Does Multilateralism Crowd Out Intra-Group Trade? Evidence from Some Developing Regions

The literature is ambiguous on the nature of the relationship between multilateral trade negotiations and growth of intra-group trade. However, both the WTO and proponents of liberalization maintain that the relationship is positive and that the WTO supports regional bodies and intra-group trade. But does evidence support this? It is possible that the WTO supports regional bonding, while its existence discourages growth of actual trade and development of institutions within regions. Our findings seem to support this view, particularly for southern countries as shown by trends in intra-group trade captured in this work.