weekof10april2006-thursday

happy easter!!

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Week of 10/4/06                                                                             Edition#1

 

Dear RegionsWatcher,

 

If this week’s entry were a song, I would probably commit a plagiarism by calling it “Big in Japan” after that 1982/3 hit by Alphaville.

 

No explanations really except to say that two articles—the first and the last—are predominantly about the growing desire of Japan to offset CHINA in its free-trade market promiscuity. So acute has the desire to beat the CHINESE been that the Japanese have seen it fit to establish what they call “the formation of a vast Asian economic free-trade zone that would cover about half the global population and rival the EU and Nafta markets.” This zone would comprise sixteen countries, including China and India.

 

The first reason given, if article one is anything to go by, is  in order to perform the platitudinous refrain that comes with regional integration: “accelerate East Asia’s economic integration”. It is estimated that the “combined economic output” would be 9.1 TRILLION US dollars. Let’s face it: this is not without reason, for this putative, or so-called, grouping would have, by way of population, a good 3bn people, which is just under half of the world’s population.

 

“Ambitious” is more than an understatement.

 

Already, Japan has concluded a number of economic partnership agreements, “which include not only free trade but also protection of intellectual property and other broader issues, with Singapore, Mexico and Malaysia”. So tells us AFP in article one.

 

As for the last article, entitled “New trade dan in land of rising sun”, we are given an insight into The [Australian} Age’s Deborah Cameron’s view of where Japan is going with these big ideas.

 

The article opens that Japan wants “Australia, New Zealand, China, India, and South-East Asia to join in an economic community that would eclipse one-to-one free trade pacts.”

 

While Australian officials, the article maintains, have expressed scepticism at the Japanese proposal, we, observers, are left to ruminate over the motivation for this deal. CHINA, CHINA, and more CHINA.

 

Even before the article touched on this, we oculd have guessed it for ourselves. After all, for how long have Japan and China not been competing with each other for goods and markets? While Japan has the “ferocious resistance of its agriculture ministry”, China has just simply gone ahead in a quasi-filibustering manner in a perfect epitome of what one observer called “market promiscuity”.

 

This is a strange game the two are playing, in RegionsWatch’s view, considering how pivotal both these two countries have been in dynamising the ASEAN region. No-one can deny the immense benefits the SMEs of both these two countries have brought to the ASEAN region. That they refuse to join ASEAN in a formal sense, one suspects, stems more from solipsistic desires of protecting their markets. By forming ASEAN-Plus groupings instead, they are able to maintain their quasi-hegemonic status in the region.

 

Article number two is a funny gem: India wanting to expand its ties with the ECOWAS region. This is interesting to note-not just because India is also keen to expand its hegemonic status and, by extension, its tentacles throughout Africa in the manner akin to the Chinese, but also because India is in itself very keen to join the ASEAN market in a special relationship. ASEAN , clearly, is all the rage these days.

 

Whilst the UN and its regional commissions meet over North African integration efforts (article#4), we can sigh a hugh sigh of relief that North Arfrica, thanks to the UN, is getting its act together-finally.

 

As for protests and Latin America, these days, the two are almost mutually exclusive. It is little wonder, therefore, that we find that protests have marred the meeting of the Inter-American Development Bank, a bank based in Washington D.C., seeking—so goes its mandate—to act as a “key source of funding for government projects while expanding loans to the private sector…”

 

If this article is anything to go by, it appears that much like the World Bank, the IDB is more a source of frustration than one of hope-building for regional integration efforts in the region.

 

Happy Regions Watching!

Emmanuel.K.Bensah

RegionsWatch Creator/Editor

 

 

 

ARTICLES

 

1. Japan pushes massive Asian free-trade zone
2. India to expand trade ties with West Africa
3. Violent protests disrupt IDB's opening ceremony
4. Experts meet on North African integration
5. New trade dawn in land of rising sun

 

1. Japan pushes massive Asian free-trade zone

From: http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=80270&version=1&template_id=48&parent_id=28

 

