1. Introduction to regional trading arrangements: MFN and Article XXIV -- The recent move to regionalism -- Key terms -- 2. Simple measures of regional concentration in trade: Intraregional trade shares and what is wrong with them -- Concentration or intensity ratios -- The proximity school versus the discriminatory policies school -- 3. Importance of geographical proximity in trade: Why geography should be part of trade theory -- Three kinds of costs to doing business at a distance -- Indirect evidence on the importance of distance -- 4. The gravity model of bilateral trade: The technique of OLS regression -- The gravity equation -- Our results for the basic gravity variables -- Linguistic links -- The panel approach-pooling time series and cross-section -- 5. Estimated effects of trading blocs: Trading blocs in Europe -- Trading blocs in the Western Hemisphere -- Trading blocs in East Asia and the Pacific -- Trading blocs among other less developed countries -- Are regional trading arrangements trade-diverting? -- 6. Extensions of the empirical analysis: The importance of political factors in trade -- The importance of history -- The effect of cumulative foreign direct investment -- Rich and poor countries -- The role of currency links -- Bilateral exports and imports: the roles of relative prices and relative distance -- Econometric extensions -- 7. A model of trade in imperfect substitutes with intercontinental transport costs: The question of a rational for Article XXIV -- The Krugman versus Krugman debate -- The theory of trade with imperfect substitutes and transportation costs -- 8. Natural and supernatural trading blocs: The welfare implications of Free Trade areas -- Allowing for preferential trade arrangements on each continent -- How sensitive are the results to the assumption of trade based solely on variety? -- Welfare effects of regional blocs that do not coincide with continents -- The asymmetric formation of individual blocs, the terms of trade effect, and the symmetric noncooperative world equilibrium -- 9. Has regionalization entered the supernatural zone?: An estimate of physical shipping costs -- An estimate of intercontinental costs inferred from intraregional trade shares -- The preferred estimate of intercontinental costs from the gravity model -- An estimate of existing preferences from the gravity model -- Conclusion on the welfare effects of partial regionalization -- 10. A political economy survey of regionalism's effect on global liberalization: Stumbling blocks or building blocks? -- Stumbling blocs: negative implications of regionalism for multilateral liberalization -- Building blocs: positive implications of regionalism for multilateral liberalization -- Which effects appear to dominate in the trade data?