Globalisation VS regionalisation Essay

Discuss with the Introduction to part III (pp. 289-293) and Chapter 20 in Stubbs & Underhill as a starting point the relationship between globalisation and regionalisation. Characterise in continuation of this the differences between regional integration in Europe and The Far East. For instance, you may reflect upon whether the recent financial crisis has set a new agenda for regional integration (Stubbs & Underhill, Chapters 21 and 24) In the past decades, numerous trading blocs have been created throughout the world, playing a significant role in the world economy and trade. However, as regionalization became of an increasing interest, there has been much discussion on its effects on globalisation and their relationship, as it is the other important trend in the world economy development next to regionalization. Discussion on the relationship between these two trends has been filled with ambiguity and will be clarified through the following pages. Furthermore I will take a look at differences between regional integration in Europe and Far East in regards to globalization. Additionally the impact of the recent financial crisis on regional integration will be discussed incorporating my own understanding of the subjects. Historically, before 1980, globalization was perceived rather negatively, leading to efforts of governments to protect their markets from the global competition by encouraging regional developments. Accordingly, regionalism was their response to the need for stressing their independence from global economy, caused by the growing force of globalization. 1 After the end of Cold War, globalization started to be perceived not as the ? enemy? , but more as a phenomenon of the age that has the capacity to bring advantages of a significant scale to those who can keep up with the flow and adapt to the changing enviroment, shifting the emphasis of the philosophy of regionalism into „ positioning a region so as to strenghten its participation in the global economy in terms both trade and capital flows. â€Å" 2 Furthermore the economic globalization affects the state also in political terms, creating a need for transformation of nation-state into competition-state as the nation-state can no longer protect its market in the same way as before, due to political globalization. Due to increasing global competition changes are made. These changes affect the states in a way that reduces their domestic political effectiveness and autonomy in order to enhance international competiveness. 3 In that sense, one of the crucial factors that triggered expansion of regionalism after 1980 was the political globalization. More specifically, the speeding globalization has led to increase in sense of regional identity, resulting in greater perception of common economic political and cultural interests of neighbouring countries that distingiush them from the rest of the world, enabling these countries to realize the benefits emerging from being a part of a region,4 and consequently the fast development of the European Union encouraged the need to counteract its increasing collective economic power. 5 „ The comparative advantage of the regional project is that it may be more effective in governing globalization than the nation-state while at the same time potentially offering more legitimacy and collective identity than globalization itself. â€Å" 6 Throughout the literature, scholars argue that the trends of regionalization and globalization reflect counterproductive relationship, as they stand in opposition to one another. Such tighter connections, as provided by regionalization, can lead to greater preference for trade with countries within the region, rather than in a global scale, which can be perceived as a concerning fact in relation to globalization. However, as I perceive it , these two trends do not compete, on the contrary, they complement each other. Regional developments strive to put states on fair trading terms, resulting in stronger regional economies. Stronger regional economies enable states to participate in world trade more effectively and therefore, regionalization contributes to the overall expansion of globalization. Similarly, in order to diminish the growing regional competition, states will form regional trading blocs and therefore, globalization contributes to the deepened regional trade. „New regionalism†¦ rather than being constructed in opposition to globalisation, it is, on the contrary, buttressed by a growing enmeshment while at the same time creating an institutional and political capacity to ? modify the conditions of globalisation. â€Å" 7 Regional integration of European Union (UN) has a comparatively longer and more intensive tradition compared to East Asia. Europe was the first one to realize, after WW2, the interdependence between its own welfare and stability of the region they were located in, expanding the European regional organizations, which they managed to reboost after the end of Cold War. After the period of euro-scepticism and euro-sclerosis, the goal of relaunching of Europe became of an increasing importance. This was intented to be managed through the unification of european market. Deepening globalization led to strenghtening neo-liberal forces, which meant the commitment to global free trade, i. e. internal and external market globalisation, with the aim „ to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. â€Å"8 Different reasons for the formation of regional groupings reflect different circumstances surrounding the actors. The Association of South East Asian Nations (ASEAN), for instance, represents smaller or economically weaker countries that may seek for the regional integration in order to resist the emergence of a regionally dominant state. Conversely, as with the candidates for EU, they may choose to link themselves as closely as possible with the regional leaders. In case of EU, the regionalization is a result of political, institutional, and cultural factors as well as those related to transformation in corporate organization. This can be explained through the link between the region and the identity, that is most advanced in Europe. Inspite of representing the most advanced form of integration, the member states of the EU, especially the larger ones, do not appear ready to give up the role that they play individually in the regional and global settings, but still, to a large extent are involved in â€Å"steering† both regionalization and globalization collectively, that is, through the EU and its institutions. The East Asian crises emerging in 1997-98 had two main implications for the political economy of the region. Firstly, the increase in discussions about regional integration as a more intensive regional co-operation became desirable, leading to expansion of ASEAN by the participation of China, Japan and South Korea. 9 Secondly, the crisis enhanced the prospects for the continued development of an â€Å"East Asian† , as opposed to a â€Å"Pacific†, understanding of the region. 10 At the same time, two significant trends arised including the growing interest in monetary co-operation and bilateralism. Regarding the monetary integration, in contrast to EU, East Asia has failed to attempt to establish an Asian Monetary Fund, continuing in search for new monetary regionalism. Secondly, the growth in bilateral trading agreements can be partially explained through the growth in interregional agreements, such as between EU and MERCOSUR. EU gaining competitive advantage in the field of political agreements on market access in other regions leaves other actors in position of cathcing up with EU in this circle of bilateral competition : „ The more Europe and other regions integrate, the more will East Asia, not the least China, turn from its traditional bilateralism towards increased emphasis on regional co-opertain as a political instrument. â€Å" 11