Published: Wednesday, 5 April, 2006, 11:58 AM Doha Time

TOKYO: Japan said yesterday it will propose the formation of a vast Asian economic free-trade zone that would cover about half the global population and rival the EU and Nafta markets. The 16-nation proposal would include China and India, the world’s two fastest growing major economies, along with the 10-member Association of Southeast Nations (Asean) and Australia, Japan, New Zealand and South Korea. The push comes as Japan’s relations with its biggest trading partner China remain tense and it worries that it is slipping behind in securing bilateral free-trade pacts with Asian countries. Japan will propose starting negotiations in 2008 for the conclusion of the pact in 2010, Trade Minister Toshihiro Nikai told reporters. He is set to present the idea formally at a governmental economic council meeting on Friday. “The first reason for this is to accelerate East Asia’s economic integration which is already in the process of happening,” said trade ministry official Takeshi Fujimoto. The East Asian Economic Partnership Agreement could form a market larger than the North American Free Trade Agreement or European Union, grouping 3bn people or about half of the global population. Combined economic output would be $9.1tn, one quarter of the world figure, according to 2004 data. Some pundits were skeptical of such an ambitious plan in such a divided region, especially with China and South Korea ever mindful of Japan’s wartime record and quick to be suspicious of its motives. “There is no way this could be realised soon,” said Kenichi Odawara, an author and former professor of international politics and economy. “Plans for an East Asian community have come and gone many times in the past decades but the worst (problem) was Japan, which wanted to export industrial products while protecting its agriculture.” Odawara noted the Japanese plan “does not include Taiwan, whose economic presence is significant”, out of fear of angering Beijing which sees the island as an integral part of China. The top-selling Yomiuri Shimbun reported yesterday that Japan would propose the free-trade bloc as it has been lagging behind China and South Korea in concluding free trade pacts in the region. Fujimoto, the trade official, said Japan was not necessarily lagging behind but that “South Korea and China are active in drawing up strategies or setting up goals to form economic partnerships” in the region. “Japan should not be late in this trend and needs to lead economic integration in this region,” said Fujimoto, who is in charge of promoting economic partnerships with other nations. Japan has concluded economic partnership agreements which include not only free trade but also protection of intellectual property and other broader issues, with Singapore, Mexico and Malaysia. – AFP

 

Gulf Times Newspaper, 2006

2. India to expand trade ties with West Africa

From: http://timesofindia.indiatimes.com/articleshow/1477855.cms

 

NEW DELHI: India will discuss the expansion of its economic engagement with West African countries when a nine-member delegation from the region holds talks with President A.P.J. Abdul Kalam here on Wednesday.

The delegation from the Economic Community of West African States (ECOWAS), headed by Aichatou Mindaudou, Niger's minister of foreign affairs and cooperation and African integration, will also meet Minister of State for External Affairs Anand Sharma and discuss ways to boost India's trade with West African countries.

The ECOWAS delegation is likely to urge India, an observer at the regional trade forum, to step up its investment in infrastructure, including a rail project, in West Africa.

"The meeting will help define the roadmap of future relations between India and West African states and possible development of initiatives for closer political and trade cooperation and cooperation in multilateral forums," external affairs ministry spokesman Navtej Sarna told reporters here on Tuesday.

 

ECOWAS, a regional organisation comprising 15 nations, was formed in 1975 to achieve economic integration and shared development so as to form a unified economic zone in West Africa.

Later, its scope was enhanced to include socio-political interaction and security issues.

India's relationship with ECOWAS received a boost recently through the implementation of a slew of high profile projects funded through bilateral lines of credit under the Techno-Economic Approach for Africa-India Movement (TEAM-9) and New Partnership for Africa's Development (NEPAD) initiatives.

Bilateral trade with the ECOWAS region currently stands at $2.11 billion and accounts for 27 percent of India's total exports to Africa and 18 percent of the country's total imports from the continent.

3.  Violent protests disrupt IDB's opening ceremony

From: http://www.mercurynews.com/mld/miamiherald/business/14255385.htm?source=rss&channel=miamiherald_business

 

 

Debt relief was the main theme at the Inter- American Development Bank's annual meeting, but violent protests marred the opening ceremony.

BY ALAN CLENDENNING

Associated Press

ERALDO PERES/AP

PROTEST: Cacique Evara Mirin, of the Guarani tribe, smokes a pipe while camping out in front of the National Congress building in Brasilia, Brasil, Tuesday.

More photos

BELO HORIZONTE, Brazil - THREE LINES FOR MBZ 04IDB

Bolivian President Evo Morales led a handful of impoverished Latin American countries seeking sweeping debt relief at a key regional economic forum on Monday, but violent protests marred the start of the event.

As senior finance officials from 47 nations opened the Inter-American Development Bank's annual meeting at an elegant state government palace, hundreds of protesters opposed to the bank's lending practices clashed with police at two sites more than a kilometer from the gathering, local media reported, with two police officers and a photographer injured.

