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The stumbling-bloc argument asserts that regionalism hinders MFN tariff cutting. If this was of first-order importance over previous decades, we should detect this in the levels of the tariffs. Using tariff line data for 23 large trading nations we find that MFN and PTA tariffs are complements, not substitutes since margins of preferences tend to be low or zero for products where nations apply high MFN tariffs. One interpretation is that regionalism is neither a building nor a stumbling bloc. Sectoral vested interests are a 'third factor' that generates the positive correlation between MFN and PTA tariff levels.

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This paper explores the growth implications of regional integration. Fro m the theory, it identifies the 'footprints' that such growth should leave in the data. It then checks the data on the four poor EU nations for such footprints. Prima facie evidence for Ireland, Portugal and Spain support the notion that EU membership induced investment-led growth, but Greek data reject it. This suggests that the integration of relatively poor nations into a rich trading bloc f a v o u r ed the poor nation's investment rates, however this was not stro n g enough to overcome poor macroeconomic management and market rigidities (which were features of the Greek case). (JEL Classification: F43, O4, F15)