Regionalism: a Lesser Form Of Globalisation - Essay Example

Regionalism: A Lesser Form Of Globalisation The present day erosion of the nation is most often linked to globalisation and the overwhelming influence it has had on the economic, social and political policies of these units. Governments are often portrayed as being at the mercy of transnational actors whose only loyalty is to their profit making abilities. Yet, in the wake of government's declining role in defining its economic and social policies it has moved towards the formation of regional organizations. Governments see regionalism as a far cosier option than the larger, scarier world of unlimited global relations, one that allows for governments to enjoy some of the benefits of transnational relations within a smaller more, homogenous area. In this sense regionalism is seen to provide a buffer against the run away train of globalisation, yet, as we shall see in many ways regionalism's aims quite often run parallel to those of globalism. Keohane and Nye (2000) define globalism as the "state of the world involving networks of interdependence at multicontinental distances."1 Regionalism, on the other hand, can be defined as the move by two or more states towards greater political, economic and social integration. Oman (1999) claims that it can be a "process, driven by the same microeconomic forces that drive globalisation or it can be a process, driven by political forces, which may in turn be motivated by security, economic, or other objectives."2 Both globalism and regionalism have the ability to stretch over the economic, social and political institutions of a country. The definition of regionalism has changed over the last twenty-five years. Dutta (1999) claims that since the end of the Cold War "regionalization has become more economic than political. The two international arrangements that dominated the political and economic dialogues over the past several decades have come to outlive their usefulness."3 The opening of the global economy and the intensity of change in technological areas since this time have resulted in an assortment of pressures upon states. States, in turn, are adapting to these pressures by taking part in regional trading blocs. For Habermas (2001) globalisation and its challenges must be offset by an expansion of political authority that reaches beyond the national but does not go to the extent of being global."4 In addition, Lupel adds, "If under conditions of globalisation the state has begun to lose its capacity to protect its people from the exigencies of the world economy, and if processes of globalisation have left influential forces beyond the steering capacities of the democratic nation-state, then political change is clearly on the agenda. The integration of separate nation-states into new political and economic units is seen as one way to respond to this new conjuncture."5 Regional ties differ from global ties in that they bring together groups of nations who share linguistic, cultural or historic similarities. They present an 'us' and 'them' scenario with the rest of the world. While the global community has no "ethical political self-understanding of citizens" a regional one does and according to Habermas that is essential for developing a sense of identity and solidarity.6 These regions may also give smaller countries a platform to push issues of their own concern. Oman (1999) claims that because bargaining power in multilateral trade negotiations depends largely on domestic market size a regional grouping should have greater bargaining power than any of its members would have individually.7 In addition, Fernandez Jilberto and Mommen (1998) state, "Regional arrangements provide external credibility for their own programmes of trade and investment liberalization, as well as wider market access, particularly in the protection-prone industrialized capitalist world.8 For many developing and smaller countries regionalism would serve to re-emphasise collective autonomy in relation to US and the EU economic policies.9 Aside from forming a sense of political identity and obtaining international bargaining power regional organizations can be claimed to carry many of the same economic benefits of globalisation, although to a lesser extent. The most notable benefit of regionalism is that of the advantage of economics of scale. Supposedly the formation of regional markets lacking in internal economic barriers would result in advantages of scale. In addition, with the combining of existing national markets small firms would have a more significant chance to grow.10 Although because regionalism is controlled by government bodies regional protectionism could come into play, limiting economies of scale and the growth of small firms to their fullest potential.11 Another similarity regionalism shares with globalisation is the weakening of entrenched special interest groups, rent seekers and oligopolies with the inclusion of outside competition. The controlling of or reduction of these groups can result in the strengthening of domestic growth and competitiveness.12 Dutta claims that in this sense, "globalisation and regionalization trends are not necessarily antagonistic or antithetical. The two processes are likely to reinforce each other when the same micro-economic forces drive them, because both disrupt and dilute the powers of oligopolies and special-interest groups."13 In addition regionalism, like globalism, pushes for the unification of low wage countries and source countries through geographical proximity. The FDI of American companies in Mexico under NAFTA and that of European countries in central Europe are two of the more prominent examples of regionalization uniting low wage countries with the FDI of first world countries. Fernandez Jilberto and Mommen (1998) claim, "This trend is reinforcing the regionalization process because the production and sourcing networks are operating just across the border."14 Despite the success of the EU up until now that does not mean that smaller scale regional organizations will have the same success. Numerous factors are working against them. In fact EFTA is perhaps the best example of a less successful free trade area set up by developed countries. Fernandez Jilberto and Mommen state "the failure of EFTA to stimulate trade between the member states was due to the fact that the small economies of EFTA had to look for export opportunities in the much greater European Community (EC) and therefore neglected intra-regional EFTA trade."15 There is also the question of inequalities between the states making up the regional organization. While citizens of developed nations may fear democratic instability of a member country or the spread of economic inequalities, underdeveloped countries may fear that the closer relations will only result in the entrenchment of the present inequalities between them. Witzel (2004) claims, "In the case of political reforms, countries are under pressure to adopt the forms of democracy, and indeed are often eager to do so. But how deep the democratic roots go, and how far the system is adapted to conform to local cultures, is another issue.16 In addition Hart (1994) claims of the NAFTA agreement, "While the North American corporate community clearly favours this integration, the many anti-NAFTA rallies and demonstrations in Canada, Mexico, and the United States gives strong indication that most working people do not."17 Despite the benefits proclaimed by those who support regionalism there are clear disadvantages. Regional organizations face pitfalls such as the lack of support by state's populations, and in the case of the smaller regional organizations a lack of influence and diminishing trade opportunities with the larger organizations, most notably the EU. The most notable of the disadvantages is that while regionalism shares some of the benefits of globalisation they are reaped to a much lesser extent. In fact, the parallels between the two show that, while regionalism may give a country greater bargaining power on the international scene, it promotes much the same end as globalisation; closer economic, social and political integration with other nations. More than a counter force regionalism is a slightly more agreeable and watered down version of globalism. Works Cited Breslin, S., Hughs, C.W., Phillips, N., Rosamund, B., (2002) New Regionalism in the Global Political Economy: Theories and Cases Routledge Dutta, M. (1999) Economic Regionalization in the Asia-Pacific: Challenges to Economic Cooperation Edward Elgar Fernndez Jilberto, A.E., Mommen, A., (1998) Regionalization and Globalization in the Modern World Economy: Perspectives on the Third World and Transitional Economies Routledge Habermas, J., (2001) The Postnational Constellation trans. Max Pensky MIT Press Hart-Landsberg, M., (1994, June) Post-NAFTA Politics: Learning from Asia Monthly Review, Vol. 46, pp. 12-22 Oman, C., (1999) Globalization, Regionalization, and Inequality Hurrell, A., Woods, N., Inequality, Globalization and World Politics Oxford University Press Keohane, R.O., Nye Jr. J.S., (2000) Globalization: What's New What's Not Foreign Policy, Spring pp. 104-124 Lupel, A. (2004) Regionalism and Globalization: Post-Nation or Extended Nation Polity, Vol. 36, pp. 153-175 Witzel, M., (2004) Coping with Globalization: Cross-National Patterns in Domestic Governance and Policy Performance Futures, Vol. 36, pp. 628-630 Read More