The protesters also trashed the reception area of a building owned by Companhia Energética de Minas Gerais, one of Brazil's largest utilities, and a recipient of IDB loans. Critics of the bank say it gives too many loans that benefit big business and don't help Latin America's masses of poor.

Four police officers and four private security guards were injured in that clash, CEMIG spokesman Laudo David told the newspaper Estado de Minas. Protest organizers said an unknown number of protesters were injured and 10 were taken into custody by authorities.

Morales, a strident leftist who took office in January, and Honduras' newly elected leader are expected to lobby hard at the three-day meeting for the bank to forgive as much as $3.5 billion owed by the Andean nation, Guyana, Haiti, Honduras and Nicaragua.

Morales said debt relief is needed to help Bolivia ease the misery of the 67 percent of the nation's 8.5 million citizens living in poverty. The country owes $1.6 billion to the IDB and Morales wants the entire amount forgiven.

''We want to end this exclusion and this marginalization,'' Morales said. Bolivia's ``poor and its Indians only want to live decently.''

But Latin America's two biggest powerhouses -- Brazil and Mexico -- are balking at supporting the write-off unless richer nations foot the bill.

The bank is owned by its member countries, mainly from the Western Hemisphere, but it also includes European nations, plus Japan, Israel and South Korea.

Morales, the country's first Indian leader, will rub shoulders with Honduran President Manuel Zelaya, a wealthy agricultural landowner, who also took office in January.

Brazil is to head a special committee charged with coming up with a financing solution for the five-nation debt relief package by the end of the year, said Clay Lowery, the U.S. Treasury Department's assistant secretary for international affairs.

Lowery said the U.S. delegation is proposing a complicated structured-financing arrangement that will relieve debt while not hurting the IDB's balance sheet. If that method is adopted, the debt would not be paid by the rich nations.

Another prickly topic emerged on the sidelines of the forum: Bolivia's plan to nationalize its vast natural-gas resources and how that will affect Petróleo Brasileiro, Brazil's state-owned petroleum company.

Morales campaigned to wring more profits from the foreign gas producers and Petrobras is a major producer in Bolivia, where production was privatized in the 1990s. Brazil is Bolivia's biggest gas client.

The Bolivian leader is seeking to convince Brazil to increase investment in Bolivia's gas production and accept higher prices.

But negotiations have stalled over Morales' vaguely defined plan to nationalize gas resources.

Morales met Monday with Marco Aurélio Garcia, the special advisor for international affairs of President Luiz Inácio Lula da Silva. Garcia said the two sides agreed to resume talks, but he did not offer details.

Delegates at the IDB meeting, one of Latin America's most important annual economic forums, will discuss how the bank can improve the region's crumbling infrastructure, boost economies, promote regional integration and improve living standards for Latin Americans and Caribbean citizens living in misery.

Luis Alberto Moreno, a longtime Colombian ambassador to Washington elected last year to a five-year term as head of the bank, is overseeing the meeting for the first time.

Moreno wants to maintain the Washington, D.C.-based bank's role as a key source of funding for government projects while expanding loans to the private sector, a move the United States supports. He also advocates small-scale Latin American development projects for the region's poor that can serve as examples for more expensive efforts.

The IDB's mission is to foster sustainable economic and social development in Latin America and the Caribbean through low-interest loans, leadership in regional initiatives, research, education and other programs.

4.

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4. Experts meet on North African integration

From: http://www.angolapress-angop.ao/noticia-e.asp?ID=430349

Rabat, Morocco 04/05 -- The 21st meeting of experts of the Intergovernmental Committee of the UN Economic Commission for Africa (ECA) Office for North Africa opened here Tuesday to review regional integration programmes.

The two-day meeting gathers representatives of UN agencies, multilateral, regional and sub-regional organisations, representatives of the private sector, training and research institutions, as well as NGOs.

The issues on the agenda include economic performance of North African countries in 2005, development of regional economic organisations, trade aspects of regional integration, judicious water management challenges and sustainable environment.

The outcomes of the meeting will be submitted to the next conference of African ministers of finance, planning and economic development slated in Ouagadougou, Burkina Faso, from 10 to 15 May.

5. New trade dawn in land of rising sun

From: http://www.theage.com.au/news/business/new-trade-dawn-in-land-of-rising-sun/2006/04/04/1143916528943.html

By Deborah Cameron
April 5, 2006

AdvertisementAdvertisement

JAPAN wants Australia, New Zealand, China, India, and South-East Asia to join in an economic community that would eclipse one-to-one free trade pacts.

