The proliferation of preferential trading arrangements

This article examines some international factors contributing to the recent spread of preferential trading arrangements (PTAs). PTAs help states to ensure against future disruptions of commerce with key trade partners. When stress is placed on the international trading system, the threat of such disruptions rises. Both hegemonic decline and global recessions raise the specter of commercial closure, and therefore each factor may stimulate the proliferation of PTAs. Furthermore, strategic interaction among both PTAs and countries is likely to guide the growth of preferential arrangements. As PTAs become increasingly pervasive, states that are not covered by one have strong incentives to enter such an arrangement. Doing so reduces the prospect that their access to important markets will be curtailed and that their competitiveness abroad will be undermined. The findings of this article conform with these arguments. In general, eroding hegemony, global recessions, and strategic interdependence have accelerated the pace of commercial regionalism since World War II.