An Evaluation of Trade Capacity Building Programs Regional Trade Agreements : A Tool for Development ?

In the past, regional trade arrangements (RTAs) among developing countries have not lived up to the hopes of proponents as vehicles for promoting efficient industrialization. Newer approaches, notably including low tariffs for countries outside the RTA, have more promise. RTAs with developed countries also are more likely to produce favorable results. Therefore, USAID should approach supporting RTAs among developing countries with care. There are advantages to assisting small countries through regional service centers or hubs so that USAID assistance does not have to rely on the narrower technical capabilities of small bilateral missions. Such regional hubs may be efficient tools for providing bilateral assistance. However, in the absence of clear benefits to regionalism, a hub is not a reason to promote regional integration or RTAs.