298        6.5       7.78
SADCC/SADC             6.07       3.09       2.51       3.55        3.13       3.78       4.68
CBI                    8.26      10.20       7.89        7.52       6.40       8.36       6.72
Notes:
* African and CARICOM figures refer to total trade trade
** The figure for 1995 refers to 1993
+ The import/export shares and intensity refer to The developing partner only and not to all partners.
Source: COMTRADE data base or all countries except Africa and CARICOM. IMF's DOT for the latter.
-26-



Table 3. Export Trade Intensity of various regional or bilateral
groupings with each other; 1965-95, non-fuel trade
1965-69    1970-74    1975-79    1980-84    1985-89    1990-95        1995
LAC
Andean Group               1.3        2.8        4.4         5.9        7.8       17.4        21.5
CACM                      42.7       58.6       49.6       70.5        64.5      100.8      147.4
CARICOM*                   8.8        9.8        5.9        11.0       17.2       27.9       18.6
LAIA                      2.2         2.6        3.3        3.4         4.0        4.3        3.8
MERCOSUR                   6.1        4.5        5.3        6.7         8.6       13.3        12.0
Mexico/NAFTA+              3.1        3.6        3.6        3.5         3.4        4.3        4.4
Group of Three            0.80       1.52       2.48        1.80       1.79       1.83        1.83
EURO-Mediterranean Agreements+
EGYPT                      0.4        0.3        0.5        0.9         0.9        1.0         1.3
ISRAEL                     1.0        0.9        0.9        0.9         0.8        0.8        0.8
JORDAN                     0.1        0.0        0.1        0.1         0.2        0.1         0.2
LEBANON                    0.3        0.3        0.2         na         na          na         na
MOROCCO                    1.7        1.6        1.5         1.5        1.5        1.6         1.6
TUNISIA                    1.3        1.4        1.7         1.8        1.7        1.9         2.1
TURKEY                     1.1        1.1        1.2        0.9         1.1        1.2         1.3
IsraelUS FTA+              1.1        1.3        1.4        1.5         1.7        1.9         1.9
Asia
ASEAN                      8.4        7.1        5.7         4.5        4.7        3.4         3.2
GCC**                      na        85.9       17.0        5.7        11.9         na        11.4
Australia-NewZealand       2.2        3.1        3.6         3.6        4.4        5.9        6.7
AFRICA*
ECOWAS
CEAO/UEMOA                19.3       30.0       30.1       36.1        38.7       64.6       49.7
UDEAC                     9.9        25.3       14.0       10.6        23.0       25.8       30.2
PTAICOMESA                 6.4        8.8       13.9       11.8        10.7       15.6        19.9
SADCC/SADC                 9.1        6.1       12.1       13.3        13.9       18.6       25.9
CBI                       10.8       17.2       18.2        18.9       19.4       28.8        24.0
Notes:
* African and CARICOM figures refer to total trade trade
** The figure for 1995 refers to
1993
+ The import/export shares and intensity refer to The developing partner only and not to all partners.
Source: COMTRADE data base fro all countries except Africa. IMF's DOT for Africa and CARICOM.
