Is regionalism a stumbling block or a stepping stone in the process of globalisation?

Author: Rudi Guraziu

Middlesex University
School of Health and Social Sciences
Globalisation: International Political Economy
Political & International Studies
MA International Relations
May 2008
Since the end oI the Cold War, there has been a resurgence oI regionalism across the
globe.
1
The number and salience oI Regional Trade Agreements (RTAs) have grown
signiIicantly. As oI July 2007, 380 RTAs have been notiIied to the World Trade
Organisation (WTO). OI these 205 RTAs were in Iorce at that same date.
2
The process oI
regionalism appears irreversible, no longer to be dismissed by critics as a mere Iad`.
3
However, this trend has raised controversial issues such as whether regionalism is
becoming a stumbling block or a stepping-stone toward the processes oI globalisation.
Some see regionalist projects as an obstacle to economic globalisation -- others as a way
toward multilateralism. Hettne argues that new regionalism cannot simply be a 'stepping
stone in a linear process, but this does not necessarily mean that it constitutes a
'stumbling block either`.
4
In this paper, I will be investigating whether regionalism is a stumbling block or a
stepping stone in the process oI globalisation. I will do this by Iocusing on the
development oI regionalism and its several aspects and its developing links with
globalisation. In the Iirst part, I will explore the concepts involved in some detail, with a
particular Iocus on the concept oI regionalism. I then go on to examine diIIerent
approaches to regionalism Irom the perspective oI three dominant theories oI
international relations, neo-realism, neo-liberalism and neo-marxism. The stumbling
block - stepping stone controversy I will explore both theoretically and empirically. In the
last part, I will look at regionalism in Europe, Asia, and Americas.
As a prelude to the stumbling block or stepping stone debate it is important to
explore the concepts oI: region, regionalism, regionalisation, globalism and globalisation
that are relevant to this essay.
1 See Ior example: Bjrn Hettne, The New regionalism: A Prologue`, in Bjrn Hettne, Andras Inotai and Osvaldo Sunkel, eds. Globalism and the New
Regionalism Volume 1 (Macmillan Press, Basingstoke, 1999). p. xvii.; Louise Fawcett, Exploring Regional Domains: A Comparative History oI
Regionalism`, International AIIairs 80, 3 (2004), p. 438.; Charalambos Tsardanidis, The BSEC: From New Regionalism to Inter-regionalism?`, Agora
Without Frontiers Volume 10 (4) 2005: p. 363.; Michael Smith, Regions and Regionalism`, in Brian White, Richard Little and Michael Smith (Third ed.).
Issues in World Politics (Basingstoke: Macmillan 1997), p. 69.; Louise Fawcett, and Andrew Hurrell, Introduction`, in Louise Fawcett and Andrew
Hurrell, eds., Regionalism in World Politics: Regional Organisation and International Order (OxIord: OxIord University Press, 1995). p. 1; Karen A.
Mingst, Essentials oI International Relations, Fourth Ed. (W. W. Norton & Company, New York, 2008), p. 274.
2 The WTO, Regional trade agreements`, Available at: http://www.wto.org/english/tratope/regione/regione.htm |accessed 24 April 2008|.
3 Louise Fawcett, Exploring Regional Domains: A Comparative History oI Regionalism`, p. 438.
4 Bjrn Hettne, The New regionalism: A Prologue`, p. xx.
2
The Iirst question that comes to mind: what is region? Region along with all
the aIorementioned terms is a contested and ambiguous concept. Regions, like
states, are oI varying compositions, capabilities and aspirations. They may also be
Iluid and changing in their make-up`.
5
They can be Iormal and inIormal, created
and recreated in the process oI globalisation.
6
In other words, regions exist where
politicians want them to exist. While regionness, like identity, is not given once
and Ior all: it is built up and changes`.
7

What is regionalism? Anthony Payne deIines regionalism as a state-led or states-
led project designed to recognise a particular regional space along deIined economic and
political lines`.
8
In similar vein, Grugel, and Hout, assert that regionalism is a states-led
project which has as its aim that oI reorganising particular geo-economic spaces`.
9
However, not everyone agrees with this narrow deIinition oI regionalism. Bos et al Ior
example argue that regionalism is clearly a political project, but it is obviously not
necessarily state-led, as states are not the only political actor around . . . we clearly
believe that, within each regional project (oIIicial or not), several competing
regionalising actors with diIIerent regional visions and ideas coexist`.
10
That is, although
the state is still important (iI not the most important and powerIul actor) that dos not
necessarily mean that other non-state actors have to be ignored. In Iact, Bos et al believe
that even though the state is most oIten one oI the regionalising actors, |nonetheless|
equally important are NGOs, new social movements, media, companies as well as a range
oI actors based in the second economy oI the inIormal sector`.
11
This concept is now
known as new regionalism .The term new regionalism is generally used in the post-Cold
War era.
5 Louise Fawcett, Exploring Regional Domains: A Comparative History oI Regionalism`, p. 434.
6 Bjrn Hettne, The New regionalism: A Prologue`, p. xv.
7 Amin MaalouI cited in Louise Fawcett, Exploring Regional Domains: A Comparative History oI Regionalism`, p. 434.
8 Anthony Payne, Globalization and Modes oI Regionalist Governance`, in David held and Anthony McGrew, eds., The Global TransIormations Reader;
An Introduction to the Globalization Debate (Polity Press, Cambridge, 2003). p. 213.
9 Jean Grugel, and Wil Hout, Regions, regionalism and the South` in Jean Grugel and Wil Hout eds., Regionalism across the North-South Divide: State
Strategies and Globalization (London: Routledge, 1999). p. 10.
10 Morten Bos, Marianne H. Marchand and Timothy M. Shaw cited in Fredrik Sderbaum, Introduction: Theories oI New Regionalism`, in Fredrik
Sderbaum and Timothy M. Shaw, eds, Theories oI New Regionalism: a Palgrave Reader, (New York, Palgrave Macmillan, 2003).pp. 8-9.
11 Bos et al in ibid, p.14.
3
Most oI the literature on regionalism since 1990s reIers to two main waves oI
regionalism identiIied as old and new. The Iirst wave started in the late 1940s and ended
in late 1960s and early 1970s (arguably due to the uneven distribution oI beneIits in
regional trade agreements), the second part began in mid 1980s and in particular, the
world trading system in 1990s has witnessed a resurgence oI regionalist projects
worldwide oIten reIerred to as new regionalism`. However, in order to understand what
is new about regionalism one has to identiIy its diIIerences Irom the old understanding.
In contrast to classical regionalism, the new regionalism involves non-state actors, and is
more open and more comprehensive.
12

