Regionalism and Globalisation - Essay Example

Regionalism and Globalisation Name Course Tutor Unit Code Date Introduction After the end of the Cold War, regionalism has been revived all over the world. There has been a notable increase in the number and salience of Regional Trade Agreements (RTAs). Appleyard et al (2008) reports that by July 2007, 380 RTAs had been reported to the World Trade Organisation (WTO), of which 205 started to operate on the same day. Apparently, the process of new regionalism cannot be reversed. Nonetheless, this development has evoked controversy especially whether regionalism is growing to be an impediment of bedrock to the process of globalisation. In this paper, I argue that regionalism is a strategic foundation towards globalisation. Regionalism and Globalisation Different parties perceive regionalism from different angles, such as political, economic, and security. However, in general, regionalism takes in three key attributes amid the member states: discernible geographical region, geographical closeness and an agreement fostering a common logic of identity and drive (political, economic, military/security). The reasons for piecing together regional organisations are varied. Karns and Mingst (2010) outlines effectiveness of mutual undertakings as one of the key reasons. For instance, the member states enjoy economies of scale from a regional economic integration. Another key reason could be for the regional intergovernmental organisations to improve regional governance and/or global governance, seeing as regionalism allows the member states to handle regional concerns that are interconnected to economic development, among others. As regards globalisation, notwithstanding the various definitions, the common theme of this process is to spawn more and more intense collaborations stuck between nation-states as well as societies through flows of goods, philosophies, currency, people, and information, among others, and in the process reducing the significance of territorial borders (Lamy, 2002). In light of this, the recent budding economic regionalism within globalisation appears contradictory, and has bred extensive scholarly curiosity in the link between them. Even though globalisation is apt to deemphasize borders, regionalism inclines towards an endeavour by member states to re-establish the borders at a different stage. In the end regionalism creates a different, wider space out of lesser nation-state boundaries that may not necessarily be a fresh political entity or super state. Nevertheless, this situation is perceived differently in the economic sphere. The process of globalisation, despite its limits and variations, is generating an all the time more separate economic realism that openly works together with national as well as regional economies. Regionalisation transpires at the edge between global economic and technological forces as well as national certainties. It is true that national actors possibly will recognise regionalism as a way to defend themselves from the competitive forces ascending from the process globalisation (Todaro & Stephen, 2012). Furthermore, regions are cast by the spill over of local circumstances across the national boundaries. However, new regionalism cannot be connected exclusively with national dynamics and be detached from the global environment. Instead, ‘‘the two processes of globalisation and regionalisation are expressed within the same broader process of global structural change’’ (Stiglitz, 2003). The conjoint interdependence or interaction flanked by globalisation and regionalisation is broadly recognised; indeed, deep-seated political economists do not contest this association. Amin (1999) argues that the antique expansion of capitalism embraces a gradual movement from the local stage to the global, and at for each step to form new divergent trends. For peripheral countries to advance their economic standing, they have had to detach themselves from the global arrangement and take on regionalism as a substitute, countervailing strategy. Extensive research studies have been conducted on the link between globalisation and regionalisation and there has been a heated debate by majority economists. Some perceive regionalism as a stumbling block to globalisation. However, there is a lot of evidence that regionalism is compatible with, or even lays concrete on the way for, multilateral trade liberalisation. Regional arrangements have the capacity to fortify export constituencies, lock in autonomous liberalisation, offer cover against failures, and inspire modest liberalisation. Regions dominated by export-oriented industrial firms have more concentration in realising returns to scale and in stimulating regional and international trade liberalisation. There may not be a clear depiction, but on a set of scales, there is an apparent backing for the argument that regional and international trading engagements are well-suited with one another (Weiss, 2000). It is true that quite a few regions are more open than others. Also developments among industries and regions differ. In a number of instances, trade within regions has stretched out more rapidly than between them. Lamy (2002) argues that economic globalisation does actually call for profounder regionalism. He observes the emergent role of foreign direct investment (FDI) plus the need it generates to streamline, specialize, and take part in network production. The extension of FDI has formed regional production and service groups envisioned to boost efficiency and trim down transaction costs. As a result of globalised FDI, regional integration has come to be more and more profound and moved away from preferential