-27-



Table 4. Total World Exports to African Regional Groupings
As Percentage of Total World Exports
Non-fuel trade, 1965-95
1965-69    1970-74    1975-79    1980-84    1985-89    1990-95       1995
SADCC             0.67       0.50       0.21       0.27       0.23       0.20        0.18
CEAO              0.33       0.30       0.31       0.28       0.22        0.17       0.18
PTA               1.13       0.89       0.54       0.59       0.50       0.42        0.39
ECOWAS
CBI               0.76       0.59       0.43       0.40       0.33       0.29        0.28
Total             2.89       2.28       1.50       1.54       1.27        1.08       1.03
Source: COMTRADE data base
-28-



Table 5. continued: Average tariff and other charges in various
countries divided by regionimembership in an effective RTA
Unweighted Average MFN tariff                                         Number    Total
Most             Maximum  of Tariff   Other
1978-80    1981-85    1986-90   1991-94   recent   <-year    Tariff++   Bands  Charges++
I         II         III       IV        V       VI          X        Xi       XII
G. Africa
G. 1 Countries that are not members of an effective PTA
Benin                    na        48.3       41.2      40.6      11.1       96        20          4           3
Ethiopia                 na        29.0       29.6       na      28.8        95        80          10         na
Ghana                    na        33.3       18.8      17.0      15.0       95        25           3         na
Guinea                  76.4       76.4       10.0       na       13.0       90        na          na         na
Kenya                    na        41.0       40.3      29.9      19.9       95        35           4         na
Malawi                  21.9       19.4       18.0       na       21.0       94        45          11      01100
Mali                     na         na         na        na       23.0       94     40/100          3       0110
Mauritania               na        24.6       22.3       na       31.4       95       268          17       0/80
Mauritius                na        36.2       36.3       na       29.0       95        80          na         na
Nigeria                  na        33.8       31.0      34.6      35.0       95       100          na         >7
Sierra Leone             na        25.8       30.9       na       21.0       95        40         3/5         na
Tanzania                 na        23.9       30.0      33.0      27.5       94        40           5         na
Uganda                   na         na        25.0       na       17.1       95        30          4          na
Simp. Aver.              na        35.6       27.8      31.0      22.5
G.2 Countries possibly belonging to an effective RTA
Cameroon **             28.3       28.3       32.0      18.8      18.1       96        30           4       1/20
Cote d'lvoire           26.4       27.7       26.1      23.6      20.0       95        35          6           3
Senegal                  na        5.0        13.5      12.3      35.7       95        70           5         na
South Africa             na        29.0       22.0      17.0     21.0        94       100+       >35        5/40
Zimbabwe                 na        10.0       9.2       17.2      21.8       97       100         >3       15/20
Sim Aver.                na        20.0       20.6      17.8      23.3
Overall Ave.
for Africa             na        30.7       25.6      24.4      22.7
G.3 Countries in state of war
Burundi                 37.9       37.9       37.0       na      37.0        88       100
Rwanda                   na         na        33.0      42.0     42.0        91        60
Somalia                  na        35.0       27.0       na       na         na        na
Sudan                   50.6       50.6       49.8       na       na         na       120
Zaire                    na        23.7       22.6       na       na         na        na
Notes:
** = Cameroon's numbers apply to all UDEAC.
@   =   Weighted average of MFN tariff and zero tariff, with weight equal to the share of third countries and partners in total
imports. This assumes zero tariff on M from partners.
&   =   Share of imports from partner is the sum of US (20%) and EU (53%) share in total Israel M.
* = Indicates a recent effective RTA, i.e effective after 1990;
&&  =   Indicates effectiveness in the early years, i.e in the late 1960s
+ +   =   When two maximum rates are given, the first refers to the normal maximum and the second to the rate applicable to
selected items only.