It would be the world's biggest trade zone and marketplace adding about ¥25 trillion ($A300 billion) to the economies of the participating countries, according to Japan's Ministry or Economy, Trade and Industry.

Tokyo has seized on the idea, which is expected to be unveiled later this week, to counteract the buzz about China which has set the pace for trade pacts.

Japan's Economy, Trade and Industry Minister, Toshihiro Nikai said he wanted talks on the region-wide agreement to start in 2008 and conclude by 2010. "Trying to launch such negotiations as well as trying to conclude them might be considered ambitious," said Takeshi Fujimoto, a ministry official.

"But with discussions for east Asian economic integration on the rise, we don't think it's something you should spend a lot of time studying."

The contest between Japan, the region's largest economy, and China is an inescapable fact in the debate. China has also advocated a new Asian economic zone and the two countries would be rivals for the leadership of any new community.

The two countries are a study in contrast. China has raced ahead signing free trade agreements, while Japan faces the ferocious resistance of its agriculture ministry.

Only last week China said that it wanted progress on a Free Trade Agreement with Australia to be speeded up. Meanwhile, talks on free trade between Australia and Japan, our biggest trading partner, are still in the feasibility stage. Both nations want to conclude the initial phase by the end of the year, but an Australia-Japan free trade deal remains years off, according to officials close to the talks.

With Japan unable to quickly conclude one-on-one trade negotiations with friendly countries, a deal that involves 15 neighbours will take a mind shift by Japanese negotiators. But the involvement of Japan's economy and trade minister, Mr Nikai, as the political salesman for the new plan points to the seriousness of Tokyo's intent, as he is widely viewed as the cabinet minister with the best connections in China.

Australian trade officials have expressed scepticism about the Japanese proposal. "It would be very complicated to negotiate a free trade agreement with all those countries," said a spokeswoman for Trade Minister Mark Vaile. "The Japanese haven't spoken to us about this. We look forward to speaking about it in the lead up to the east Asia summit later this year."

Last year Foreign Minister Alexander Downer floated plans for the ASEAN group to form a single-east Asian community.

- With TIM COLEBATCH

 

 

RegionsWatch News: Week of 3 April--Tuesday: MEXICO/MERCOSUR; MULTILATERALISM;

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Week of 3/4/06 Edition#1



Dear RegionsWatcher,



After almost an interminable period of pruning and re-pruning, I am glad to say that the month of April has seen the re-taking off of RegionsWatch news.



There have been so many developments that I cannot capture here, such as the transformation of the ECOWAS regional grouping from a Secretariat into a commission, plus the huffing and puffing of Europe over Russia’s controlling of GazProm. Chavez becoming more explicit about his desire to root out whom he calls the imperialists—yes, the Americans—is also making welcome news to those progressives among us who see the Bush administration as an exponent of the most malign and amoral Realpolitik.



But that is another story…



Today’s articles are few, but many in their scope and ramifications.



The first article, penned by Laura Carlsen, is a useful insight into the mind of Mexico-president Vicente Fox, NAFTA, and MERCOSUR.



Let us just say that Mexico is being seen as a promulgator – of sorts – of the type of liberalisation that is akin to the US and its involvement of any type of regionalism. Not to say that NAFTA is any kind of regionalism, but I think you might quite remember that it has been in existence since 1994, and is seen as one of the longest-running trade agreements between Canada, the USA and Mexico that has paid dividends mostly to the US and Canada, but not always so with Mexico.



To this end, Fox is keen to promulgate the free-trade theory underpinning the NAFTA model and extrapolate it to Mercosur, and he sees joining MERCOSUR as way of doing this, but it is clear that the aficionados of MERCOSUR are not quite ready to see this development become a reality. That Mexico is considered as one of the biggest exponents of “market promiscuity”—having penned trade agreements with 42 countries—does not help stem the perceived image that it is a “Trojan horse”.



Article#2 is a reminder that Latin America might just have to work a bit harder on its regional integration efforts.



It is interesting to note that Chile’s Foreign Minister, Ignacio Walker, is the one pushing forward the idea of multilateralism. Interesting because although many of you might already know that CHILE has been an associate member of MERCOSUR (since 25 June 1996 -- http://www.hartford-hwp.com/archives/42/010.html), and has been one of the more successful economies in the region by virtue of much liberalisation, and a dogma that is more akin to that of neo-liberal America, when it comes to markets, it concedes here that there needs to be “political will and strategic alliances.”



