'Regionalism is growing in importance.' Examine the evidence for this statement and analyse the impact for business.

Essay by trevoryuUniversity, Bachelor'sB, February 2009

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'Regionalism is growing in importance.' Examine the evidence for this statement and analyse the impact for business.

IntroductionThe global trading system is in a circumstance of potential crisis. Its main system, multilateralism has been impeded due to the trade barriers generated by the spread of regional trading agreements. The current proliferation of regionalism has already become prominent to some extent that nations feel that they are able to negotiate more at a regional level than a global level. In addition, since the trade liberalization has rapidly developed, the regional approach has formed increasingly. Countries find it less complex to commonly establish agreeable arrangements with their neighbours than with the full membership in the World Trade Organization (WTO). These elements put forward the question-what the condition of regionalism. This essay mainly focuses on the several reasons why regionalism becomes more and more important. Firstly, I will discuss the meaning of regionalism and the development of regional blocs in the play field.

Secondly, I will mention the reasons for the collapse of WTO and the growing of regional agreements. Finally, I will present an argument of how regional economic integration in part response to globalisation and the causes of deep integration arrangement. On the other hand, I will analyse how regionalism impact on business by emphasizing a dominant bilateral agreement established in the textile industry between the United States and Mexico, the benefits for the enterprises' growth and the 'spaghetti bowl' effect.

Main BodyFirstly, it is necessary at the outset to consider what the meaning of regionalism. Sajal Lahiri states that "Regionalism can broadly be defined as a tendency towards some form of preferential trading arrangements between a number of countries belonging possibly to a particular region." (1998, 1126). Preferential trade arrangements are to eliminate the barriers among its members. These...