na       Not available
NIA  =   Not applicable
-29-



Table S. Average tariff and other charges in various
countries divided by region/membership in an effective RTA
Share of
Unweiehtcd Average MFN tariff                   partners    ost recen  Max    No. of  Total
Most          in total M    Overall tariff +    Tariff   Other  Mean Total Charg   NTB Coverage
1978-80  1981-85  1986-90 1991-9  recent  year    1995      tariff@           Bands  Charges        84-87  '91-93   84-87  '91-93
I       11     lIt      IV     V      Vt       Vtll        IX       X       Xl       XII         Xtil    XIV     XV    XVI
A. Latin America
A.1 Countries that are members of an effective RTA
Argentina          -          na     31.5    24.6   10.8   9.9    95          0.23       7.6       20       8       10           40     19.4    32      0.2
Bolivia                       na      12.1    18.4    9.9    9.7    95        0.08        8.9      10       3        4           20      10      25      2
Brazil                       44.0    48.2    42.0   20.2   11.1    95         0.14        9.5      20       13      6            80     15.4    35      1.5
Colombia                      na     61.0    28.9    14.8   13.3   95         0.10       12.0      20       4       0            79      12      73     1.7
Costa Rica         &&         na     21.1    18.8   13.1   11.7   94          0.13       10.2    20127      5        1           na      na      na      na
Ecuador            *           a      na      34.3    9.3   12.3   95         0.16       10.3      20       9       1-2          49      11      59      na
El Salvador        &&         na      na      20.0    13.1   9.2    94        0.42       5.3     20/30      5       na           na      na      na      na
Guatemala          &&         na      na      19.4    na    10.8   94         0.32       7.3    20/25       5       0            na      na      na      na
Nicaragua          &&         na      na      22.1    8.0   10.7   95         0.16       9.0       na      na      5-10          na      na      na     na
Paraguay           C         11.2    11.1    10.9   15.4   9.3    95          0.36       6.0       20      na       na           na      na      na      na
Peru                         29.0    29.3    41.0   17.1   17.6   95          0.09       16.0      25       2       na           na      na      na      na
Uruguay                       na     42.5    29.9    18.9   9.3    95         0.46       5.0       20       3       0            na      na      na      na
Venezuela                     na     28.0    28.9    16.0   13.4   95         0.09       12.2      20       4       0            33      17      44     2,4
Mexico                        Ila    24.8    13.9   13.3   12.6   95          0.76       3.0       25       4        1           16      17      13      4
Unweighted Average            na     31.0    25.2    13.8   11.5                         8.7                                    45.3    14.5   40.1    2.0
A.2 Countries nat member of an effective RTA
Bahamas                      29.8    31.1      na      na    32.0   85        NIA        NA        ena      na      na           na      na      na      na
Chile                         na     27.5    17.0    11.0   11.0   95         N/A        N/A       11      na       na           na      na      10    0.2
Guyana                        na      na      18.7    na    20.0   89         N/A        N/A       na       na      na           na      na      na      na
Haiti-                        na     27.7    11.6    na    na        na       N/A        N/A       na      na       na           na          na  na      na
Jamaica                       na      17.0    28.9    19.8  19.3    94        N/A        N/A      30/40     7      20/50         na          na  na      na
Trinidad & Tobago             na      na      17.2    na    18.7   95         N/A        N/A       na        na     na           na      na      na      na
Unweighted Average            na     25.8    18.7   15.4  20.2                                                                   na      na      na     na
B. Countries belonging to a North-South RTA
Mexico                        na     24.8    13.9   13.3   12.6   95          0.76       3.0       25       4        1           16      17      13      4
Israel &                      na      8.0     7.1     8.3    8.3    93        0.73       2.2       na       na      na           na      na      na     na
Turkey                        na     28.9    26.9    9.0      9      93       0.50        4.5      na       na      na           42      25      na      na
Unweighted Average            na     20.6    16.0   10.2   10.0                          2.6                                     na      na      na      na
C. South Asia
Bangladesh                    na     99.9    92.7   60.5  42.0         94    N/A         N/A    75/100      10      3            na      na      na      na
China                         na     49.5    39.3   37.5   36.3        94    N/A         N/A      220       na      na           na      na      na      na
India                         na     74.3    92.7   50.4   47.8        94    N/A         N/A    85/100   >10                    143      95     100    53
Nepal                         na     22.1    21.8    16.1   16.7       95    N/A         N/A     40/110     7       na          22.6   16.1    10.7   0.7
Pakistan                      na     77.2    66.7   61.0   51.0        95    N/A         N/A      265       10      12           88      73      83    14.5
