For more than a decade regionalism has been on the rise in the global economy. Based on the concept of allocative efficiency, standard trade theory regards regionalism as a form of protectionism. The paper confronts this view with an institutionalist explanation and draws on recent research on the role of specific investments into international market access, uncertainty and asymmetric information in policy coordination. A distinction between regionalism and regionalist policies is proposed. Endogenous regionalism reflects the economic forces of path-dependent comparative advantage and manifests the embeddedness of trade relations in social networks. Regionalism translates into regionalist policies via political entrepreneurship in policy networks that aims at stabilizing expectations about future market access and balancing negotiation power in a multilateral setting. Regionalism is thus presented as the standard case in global economic integration between the two extremes of unilateral liberalization and complete multilateralism.