In spite of the mounting concerns regarding the rise in protectionism, the role of regionalism in the global economy is increasing in key areas, whether in trade, investment, or development finance. With respect to the regional integration arrangements according to the WTO, regional trade agreements (RTAs) have become increasingly prevalent since the early 1990s.
As of May 2018, 287 RTAs were in force, with recent trends in regional integration pointing to the widening scale of such arrangements via the formation of megaregional blocs. Furthermore, according to the IMF report the size of the regional financing arrangements has overtaken the resources of the International Monetary Fund as part of the Global Financial Safety Net (GFSN).
Indeed, the relative role of regionalism as the driver of globalization and economic integration may have increased substantially in recent periods. In the current conditions, regionalism is becoming the key source of liberalization impulses and economic openness in the global economy. This is corroborated by the active creation of new integration platforms by developing countries in all parts of the Global South, whether in Africa, South America or Eurasia.
The rise in regionalism may have further potential to unfold, particularly in the Global South, where many countries exhibit relatively high levels of trade barriers. The scope for regional South-South integration is also sizeable in view of the low base effects in terms of the number of alliances and the relatively high growth rates in key emerging markets, which raises the potential for forging such alliances. The prominence of regionalism in the world economy is further magnified by the emergence of mega-regional and trans-regional projects, such as Trans-Pacific Partnership (TPP), Regional Comprehensive Economic Partnership (RCEP), and BRICS+ that may be seen in part as an aggregation of the existing regional blocs.