The Influence Of Regional Economic Organization On The World Free Trade

After the Second World War, economy globalization prevailing this world.Meanwhile, the realization of world free trade is a difficult process------especiallywhen the regional trade agreements increasing rapidly, and the importance of theregional economic organization(REO) becoming more and more outstanding------theprospect of this process is still vague.This paper analyzes the impact of the REO to global trade liberation based on the existed studies, obtains an explanation for the foundation of the REO. Different from Baldwin's "domino effect", the foundation of a REO not only make the non-staff countries to join in it for seeking maximum profit, it also cause the ceaselessformation of other REOs-----this also can called "domino effect", but we can notconfirm whether it would cause world free trade. And the conclusion is that the REO is a potential threaten to world free trade when it improve its staff's welfare, so the regionalization can not ensure the realization of global free trade. This paper also investigates the external effect of REO and its impact to its staffs and world trade empirically, concludes that the REO is the confirmation of the existed trade relationship. Compared to the traditional explanation factors, the explanation power of factor "the REO" to trade flow is still weak. Although so, REO still have influence on world trade: the country's tariff level continuously reduces when it joins in different REOs. Its economic freedom degree and trade freedom degree would also improve. But because the country's selective join based on the maximum of its welfare, one country join in many REO still can not ensure the realization of global free trade. At last, this paper discusses the fact of China's regional economic cooperation, and put forward a proposal about China's strategy to the regionalization.