A rchive Date
[ 15-02-2004 ]
Category
[ International Relations ]
sub-Categoy
[ Economics ]
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[http://www.igd.org.za/pub/g-dialogue/Opinion/global.html
The Regional and the Global in an Emerging World Order
Global Dialogue Volume 2.3 October 1997
The world wide proliferation and deepening of regional schemes during the past decade and a half, have been subject to various interpretations. Kato Lambrechts examines two main streams of thought following this phenomenon in an attempt to explain the interface between the global and the regional in an emerging world order.
The 1980s were characterised by a world wide proliferation and deepening of political, economic and security-oriented regional arrangements, in a wave that has since been termed the 'new regionalism'.
In addition to those well-known groupings such as the European Union, the North America Free Trade Area and the Association of Southeast Asian Nations, more than 100 other regional schemes are currently registered with the World Trade Organisation (WTO). It is also estimated that about 90 per cent of all WTO members are signatories to such arrangements.
At the same time, there is an increasing thrust from governments throughout the world to join the rules-based multilateral trading system and provide the necessary legal frameworks to allow a deeper integration of global economic space. The co-movement of these apparently contradictory processes and projects had elicited prolific debates in policy, government, academic and other circles.
Given that governments and societies throughout the developing world are both agents and recipients of this co-movement, and given the serious policy engagement of the South African government with both globalism and regionalism, some reflection on the regional and the global in an emerging world order seems appropriate.
One stream of interpretation following the proliferation and deepening of regional arrangements since the 1980s holds that the world trading system is fragmenting in the same way as it did in the 1930s. Its proponents mostly subscribe to the neorealist view that state interaction is based on competition for resources leading to zero-sum conflict.
As Europe, North America and Asia become 'fortresses', shielding 'insiders' from their most-favoured-nation obligations and excluding 'outsiders' from this refuge, the rules-based multilateral trading system that has developed under the General Agreement on Tariffs and Trade (Gatt), will become obsolete.
This will lead to a shift towards a tripolar system, with three blocs centred on Europe, the United States and Japan which would have free trade internally, but managed trade among them.
According to this perspective, as each regional power seeks to maximize its wealth and extend its territory, the risk of economic wars rises, because in a zero-sum world each regional power calculates that conflict will yield more benefits than cooperation. Concerns of those who favour the multilateral trading system, such as, that the expansion of regionalism could undermine the multilateral system should governments privilege regional arrangements in their allocation of economic resources and political capital, are entirely legitimate.
However, those who view an upsurge in regionalism purely as a sign of political and economic fragmentation of the global system display a narrow understanding of the complexity of the post-cold war world.
In order to engage in the debate on the interface between the regional and the global in an emerging world order, some degree of conceptual clarity will assist in unpacking the various arguments. Central concepts that need clarification include globalisation, regionalisation, globalism and open and closed regionalism.
Globalisation and regionalisation are not state-driven projects but, to draw on the apt description of Andrew Gamble and Anthony Payne, 'a complex articulation of established institutions and rules and distinctive new patterns of social interaction between non-state actors'.
These include processes that deepen the integration of global or particular regional economic spaces. Such integration can be measured by flows of trade, investment, aid and people.
Both processes are normally uneven in their impact, leading to the integration of certain places and sites, and the marginalisation of others. Regionalism and globalism, on the other hand, are state-driven projects, originating from the concerns of and detailed bargaining between policy-making elites in the 'core' states. Both projects aim to promote particular values and principles through regional and multilateral organisations.
The distinction between open and closed regionalism has informed the analysis of another stream of interpretation in the wake of the 'new regionalism'.
According to its proponents, elites driving the new wave or regionalism have reached consensus on the centrality of the market in welfare optimisation, the promotion of export development and the importance of attracting foreign capital. This is in stark contrast to the strategies of import-substitution industrialisation and the collective self-reliance promoted by regionalist projects during the 1960s.
The new wave of regionalism is not intended to rival the globalist project, but is rather viewed as a step towards achieving globalism in a world where United States hegemony is declining and there is no longer a single state with the authority and capacity to impose its leadership.
Resulting from this shift in thinking regarding the purpose of regional projects, proponents argue, a general trend towards 'open' regionalism has manifested. This is characterised by the non-discrimination in trade and investment terms of free trade policies implemented at a regional level against non-members, as well as a willingness to accept new members into the bloc if they are prepared to abide by the same rules of engagement as existing members.
Underlying these considerations is the dispute between the free trade and the 'strategic trade' argument.
Proponents of the latter hold that maintaining and improving international competitiveness will not automatically flow from a spontaneous specialisation of labour dictated by comparative advantage in free markets. Instead, states have to act strategically to protect key sectors to ensure that they become competitive. This debate used to be cast as that of developmental versus laissez-faire regionalism.
'Closed' regionalism, on the other hand, would slow down the globalist project, since it would entail the establishment of exclusive blocs, resisting outside pressure to speed up trade liberalisation in the region, thus leading to protectionism.
Few recent regional initiatives, according to the proponents of this interpretation, have shown these characteristics. A notable exception is the East Asian Economic Caucus, initiated by Malaysia to protect the interests of those east Asian countries dependent on United States markets that are also members of the Asia-Pacific Economic Cooperation (APEC) grouping, the latter a prime example of 'open' regionalism.
This interpretation does offer a more plausible view of the world as it is emerging after the decline of United States hegemony in terms of the interface between the global and the regional. However, it fails to recognise that, outside of the 'core' regions of Europe, North America and Asia and their immediate peripheries, many countries have not yet reached an advanced stage of industrialisation.
Concomitant to this, these countries are ranked at the bottom of the human development index. They still lack the social, political and economic infrastructure that would allow them to optimally benefit from the welfare gains theoretically brought about by trade liberalisation, whether at a regional or a global level.
For such countries, many of them members of the Southern African Development Community, regionalism is therefore not necessarily a first step towards integration into the world economy, but rather a means to address pressing structural social and economic development needs.
Regionalism then becomes, in the first instance, a mechanism through which to create economies of scale in the form of joint ventures in order to enhance competitiveness. It also becomes a mechanism through which economic infrastructure can be jointly established and maintained, allowing countries to benefit from larger markets.
Furthermore, it can become a way to harness the resources necessary to create the social infrastructure to address structural causes of poverty. In the final instance, not only does regionalism offer developing countries the opportunity to pool resources and jointly build capacity to engage with international forums such as the WTO, but it also enables them to exercise more influence in such forums by advocating common positions and through bloc voting.
It is therefore fair to conclude that the neo-realist spectre of zero-sum trade wars between exclusive regional blocs centring around the core entities of Japan, the United States and western Europe does not reflect the complexity or relations within and between these and other regional projects.
Rather, policy elites, both in developed (the European Union being the prime example) and developing countries, seem to view regionalism as one instrument, among others, to assist them in negotiating the terms and impact of both the process of globalisation and the project of globalism.
 World Fact Book (CIA)]
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