Sri Lanka                     na     36.2    27.2   25.6   24.0        95    N/A         N/A      250       4       3           40.5    29       14      4
Average S. Asia               Da     59.9    56.7   41.8   36.3                                                                 73.5   53.3    51.9   18.1
D. East Asia
Hong Kong                    0.0      0.0     0.0     0.0    0.0       94    N/A         N/A       na               na           na      na      na     na
Indonesia                    29.0    31.0    23.9    19.1   19.4       94    N/A         N/A      200               na          18.2   20.1    95        3
Korea                         na     23.1    16.3   10.1   7.9         94    NIA         N/A       30               na           25      12      9       3
Malaysia                      na      10.6    14.1    13.4  14.3       94    N/A         N/A      105               10          14.3   17.6    3.7    2.1
Philippines                  41.4    32.2    27.8   24.3   20.0        95    N/A         N/A    50/100              na           na         na   na     na
Singapore                     na      0.3     0.3     0.4    0.4       94    NIA         N/A       na               na           na      ta      na     na
Thailand                      na     36.8    40.8   37.8   23.3        95    N/A         N/A       100              na          41.2    37.8    12.4   5.5
Taiwan                        na     29.8    14.8    na    11.2        94    NIA         NIA       na               na           na      na      na      na
Aver. East Asia               na     20.5    17.3    15.0   12                                                                  24.7    21.9    30.0   3.4
" minus HK & Singapore               27.2    23.0   20.9   16
E. Middle East/North Africa
Lebanon                       na      na       na      na    15.4      96    0.48         8.0      na       na      na           na      na      na      na
Jordan                       15.9    14.3    15.9   17.6  20.5         92    0.36        13.1      na       na      na           ela    iia      na      na
Syria                         na      14.8    12.9    na    11.0       90    N/A         N/A       na       na      na          27.5    na      36.6   ela
Yemen                         na     26.0    16.2    na    16.0        87    NIA         NA        na       na      na           na      na      na n    na
Algeria                      44.4    29.6    24.6   22.9   24.8         93    NIA        NIA       60       tia     eia         26.1     25      68     9.5
Egypt                         na     47.4    39.7   42.2  28.3         95    0.35        18.4      800      na      na           54     tia      48      na
Libya                        13.3    14.4    22.7    na    na          na    NIA         NIA       na       na      na           35      na      10      na
Morocco                       na     37.5    22.6   22.8   24.4        94    0.60         9.8      45       na      na          36.1    iia    27.6    na
Tunisia                      23.8    26.3    25.8   27.6   27.0         94    0.72        7.6    41/123    na       na          27.4    30.6      na     na
Aver. MidEast                24.4    26.3    22.5   26.6   21.7                          12.2                                   34.4    27.8    38.0   9.5
F. OPEC Coutnries
Bahrain                       na      1.7      5.1     na    3.0       90         V/A    NIA       na       ta      ela          ia      Ila     na    tia
Kuwait                        ns      3.7     4.2      na    4.2       86         NIA    NIA       na      tta      iia         la       na      na    ei
Qatar                         na      1.8     4.6    an    5.0         90         N/A    N/A       na      nia      iia         iia      na      iia     na
Oman                          na      1.5     3.0      na    5.7       94         NIA    N/A       100      na      na           na     tna       a      eia
Saudi Arabia /a.o             1.9     2.2      8.0    12.1   12.2      95         N/A    NIA       ina      ia      na           iia     iia     nia    iia
United Arab Emirates          na      1.2     4.5      na    4.5       86         NIA   N/A        na      iia     tia          ita     iia      tia     ia
Aver. OPEC                    na      2.0     4.9      na    5.8
-30-



sources for Table 5
*    Columns I-IV: personal communication from Francis Ng, reflecting data from a variety of sources.
*    Columns V: For the majority of countries in all regions but Africa, the sources is Ulrich Reineke:
"Advantages and disadvantages of uniform tariff structures for developing countries", mimeo, 1996,
IECIT, using UNCTAD's TRAINS data base. When the source is Reinekie, the latest year is
normally 1995. For a few countries for which 1995 data were unavailble, the source is IMF (1994):
International Trade Policies, 7he Uruguay Round and Beyond, vol 2, Table 6, p. 48. These reflect
data available by 1994. Finally, for a few countries for which the latest information refers to 1996 or
beyond, the source is staff estimates of IECIT, based on customs data collected for the specific
country. This is the case for Cameroon, Benin, Zimbabwe, and Lebanon. For the latter the source is
Will Martin (1996): 'Assessing the Implications for Lebanon of Free Trade with the European
Union". For the African countries, the source for column V (as well as for columns X-XII) is
estimates by IMF staff based on a number of different sources.
