The creation or the expansion of a Preferential Trade Arrangement (PTA), in general, hurts the non-member countries because of trade diversion. This could increase the pressure for protection in the non-member countries and, ultimately, worsen the member countries' market access in those...

This model shows that a microstate's decision to form, expand, or join a regional organization is based on reduced negotiating costs and increased bargaining power, rather than on the traditional costs and benefits of trade integration. Forming a regional grouping with neighboring nations may be...