Even to the extent of citing not just the EU and ASEAN, but even the African Union as examples of regional integration working! Wow…



Bearing in mind that each region has a specificity to which it must adhere, it is regrettable, after all Walker has said, that Chile being the Associate member of MERCOSUR wants a MERCOSUR modelled on the EU. But then again, so did the founders of the African Union!



The final article serves to remind us that the academic debate over regionalism is an ongoing one—the age-old argument of why states chose to become involved in regional integration projects is proving to be one that will not go away. And with good reason.



With the number of political theories out there – from Constructivsm to Neo-Realism – small wonder. Constructivists, as the article maintains, “are interested in the construction of identities and interests”, whereas the Neo-Realists are more interested in regionalism as a response “…to the existence of an actual or potential hegemonic power.” It is also considered as a way of improving the balance of power. Whichever theory one may chose, what is underpinning any of these theories associated with regionalism is the idea of a “socially constructed concept of a region.”



Populations and well as regional identities are seen as key in understanding the processes surrounding regional integration. Populations because there will be some parts of the population that will be more in consonance with an aspect of regional integration—be it the social integration, or the “fiscal elements”, and thus the needed collaboration of all members of the group to “increase overall wealth in the region.”



Good to be back!

Happy Regions Watching!

Emmanuel.K.Bensah

RegionsWatch Creator/Editor





DATES TO WATCH OUT FOR:







1. UNU-CRIS/DPA Seminar "Conflict Prevention and Peace-Building in the Regional Context" (Bruges, 28-29 April 2006)



Following the UN-DPA Working Group meeting, UNU-CRIS will also host the UNU-CRIS / UN-DPA seminar on "Conflict Prevention and Peace building in the Regional Context" in Bruges, Belgium, on the 28 and 29 April, related to the cooperation between the UN and regional and other intergovernmental organizations on conflict prevention and peace building.



Participants to this seminar will include senior officials and representatives from regional and other intergovernmental organizations, research experts from the different organizations in focus, UN officials and academics, who will discuss the implementation of the 13 modalities on conflict prevention which the Third High-level Meeting approved in 1998 and the framework for peace-building approved at the Fourth High-level Meeting in 2001.



Important inputs to the seminar are the results of a joint UN interagency mission on conflict prevention and peace-building which visited ECOWAS from 5 to 7 February 2006. Other agenda items include the presentation of the UN interagency cooperation on conflict prevention and its possible interaction with regional, sub-regional and other intergovernmental organizations.



This seminar will take place in the College of Europe, Room E, in Bruges, Belgium. For further information on the programme please contact Ms. Tânia Felicio (tfelicio@cris.unu.edu) and Ms. Eveline Snauwaert (esnauwaert@cris.unu.edu).

Please click here to consult the tentative programme.







ARTICLES

1. México and Mercosur: A Trojan Horse?
2. World Should Move Towards Multilateralism
3. if regionalism undermines the sovereignty of states, why do so many states join regional organizations?




1. México and Mercosur: A Trojan Horse?
From: http://americas.irc-online.org/am/3019



By Laura Carlsen | January 9, 2006

Translated from: México en el Mercosur: ¿Un Caballo de Troya?
Translated by: Katie Kohlstedt






Americas Program, International Relations Center (IRC)
americas.irc-online.org



Mexico's absence was noted in the most recent meeting of Mercosur. Neither President Vicente Fox nor Foreign Relations Secretary Luis Derbez, invited to represent the second-largest economy in the region, attended the event in Montevideo, citing previous commitments. For many observers, the real reason they left the duty to the Mexican Ambassador to Uruguay was to avoid the obligation to congratulate Venezuela and President Hugo Chavez on its induction as a member of Mercosur. Mexico and Venezuela mutually withdrew their ambassadors in November due to a difficult ‘conflict of ideas' resulting from the Fouth Summit of the Americas in Mar del Plata.

The President and Chancellor of Mexico were invited as observers to the Mercosur Summit. Mexico presented its formal application for addition to Mercosur as an Associated Nation at the summit in Puerto Iguazú in July 2004. However, the follow up on the application was weak, showing Mexico's vision of a future more based upon their northern relationships as part of NAFTA.

The 2005 Summit of the Americas in Mar del Plata, Argentina, highlighted the distances between Mexico (faithful promoter of the U.S. proposal for the creation of the Free Trade Area of the Americas) and the countries of Mercosur, who rejected the proposal to put the FTAA on the Summit's agenda.