*    Column VIII is computed from data in COMTRADE data base and shows the share of partners in total
non-fuel imports of countries that are classified as belonging to an effective RTA.
Column IX is a weighted average of the most recent MFN tariff in column V and naught (assuming
trade among parmers in an "effective" regional grouping to be completely duty-free) with weights
representing the share of the rest of the world and partners in the indicated country's total imports.
*    Columns X-XII are also based on IMF (1994), op. cit. and/or Reineke, op. cit.
Columns XIII-XVI are based on UNCTAD (1994): Directory of Trade Regimes, Geneva.
-3 1-



Table 6: Uruguay Round Liberalization Indicators of Trade regime in Developing Countries
Post UR    Pre-UR     Post-UR     Post-UR    GATT-Bound   % of imports   Most recent
applied rate. bound rate  bound rate  Bound rate    Post-UR  bound above   average tar.
sim. aver.   IMF 1/     IMF1/    sim. aver.    all goods    applied rate    sim. aver   <-(year)
weighted   weighted
I         II         IlIl        IV           V            VI            VIl          Vill
a. Countries that are member of an effective RTA
Argentina           11.3       38.2       30.9        30.9         100           99.8          9.9         1995
Brazil              15.6       40.7        27         29.5         100          71.8           11.1        1995
Colombia            11.4       44.3       35.3        35.5         100          97.6           13.3        1995
costa rica                     54.9       44.1                                                 11.7        1994
El Salvador         13.5       34.5       30.6        37.4         97.8         96.8           9.2         1994
Mexico              13.4       46.1       33.7        34.7         100          97.5           12.6        1995
Peru                15.9       34.8       29.4        29.7         100          98.3           17.6        1995
Uruguay             9.4        20.9       30.9        30.7         100          84.9           9.3         1995
Venezuela           15.3        50        31.1        33.3         100           89.9          13.4        1995
Average             13.2       40.5       32.6        32.7                                     12.0
% reduction in bound rates     -19.6
b. Countries that are members of a semi-effective RTA
Australia           10.4       20.1        12.2       12.1         97.2          30.1          9.8         1993
New Zealand         10.0       23.8       11.9        14.2        100.0         42.3           8.8         1993
Senegal             12.8                              15.9         58.3         25.4           35.7         95
Zimbabwe            9.2                               48.6         14.7          5.9           21.8         97
Simp. Aver.         10.6       22.0       12.1        22.7         67.6                        19.0
c. Countries that are not members of an effective FTAs
Chile                11        34.9       24.9         25          100           99.7          11.0        1995
Hong Kong            0          0           0          0           27.9           0            0.0         1994
Jamaica             19.6       16.5        50         54.9         100           100           na           na
India               45         71.4       32.4        41.4         58.5         16.5          56.3         1992
Indonesia           18.3       20.4       36.9        39.4         93.4         88.5           19.4        1994
Korea               11.5        18         8.3        13.3         83.2          5.7            9          1992
Macao                0          0           0           0          20.8           0            na           na
Malaysia             13         10         9.1        16.3         77.4         30.6           14.3        1994
Philippines         24.4       23.9       22.5        24.5         60.6         16.6          20.0         1995
Singapore           1.3         0.4        5.1         7.1          66          43.9           0.5         1994
Sri Lanka           26         28.6       28.1        35.9         26.7          9.3          24.1         1995
Thailand            27.6       35.8       28.1        26.8         64.3          8.3           23.1        1995
Tunisia             27.6       28.3       40.2        45.7         67.9          46            30.0        1992
Turkey               na        25.1       22.3        19.3         45.1          3.2           9.5         1993
Simp. Average       17.3       22.4       22.0        25.0         63.7                        18.1
"-HK, Macao & Sin    22.4                                                                      21.7
% reduction in bound rate, IMF = 0
Source:
Col. i-iii and colums v-vi from M. Finger et al. (1995): The Uruguay Round: tatistics on Tariff Concessions Given and Received;
Col. ii-iii, IMF; col vii and viii, Table 5
-32-



Table 7: The Evolution of Openness In Various Countries
Openness = (Total Exports+Imports minus fuels) I GDP
196549        1970-74        1976-79       1980-44          198549           1990-94
A. Latin America
I. Countries belonging to an effective RTA
Argentina                        0.09           0.10           0.16         0.15             0.12              0.11
