Section I examines the implications of production sharing in the context of preferential trade liberalization. Of particular interest is the case in which a free trade area which is clearly trade-diverting under traditional circumstances, becomes trade-creating with joint production. Trade in...

This paper discusses an approach to "open regionalism" based on regional production networks and component specialization. Component specialization, or intra-product trade, has been shown to be welfare-enhancing. It creates jobs and raises output by improving competitiveness. It is one of the...

This paper examines the implications of cross-border production fragmentation in the context of regional integration, using both general- and partial-equilibrium approaches. It shows the conditions under which fragmentation converts a trade-diverting FTA into a trade creating one. It assesses...

Preferential trade agreements between dissimilar economies are known to encourage inter-industry specialization, but when they take place between developed and developing countries, they also change the nature of intra-industry trade by facilitating cross-border production sharing. When such...