The causes of trade bloc formation Several reasons explain the recent emergence of trade blocs.

The socalled old regionalism was motivated by the desire to pursue in developing countries importsubstitution development at a regional level, to insulate a region from the world economy and to stabilise and foster the economy at a regional level. Political and economic considerations also played a major role, as in the case of the European Coal and Steel Community (ECSC, 1951) and the European Economic Community (EEC, 1957). The recent emergence of trade blocs (the so-called new regionalism) has been explained by various factors.3 Recognising the gains from liberalisation, it is often argued that concluding a PTA is politically easier than pursuing multilateral trade liberalisation agreements. It is easier to negotiate with few partners than with a large number of participants in the multilateral process as envisaged under the General Agreement of Tariffs and Trade (GATT)/World Trade Organization (WTO). Not only concessions can be more easily exchanged among a small number of countries, but effective enforcement mechanisms can also be agreed upon at a lower cost. The length and difficulties encountered during the Uruguay Round of GATT negotiations (1986-1994) is usually considered to have contributed to increase the attractiveness of the regional (i.e. preferential) path to trade liberalisation PTAs also allow trading partners to go deeper and faster in their liberalisation process, addressing modern trade barriers which are more varied, more complex and less transparent than standard tariffs and quotas traditionally considered under GATT Rounds. Preferential integration agreements can also entail elements beyond standard trade policy concerns, such as competition, investments, labour and capital market considerations. In other words, the fewer the number of participants to trade negotiations, the larger the number of issues on which it is possible to reach an agreement. Another claimed advantage of PTAs is that they may help ensuring the

credibility of the reform process undertaken by one or several members of the trade bloc. Indeed, trade