Bolivia                          0.35           0.41           0 56         0.37             0.26              0.36
Brazil                           0.09           0.12           0.13         0.13             0.12              0.13
Colombia                         0.18           0.21           0.25         0.20             0.22              0.29
Costa Rica                       0.48           0.52           0.56         0.57             0.53              0.62
Ecuador                          0.25           0.31           0.32         0.21             0.27              0.36
El Salvador                      0.41           0.45           0.56         0.37             0.36              0.30
Guatemala                        0.30           0.31           0.36         0.26             0.27              0.31
Nicaragua                         na             na             na            na               na               na
Paraguay                         0.42           0.36           0.38         0.17             0.19              0.27
Peru                             0.25           0.21           0.23         0.20             0.21              0.19
Uruguay                                         0.44           0.48         0.34             0.44              0.41
Venezuela                        0.15           0.16           0.22         0.14             0.19              0.24
Mexico                           0.10           0.09           0.10         0.12             0.18              0.27
Sim. Aver.                       0.24           0.28           0.33         0.25             0.26              0.30
Sim. Aver.- Mex.                 0.25           0.30           0.35         0.26             0.26              0.30
II. Countries not meber of an effective RTA
Bahamas                          0.47           2.16           8.06         4.28             2.06              1.11
Guyana                           0.97           1.02           1.27         1.13             1.06              1.71
Jamaica                          0.54           0.57           0.61         0.76             0.68              0.83
Trinidad & Tobago                1.18           1.33           1.23         0.81             0.56              0.64
Sim. Aver.                       0.79           1.27           2.79          1.74            1.09              1.07
Countries belonging to an effective North-South RTA
Mexico                           0.10           0.09           0.10         0.12             0.18              0.27
Israel                           0.36           0.37           0.50         0.46             0.49              0.47
Turkey                           0.10           0.13           0.11          0.19             0.25             0.22
South Asia
Bangladesh                        na             na            0.16         0.18             0.17              0.20
China                             na             na             na          0.21             0.31              0.39
India                            0.08           0.07           0.10         0.09             0.10              0.13
Nepal                                           0.04           0.09         0.15             0.19              0.22
Pakistan                         0.22           0.20           0.23         0.23             0.25              0.29
Sri Lanka                        0.36           0.27           0.40         0.48             0.45              0.57
Simple Av.                       0.22           0.14           0.20         0.22             0.25              0.30
East Asia
Hong Kong                        1.15           1.08           1.17          1.23             1.44             1.45
Indonesia                        0.15           0.19           0.19         0.19             0.24              0.33
Korea                            0.28           0.41           0.50         0.54             0.56              0.47
Malaysia                         0.63           0.62           0.70         0.72             0.88              1.35
Philippines                      0.24           0.31           0.34         0.32             0.35              0.47
Singapore                        1.75           1.61           2.13         2.24             2.52              2.51
Thailand                         0.29           0.29           0.35          0.37             0.49             0.64
Taiwan                           0.39           0.33                                                           0.84
Simple Av.                       0.61           0.60           0.77          0.80            0.93              1.01
" minus HK & Singapore           0.33           0.36           0.42          0.43            0.50              0.68
"minus HK, Sing, Mal.            0.27           0.31           0.34          0.35             0.41             0.55
Middle East and North Africa
Jordan                             na            na             na           0.58             0.51             0.72
Syria                              na            na             na            na               na               na
Yemen                              na            na             na            na               na               na
