Regional trade liberalisation: A theoretical review of dynamic time-path and stability issues

In recent years, the use of regional trade liberalisation arrangements (RTAs) has proliferated, while multilateral negotiations under the WTO have proceeded slowly, resulting in a debate over the roles of regional and multilateral liberalisation. This paper reviews the key theoretical contributions in the debate over RTAs, especially the recently developed themes addressing dynamic time-path and stability issues. However, due to the variety of motivations for RTA member countries to expand trading blocs and for non-members to seek entry, research has found few general conditions under which the formation of RTAs can become the 'stepping stone' or 'stumbling block' towards global free trade.