About the data
6.6
GLOBAL LINKS
Regional trade blocs Definitions
Trade blocs are groups of countries that have estab-
important regional trade blocs and the size of intrare-
• Type of most recent agreement includes customs
lished preferential arrangements governing trade
gional trade relative to each bloc’s exports of goods
union, under which members substantially eliminate
between members. Although in some cases the pref-
and the share of the bloc’s exports in world exports.
all tariff and nontariff barriers among themselves
erences—such as lower tariff duties or exemptions
Although the Asia Pacific Economic Cooperation has
and establish a common external tariff for nonmem-
from quantitative restrictions—may be no greater
no preferential arrangements, it is included because
bers; economic integration agreement, which liberal-
than those available to other trading partners, such
of the volume of trade between its members.
izes trade in services among members and covers a
arrangements are intended to encourage exports by
The data on country exports are from the Interna-
substantial number of sectors, affects a sufficient
bloc members to one another—sometimes called
tional Monetary Fund’s (IMF) Direction of Trade data-
volume of trade, includes substantial modes of
intraregional trade. Most countries are members
base and should be broadly consistent with those
supply, and is nondiscriminatory (in the sense that
of a regional trade bloc, and the surge of countries
from sources such as the United Nations Statistics
similarly situated service suppliers are treated the
participating in such arrangements has continued
Division’s Commodity Trade Statistics (Comtrade) data-
same); free trade agreement, under which members
unabated since the early 1990s. While trade blocs
base. All high-income economies and major developing
substantially eliminate all tariff and nontariff barriers
vary in structure, they all have the same objective: to
economies report trade to the IMF on a timely basis,
but set tariffs on imports from nonmembers; pref-
reduce trade barriers among member countries. But
covering about 85 percent of trade for recent years.
erential trade agreement, which is an agreement
effective integration requires more than reducing tar-
Trade by less timely reporters and by countries that do
notified to the WTO that is not a free trade agree-
iffs and quotas. Economic gains from competition and
not report is estimated using reports of trading partner
ment, a customs union, or an economic integration
scale may not be achieved unless other barriers that
countries. Therefore, data on trade between developing
agreement; and not notified agreement, which is a
divide markets and impede the free flow of goods, ser-
and high-income economies shown in the table should
preferential trade arrangement established among
vices, and investments are lifted. For example, many
be generally complete. However, trade flows between
member countries that is not notified to the World
regional trade blocs retain contingent protections on
many developing countries—particularly those in Sub-
Trade Organization (the agreement may be func-
intrabloc trade, including antidumping, countervailing
Saharan Africa—are not well recorded, and the value of
tionally equivalent to any of the other agreements).
duties, and “emergency protection” to address bal-
trade among developing countries may be understated.
• Merchandise exports within bloc are the sum of
ance of payments problems or protect an industry from
Membership in the trade blocs shown is based
merchandise exports by members of a trade bloc to
import surges. Other barriers include differing product
on the most recent information available (see Data
other members of the bloc. They are shown both in
standards, discrimination in public procurement, and
sources). Other types of preferential trade agree-
U.S. dollars and as a percentage of total merchan-
cumbersome border formalities. In addition, becoming
ments may have entered into force earlier than
dise exports by the bloc. • Merchandise exports by
a member of a trade bloc can result in trade diversion,
those shown in the table and may still be effective.
bloc as a share of world exports are the bloc’s total
where a member switches from being a relatively effi -
Unless otherwise footnoted, information on the type
merchandise exports (within the bloc and to the rest
cient, low-cost producer outside a trade bloc to a less
of agreement and date of enforcement are based on
of the world) as a share of total merchandise exports
efficient, higher cost producer within a trade bloc. On a
the World Trade Organization’s (WTO) list of regional
by all economies in the world.
global scale this could lead to misallocated resources.
trade agreements. Information on trade agreements
Membership in a regional trade bloc may reduce
not notified to the WTO was collected from the Global
the frictional costs of trade, increase the credibility
Preferential Trade Agreements database (box 6.6a)
of reform initiatives, and strengthen security among
and from official websites of the trade blocs.
partners. But making it work effectively is challeng-
Some countries belong to more than one trade bloc,
ing. All economic sectors may be affected, and some
so shares of world exports exceed 100 percent. Exports
may expand while others contract, so it is important
include all commodity trade, which may include items
to weigh the potential costs and benefits of mem-
not specified in trade bloc agreements. Differences
bership. The table shows the value of intraregional
from previously published estimates may be due to
merchandise trade (service exports are excluded) for
changes in membership or revisions in underlying data.
Global Preferential Trade Agreement Database
6.6a
The Global Preferential Trade Agreement Database provides information on preferential trade agreements around the world, including agreements that have not been notified to the World Trade Organization (WTO). It is designed to help trade policymakers, scholars, and business operators better understand and navigate the world of preferential trade agreements. Updated regularly, the database currently covers more than 330 preferential trade agreements in their original language, which have been indexed by WTO
Data sources Data on merchandise trade flows are published in the IMF’s Direction of Trade Statistics Yearbook and Direction of Trade Statistics Quarterly; the data in the table were calculated using the IMF’s Direction of Trade database. Data on trade bloc membership are from World Bank (2000b), UNC-
criteria and can be downloaded as PDFs. Users can search by provision or keyword; compare provisions
TAD’s Trade and Development Report 2007, WTO’s
across multiple agreements; and sort agreements by membership, date of signature, in-force status,
Regional Trade Agreements Information System
and other criteria. The database was developed jointly by the World Bank and the Center for International
(http://rtais.wto.org/UI/PublicMaintainRTAHome.
Business, Tuck School of Business at Dartmouth College. It was supported by the Multidonor Trust Fund
aspx), and the World Bank and the Center for Inter-
for Trade and Development, with financing from the governments of Finland, Norway, Sweden, and the
national Business at the Tuck School of Business
United Kingdom. The database is integrated with the World Integrated Trade Solution database and is
at Dartmouth College’s Global Preferential Trade
part of the World Bank’s Open Data initiative (http://wits.worldbank.org/gptad/).
Agreements Database.
2012 World Development Indicators
353