Algera                           0.30           0.29           0.32          0.23            0.14              0.19
Egypt                            0.23           0.23           0.39         0.37             0.25              0.28
Libya                             na             na             na            na               na               na
Morocco                          0.29           0.30           0.35         0.34             0.34              0.35
Tunisia                          0.32           0.31           0.43          0.47             0.50             0.62
Simple Av.                       0.29           0.28           0.37          0.40            0.35              0.43
-33-



Table 7 Continued: The Evolution of Openness in Various Countries
Openness = (Total Exports+lmports minus fuels) / GDP
1965-69       1970-74      1975-79       1980-84      1985-89      1990-94
Gulf Oil Countries
Bahrain                         na            na           na          0.58          0.59        0.79
Kuwait                          na          0.18          0.33         0.41          0.31        0.31
Qatar                           na          0.20          0.29                       0.29        0.33
Oman                            na                        0.32         0.33          0.32        0.38
Saudi Arabia                    na          0.14          0.20         0.28          0.30        0.26
United Arab Emirates            na                        0.41         0.27          0.33        0.37
Simple Av.                      na          0.17          0.31         0.37          0.36        0.40
Africa
Benin                         0.20          0.30          0.35         0.38          0.30        0.24
Ethiopia                        na            na           na          0.22          0.20        0.16
Ghana                           na            na           na            na           na           na
Guinea                          na            na           na            na           na           na
Kenya                         0.42          0.45          0.50         0.45          0.37        0.46
Madagascar                    0.27          0.26          0.29         0.23          0.25        0.28
Malawi                        0.45          0.50          0.57         0.49          0.51        0.57
Mauritania                    0.45          0.68          0.00         0.55          0.90        0.92
Mauritius                     0.56           0.71         0.85         0.80          1.03        0.98
Nigeria                         na            na           na            na           na           na
Sierra Leone                    na            na           na            na           na           na
Tanzania                        na            na           na          0.24          0.24        0.47
Uganda                        0.31            na           na          0.28          0.15        0.19
Simp. Aver.                   0.38           0.48         0.43         0.40          0.44        0.48
Countries belonging to an effective PTA
Cameroon                      0.34           0.37         0.41         0.31          0.23        0.29
Cote d'lvoire                 0.57          0.57          0.59         0.60          0.55        0.58
Senegal                       0.38           0.45         0.58         0.63          0.45        0.32
South Africa                    na            na           na            na           na           na
Zimbabwe                      0.19            na           na          0.33          0.41         0.60
Sim Aver.                     0.37           0.47         0.52         0.47          0.41         0.45
Countries In state of war
Burundi                       0.19           0.20         0.28         0.26          0.27        0.32
Rwanda                        0.20           0.24         0.28         0.27          0.22        0.26
Somalia                         na            na           na            na           na           na
Sudan                         0.29           0.29         0.24         0.26          0.13         0.23
Zaire                         0.16           0.23         0.14          0.00         0.16          na
Sim. Aver.                    0.21           0.24         0.24         0.20          0.20        0.27
Notes: * Data refer to total trade, including fuel.
Sources: BESD for GNP and COMTRADE data base and IMF's DOT for trade data.
-34-



Policy Research Working Paper Series
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Its Impact on Economic Development Takehiko Hagino                            31001
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Intermediaries (with Particular                                               33526
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WPS1894 Applying a Simple Measure of Good  Jeff Huther              March 1998          S. Vaile
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WPS1895 The Emergence of Markets in the    Andrej Juris             March 1998          S. Vivas
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WPS1 896 Congestion Pricing and Network     Thomas-Oiivier Nasser    March 1998         S. Vivas
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