Assessing RTAs in the Context of the Flying Geese Framework

Historical evidence suggests that development and trade are co-varying variables. Which one leads the other is the big question that has been debated at length in political economy. Trade isolated as an end in itself had never been a policy for any of the nations which are now counted among the developed countries of today. On the contrary, we see several different industrial strategies, institutional settings, going hand-in-hand with strategic trade policies. The linkages between trade and development are complex and have been extensively debated in the literature. We see this complexity clearly when we look at the earlier studies focusing on the impacts of trade liberalization and external integration. There is no consensus on the relationship between trade liberalization and development. The conclusion that increased trade is sufficient for development is controversial. The best that can be said is that a consensus that there is no consensus on a direct correlation between external integration and development. Rather, development is associated with several different strategies and policies depending on the political, social and economic structure of the country or the region.