ECONOMIC INTEGRATION: AN OVERVIEW OF THE THEORETICAL AND EMPIRICAL LITERATURE (original) (raw)

International trade has been seen as the "engine of growth" both for developing and developed countries. Since free world trade is not a realistic possibility, economic integration is seen as a move towards free trade, despite criticisms from some quarters. The last decade has seen a dramatic increase in the number of preferential trade agreements (PTA). According to the World Trade Organisation (WTO), at least 100 regional arrangements had been formed by the end of 1994, nearly a third of them in the previous five years. As a result of the proliferation of PTAs, the share of preferential trade has increased considerably in 1990s, with one estimate putting it at 42 percent of world trade between 1993 and 1997.