Despite the differences exposed at the Summit, a day later President Fox expressed his peculiar version of the relationship, declaring, “My love for these agreements is complete and encompassing, Mercosur and the FTAA... and I will continue to pursue and to love them.” Mexico has signed free trade agreements with 42 countries, but this market promiscuity has had little benefit for the Aztec-rooted country, which has shown a negative balance of trade in the last seven straight years.

In a letter addressed to the Uruguayan President on December 2nd, the Mexican government emphasized its desire to be integrated into Mercosur, saying that “Mexico wants to be a part of the integration efforts that Mercosur promotes.” It emphasizes the need to create economies of scale, as a result of its own incorporation, “Mexico's participation as an Associated Nation of Mercosur will contribute to the strengthening of Latin America and its positioning on the international market.” Also mentioned was that “an important step in the process of Mexico's association with Mercosur consists of reinforcing political dialogue oriented at democratic consolidation.” Mexico openly expresses its desire to participate in Mercosur's Forum on Consultation and Political Agreement.

These two goals (participation in the political decisions made by the block as well as forging a larger commercial block) raise many questions. What is Mexico looking for with its integration into Mercosur? After its role in the Fourth Summit, some see Mexico's insistence on democracy as another attempt to promote the U.S. agenda and new campaign to connect ‘liberty' with free trade and attacks on countries that do not share its world vision (most of all Venezuela) for the south. On the other hand, Mexico's persistence in promoting commercial blocks with leanings towards massive global trade liberalization contradict some versions of the plans of Mercosur, which lean towards national and regional economic strengthening as a basis to improve competitiveness on the world market.

Perhaps it is an exaggeration to say that Mexico is a Trojan horse presented to Mercosur representing U.S. interests. However, without a doubt their application pushes a model of economic integration that is important to evaluate carefully. Before leaning more towards NAFTA, Mercosur has the task of refining its own criteria in order to redefine a new integration strategy that today does not seem to have found its new course.

Translated for the IRC Americas Program by Katie Kohlstedt.




2. World Should Move Towards Multilateralism
From: http://www.bernama.com/bernama/v3/news_lite.php?id=176496
KUALA LUMPUR, Jan 19 (Bernama) -- The international community should move towards multilateralism in solving world issues, said Chile Foreign Minister Ignacio Walker.

In this context, he said, there was a need for political will and strategic alliances among world groupings.

Walker said strategic alliances among like-minded countries and groupings for example the African Union (AU), Asean, European Union (EU) as well as others could help the world to move towards multilateralism and make it work in international relations.

He said Chile always held to multilateralism when it came to issues such as Iraq which was attacked by the United States through its unilateral decision despite opposition by majority of the international community.

"Iraq is unilateral versus multilateral. I think that is not the way in this global era," he said in his lecture and dialogue entitled "Chile, Asia-Pacific and the World" organised by the Asian Strategy and Leadership Institute (ASLI) here Thursday.

On Latin America, Walker said the region lagged behind in regional integration compared to other regions in the world.

He said they failed to produce some kind of integration scheme although seeds of integration existed such as the Mercosur -- a trading zone between Brazil, Argentina, Uruguay, Paraguay and Venezuela and also the Andean Group -- a trade organisation comprising several Latin American countries.

"For 200 years, we have been talking of integration but achieving almost nothing beyond rhetoric," he said.

Walker said in order for Latin America to create an union like the European Union, it must have integration on several aspects such as integration in infrastructure like roads, energy integration and also in the area of free trade zones.

-- BERNAMA
3. if regionalism undermines the sovereignty of states, why do so many states join regional organizations? http://blogs.warwick.ac.uk/theliberalist/entry/if_regionalism_undermines
This is a WP esssay by Tom Callow.

If regionalism undermines the sovereignty of states, why do so many states join regional organisations?
Within the last decades or so, there has been a significant increase in regional integration. Between 1990 and 1995, thirty-three agreements concerning some form of regionalism were created, which is nearly three times the number signed in the previous ten-year period from 1980 to 1989 inclusive . Indeed, the Comparative Regional Integration Studies department at the United Nations University in Belgium has a Regional Integration Information System that lists fifty-four regional organisations across the world, with a total cumulative membership of 188 countries (from a total of 211 entities that have been defined as ‘countries’) . However, many sources have argued that regionalism depletes state sovereignty, showing that in the case of the European Union (EU) for example, decisions particularly in the areas of agriculture, trade negotiations, money and credit have been significantly shifted from individual states to the EU . The question then arises, why do states enter into such agreements when a loss of sovereignty or control seems inevitable? What advantages does a state benefit from by being member of such an organisation? There are several points that are frequently raised in response to these two questions, including economic integration, reduction or removal of trade tariffs and the increased ease of transnational movement for citizens. In this essay I will develop each of these arguments, among others, in explaining the central motivations for states to participate in regional integration. I think it is important to state that I intend to focus on regionalism specifically, that is to say the lawful, state-instigated process of regionalism, with less emphasis on what Breslin, Higgott and Rosamond (2002) describe as the more “de facto, market driven” , process of regionalisation.

