Regionalism: Contraction or Expansion of Globalization? The Case of North American Free Trade Agreement (NAFTA)

Abstract

The main purpose of this study is to determine the impact of RTAs (Regional
Trade Agreement) on the trade relation between the member and the non member countries
of the agreement and also to determine the winners and losers in this relatively new form of
trade. In order to establish this impact the trade statistics such as export – import data,
foreign direct investment both inflow and outflow etc for the countries involved in the major
Regional Trade Agreements of the world (NAFTA, EU) before and after the formation of
the economic integration and the actual change in their trade relationship with the nonmember
countries have been taken. The research is based on regression analysis and
hypothesis testing conducted with the data obtained. Both intra bloc and extra bloc trade
data have been used to measure the trade collection and trade diversion of these countries.