trade agreements (PTAs). This has led to a centre–periphery dissection that changes as economic growth spouts fit in new regions into the centre. Likewise, regions may well form and enlarge in reaction to one another since they typically have more amassed market power and therefore more bargaining power than their integral member states (Abbot & Snidal, 1998). For instance, a number of Latin American countries formed a PTA to expand their clout in discussions with the United States (U.S) and the North America Free Trade Agreement (NAFTA). Similarly, the EEC’s original member states held that its formation would improve their bargaining power in negotiations with the U.S. Also, members of the Central European Free Trade Area (CEFTA) held that its establishment would shore up their capacity to negotiate admission into the European Union (EU). Besides supporting economic, political as well as security/military collaboration, regionalism can consolidate state-building and democratisation. Regionalism can too help to deal with the undesirable effects of globalisation. Latest examples from Europe, Africa, the Americas and parts of Asia uphold this view. For instance, in the Association of Southeast Asian Nations (ASEAN) case, it can be said that regionalism gives fragile countries a foundation, supporting them to evade ascendency by leading powers or marginalisation by them. Also, from the time when (Asia Europe Meeting) ASEM was founded in 1996, the EU and ASEAN member states have improved collaboration in economic as well as human rights concerns. Moreover, the EU has set up dealings with the Common Southern Market (MERCOSUR) and initiated discussions with NAFTA on forming an Atlantic Free Trade Area (AFTA). As well, the U.S, as the leading representative of NAFTA, has embarked on talks with MERCOSUR aimed at boosting closer relations (Nesadurai, 2003). Various academicians and policy-makers have faith in that the more extroverted new regionalism will function as a springboard in the process of globalisation. Karns et al (2010) suggest that regionalism makes it possible for national-states to embrace cooperation and liberalisation in a manner that supports global initiatives. In addition, ‘open regionalism’, that is common in the Asia-Pacific is an example of coping with international revolution, in view of the fact that the recent economic depression shows that the states do not have the capacity nor the means to deal with global matters on a national level. Moreover, open regionalism is more fitting for regions with security glitches, such as the Balkans and the Black Sea Economic Cooperation (BSEC). Collaboration in the region enables national-states such as Greece, Turkey, Kosovo and Serbia, to focus on the progressive sides of economic collaboration and more integration, as opposed to war. In-any-case, profound transnational policy integration is not likely to come about devoid of the initial support from profound regional integration. For developing countries, involvement in regional cooperation organisations in conjunction with more advanced and experienced national-states is a footstep on the road to incorporation into the larger global organisation. Just like several European states that have used their involvement in the Central European Free Trade Agreement (CEFTA) as a foundation for EU membership, the BSEC is typically seen as a stepping stone in Turkey’s progress headed for European integration (Laursen, 1999). Conclusion In recent times, regionalism has emerged as a strong force in the process of globalisation. Given that globalisation can be looked upon as the firmness of the progressive and spatial facets of social relations, at that juncture regionalism may well be taken to be one factor/chapter of globalisation. Regionalism helps national-state economies to come to be more competitive, adopt liberal thinking regarding cooperation, and the open-up to the international market, thereby leading to multilateral cooperation on the global sphere. Accordingly, regionalism can be regarded as a portion of the international/global economic mandate; if driven by raw material forces (of the market), at that point it grows into a product and an element of globalisation. Furthermore, seeing as globalisation develops in irregular as opposed to even self-motivated forms, it possibly will tell itself in processes that are less than geologically universal in space. And so, globalisation may well be articulated through regionalisation (Damro, 2001). References Abbot, K., and Snidal, D. 1998. Why States Act through Formal International Organizations. Journal of Conflict Resolution 42 (1): 3-32. Amin, S. 1999. Regionalisation in Response to Polarising Globalisation, in Björn Hettne, Andras Inotai and Osvaldo Sunkel, eds., Globalism and the New Regionalism, Basingstoke: Macmillan Press 1: 54-84. Appleyard, D. R., Field, A. J. and Cobb, S. L. 2008. International Economics. 5th edn. Boston: McGraw-Hill Irwin. Beeson, M. 2011. Asian antinomies: East Asia’s continuing engagement with the global political economy, Globalizations, 7 (4), 451-454. Bhagwati, J. N. and Arvind, P. 1996. Preferential trading areas and multilateralism: strangers, friends, or foes? In J. N. Bhagwati and A. Panagariya, eds., Free Trade Areas or Free Trade? The Economics of Preferential Trade Agreements. Washington, DC: AEI Press. Damro, C. 2001. Building an international identity: the EU and extraterritorial competition policy. Journal of European Public Policy 8, 2 (April): 208–226. Karns, M. P., and Mingst, K. A. 2010. International Organizations: The Politics and Processes of Global Governance. 2nd ed. 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