In order to gain some idea of why states join regional join regional organisations, it is important to gain some idea of the history of regionalism as a theory and a movement. The first wave of regional integration began after the end of World War Two, when the idea of the state as the sole means of national governance came under doubt. It was felt that Germany needed to be integrated into the future of Europe, along with other European countries to ensure that such an uprising could never happen again. The Treaty of Paris was signed in 1951 and resulted in the formation of the European Coal and Steel Community (ECSC) and one of the Treaties of Rome in 1957 resulted in the creation of the European Economic Community (EEC). The first of these communities can be related to the original idea of functionalism , whereby a body was set up to deal with the matter of European coal and steel production exclusively. This concept relates closely to much of the theorising on regionalism in the latter part of the first wave in the 1960s and 1970s, where regionalism was often analysed in terms of social, economic, political and organisational cohesiveness . The emphasis here is on the state-centred notion of regionalism, whereby acts of regional integration are initiated by state activity. As theories progressed, there was a realisation that it was difficult to operate on an entirely functional level (e.g. as the ECSC was aiming to do) without any interference in the political or economic spheres. The protagonist of such thought was Ernst Haas, who championed the concept of neo-functionalism , where all functional organisations would inevitably operate as territorial groups, involved in a wide spectrum of regional issues, be them political, economic, social or organisational. Haas also argued that such regional bodies would eventually surpass the state system, assuming a more regional control. Hurrell (1995) emphasised the important of collaborative organisational behaviour, saying: “A great deal of regionalist activity involves the negotiation and construction of interstate or intergovernmental agreements or regimes.” However, just over a decade after publishing his theory on neo-functionalism, Haas altered his perspective to a more realist viewpoint, submitting that the European model in particular did not conform to his initial organisational theory. The national governments within the Europe, Haas noted, were still powerful actors both internally and externally to the region .
The second wave of regional integration has been linked with the resurgence of regional integration across Europe during the 1980s, marked especially by the single market policy, suggesting further social, political and economic integration . The potential monetary union between European states was also a feature of this second wave. The EU’s Maastricht Treaty of 1992 highlighted the idea of EU citizenship, an increasingly important characteristic of regionalism, and common foreign and security policies. The EU, as a regional organisation, increased its regulatory powers over its members, which was traditionally a function of the state. It remains, arguably, the most important aspect of the EU’s activity as a regional unit. The European example (the EU) remains the most discussed and examined regional areas, partly due to it being the most established and most integrated organisation. However, in some ways the EU undermines the study of regional integration altogether, as it has been said that it doesn’t conform to any idea or model of regionalism at all and is a body unto itself. Wallace (1994) said the EU is “the only example to which the student of international integration can turn of a deliberate attempt over an extended period to foster the conditions for deep integration and to create the political institutions for their management” .

