Regionalism and the GATT: The North American Initiative

Abstract

Reregionalism in Western Europe is now taken for granted by economists and politicians alike, who generally view as promising the further removal ofbarriers among countries in the European Economic Community (EEC) as envisaged in Europe 1992. Similarly, the U.S.-Canada free trade agreement, which entered into force on January 1, 1989, was generally applauded by those who believe in removing impediments to world trade. Now that the United States and Mexico have indicated their intention to pursue a free trade agreement, however, and President George Bush has outlined his vision ofeventual free trade throughout the Western Hemisphere, questions are being raised about the durability of the multilateral trading system in the face of growing regionalism. These developments coincide with the climax of the Uruguay Round of trade negotiations in the General Agreement on Tariffs and Trade (GATT), slated for completion in February 1991. These are complex negotiations dealing not only with the old agenda of tariffs and some nontariff measures, but also with a new set of priorities: agriculture, trade in services, trade-related aspects of foreign investment, protection of intellectual property, the phaseout of the