There are several ideas associated with the motivation for regional integration, including views from Constructivist, Neo-Realist and Liberal schools of thought. Emmanuel Adler, a follower of Constructivism, has advocated the concept of “cognitive regions” , underlining the significance of citizens’ sense of regional awareness and identity as members of that region. The idea highlights a notion of common culture, history, beliefs and a common enemy, or at least what Hurrell defines as “some external ‘other’” , albeit a security threat or cultural or social obstacle. It has been that Constructivism puts lesser emphasis on the intensely economic or political relations between states within a region, instead, as Wendt (1994) states: “Constructivists are interested in the construction of identities and interests, and, as such, take a more sociological than economic approach to systemic theory.” Wendt goes on to say that states are “constructed by historically contingent interactions” , rather than formed on a more independent basis. As a foundation for thought, Constructivism suggests that states become members of regional organisations in order to illustrate some sense of united identity and to demonstrate shared interests that they have between them, within the region.
If we look towards Neo-Realism as a source for ideas about motivation for regionalism, we find the idea of hegemony. It can be claimed that “…subregional groups often develop as a response to the existence of an actual or potential hegemonic power. Thus in many parts of the world there is a tendency for subregional groupings to form as a means of improving the balance of power vis-à-vis a locally dominant or threatening state.” Proponents of Neo-Realism believe strongly in the idea of collaboration against a common evil, or at least a common threat. In the case of the EU, it could be argued that the region has been set up as a means of countering the otherwise hegemonic position of the USA. However, there is also suggestion through concepts central to Neo-Realism for the “…tendency of weaker states to seek regional accommodation with the local hegemon in hope of receiving special rewards.” An example of this hypothesis may be Mexico with its membership to the North American Free Trade Agreement (NAFTA). Mexico, along with Canada and the USA, is a member of the largest free trade area in the World , but is clearly a ‘weaker’ state, perhaps best defined as less powerful. Forming such an alliance with such a hegemon, the USA and another major international actor has been clearly beneficial to Mexico, based on statistical performance indicators. In 1999, five years after NAFTA was formed, trade between the three member states, since formation, had increased by 70% , with 68% of Mexican companies having experienced direct sales increases due to the creation – and Mexico’s membership – of NAFTA . This example alone clearly illustrates the benefit of regional integration in the Neo-Realist sense, which is to stand up to the hegemon – or in some cases to follow the adage: ‘if you can’t beat them, join them’.
In reference to the idea of motivations for regionalism, it is important to raise the argument of structural independence and globalisation, in the more particular sense of regionalisation. It has been claimed that the Neo-Realist “…picture of the international system misses out entirely the ways in which both the nature of political and economic competition and the consequent definition of state interests are affected by changes in the global economic system.” The argument raised here is that Neo-Realism omits the incorporation of a broad sense of world economy and how changes within it impact upon states’ interests. The importance of globalisation as a factor in contemporary regional integration is also stressed by more liberal theories on regionalism. Hurrell (1995) states that “’Globalisation’ has become an important theme of the post-Cold War discussion of the nature of international order. Although rarely tied to any very clearly articulated theory, it has become a very powerful metaphor for the sense that a number of universal processes are at work generating increased interconnection and interdependence between both states and societies.” The central point made is that globalisation itself can at least lead to, if not exist as, a form of regionalism. There is an emphasis here placed upon the interaction between society and the state in so much as the process of regionalisation, as a more ‘laissez-faire’ form to regionalism. Regionalisation can be explained as regionalism regardless of political boundaries. Independent social integration falls into such a category in so much as it is not controlled by formal, state-centred processes, but more often than not it refers to trade and investment-led economic integration. The more deeply integrated regions become, the most important it is to form some kind of collective management system in order to control and regulate economic activity in the area. It is such regional bodies, as well as the relevant national governments, are the facilitators of much of the integrational activity involved in what is termed as regionalisation. The levels of taxation and tariffs, the transnational flow of finance and infrastructure are all usually under the control of national or regional governments. Ultimately of course, the process of regionalisation lies in the hands of the non-governmental actors, such as firms and even individuals. Another motivation for creating regional agreements is that many issues, such as climate change and other environmental matters are much more likely to be dealt with on regional level, rather than on a global scale .

In conclusion, regionalism can be defined and explained in a variety of ways, each one proposing its own method for accounting for possible motivations behind the process. Ultimately, the socially constructed concept of the region underpins every such theory. The idea of a region is surely created by the population in question. One population may be more liberal about regional integration, allying more with region as an area of social integration above anything else. Another population may focus much more heavily upon the fiscal elements of integration and thus the collaboration of states in order to increase overall wealth in the region. Indeed, Hurrell (1995) emphasises this in saying that economic integration is an “important subcategory of regional co-operation…” . However, I am personally more interested by his later comment, that “…regionalism is all too often simply equated with regional economic integration, even though this is only one aspect of a more general phenomenon.” In today’s societies, the motivation of gaining some kind of regional identity is extremely important. Although economic and the abundant political benefits – and therefore motivations – should be understated, I think more than any other aspect, identity is becoming the basis for further integration, particularly in the more established organisations, such as the EU. The proposal of the European Constitution must be rooted in some way to the regional population’s desire for further alliance, not just the will and want of the national governments. I believe that the collaboration against hegemony stressed in Neo-Realist theory and the concept of regionalisation through globalisation have been perhaps the two most prominent features of integration thus far, I think that regional alliances in the future will be less state-centred. By this statement I mean that it is my belief that much of the somewhat discussed ‘third wave’ of regionalism will be resultant of acts, or at least proposals of social integration among non-governmental actors, basing their actions on the idea of the extension of regional identity.

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