Regionalisation on the other hand reIers to the growth oI societal integration
within a region and to the oIten undirected processes oI social and economic interaction`
early described as inIormal integration while nowadays this phenomenon is known as
soIt regionalism.
13
Here, it is important to distinguish the concepts oI regionalisation and
regionalism, which sometimes are used interchangeably.
14
Regionalisation is a process
that can occur even without regionalism.
15
It reIers to the regional expression oI the
global processes oI economic integration and the changing structures oI production and
power.
16
Yet, Hettne et al assert that the process oI regionalisation can only be
understood within the context oI globalisation. To deal only with regionalisation would
be to miss the other side oI the coin, which is globalisation`.
17

12
The distinction between the old` and the new` regionalism according to Hettne is in the Iollowing
respects: (a) Whereas the old regionalism was Iormed in a bipolar Cold War context, the new is taking
shape in a more multipolar world order. (b) Whereas the old regionalism was created 'Irom above (that is
by superpowers), the new is more spontaneous process 'Irom within (in the sense that the constituent
states are themselves main actors). (c) Whereas the old regionalism was speciIic with regard to objectives,
the new is a more comprehensive, multidimensional process.
Bjrn Hettne, Global Market versus the New regionalism`, in
David held and Anthony McGrew, eds., The Global TransIormations Reader; An Introduction to the Globalization Debate (Polity Press, Cambridge,
2003), p.362.; For detailed diIIerences between the new` and the old` regionalism see, Bjrn Hettne, Globalisation and the New Regionalism: The
Second Great TransIormation` , pp. 7-8.
13 Andrew Hurrell, Regionalism in Theoretical Perspective`, in Louise Fawcett and Andrew Hurrell, eds. Regionalism in World Politics: Regional
Organisation and International Order (OxIord: OxIord University Press, 1995). p. 39.
14
See
Louise Fawcett, Exploring Regional Domains: A Comparative History oI Regionalism`, p.433.; Manuela Spindler, New Regionalism and the
Construction oI Global Order`, Centre Ior the Study oI Globalisation and Regionalisation, CSGR Working Paper No. 93/02 p.6 March 2002. Available at:
http://www2.warwick.ac.uk/Iac/soc/csgr/research/workingpapers/2002/wp9302.pdI
15 Tun Aybak, Globalisation and Regionalism`.
16 Jean Grugel, and Wil Hout, Regions, regionalism and the South`, p.10.
17 Bjorn Hettne et al, Editors` Introduction`, in Bjrn Hettne, Andras Inotai and Osvaldo Sunkel, eds. Globalism and the New Regionalism Volume 1
(Macmillan Press, Basingstoke, 1999).p. xxxi
4
McGrew et al regard Globalisation as a process that is transIorming the spatial
organisation oI social relations and transactions`.
18
Contrary to some economists who see
globalisation as a positive others, including national policy-makers and their
constituencies, especially in the OECD |Organisation oI Economic Cooperation and
Development|, see globalisation as threatening.
19
In other words, globalisation produces
both negative and positive eIIects.
When it comes to the relationship between regionalism and globalisation, some
observers view regionalism as an integral part oI globalisation others as concepts
bouncing` against one another.
20
However, Mittelman Ior example argues that any
imputed conIlict between regionalism and globalisation is more theoretical than real, Ior
political and economic units are Iully capable oI walking on two legs`. He points out that,
iI globalisation is understood to mean the compression oI the time and space aspects oI
social relations, then regionalism is but one component oI globalisation. Properly
understood, the dynamics oI regionalism are a chapter oI globalisation`.
21

Still, this does not so clearly answer the question oI how do these ideas oI
globalisation relate to regionalism.
22
The answer obviously is not an easy one. Indeed the
answer is very complex and ambiguous. According to Hurrell there are many ways in
which globalisation works against the emergence oI regionalism
23
and visa-versa.
Moreover, as Margaret Lee observes the weave-world oI regionalism and globalisation
(.) does not co-exist well within the AIrican context. In Iact, it appears to be
counterproductive to the AIrican agenda oI economic growth and development`.
24


18
It generally reIers to the stretching oI social, political and economic activities across political Irontiers,
regions and continents` and the intensification, or the growing magnitude, oI interconnectedness and Ilows
oI trade, investment, Iinance, migration, culture, etc`.
David held, Anthony McGrew, David Goldblatt, and Jonathan Perraton,
What is Globalisation`, Available at http://www.polity.co.uk/global/whatisglobalization.asp |lased accessed 21 April 2008|, emphasis on the original.
.
19 C. Oman, cited in Percy S. Mistry, The New Regionalism: Impediment or Spur to Future Multilateralism?`, in Bjrn Hettne Hettne, Andras Inotai and
Osvaldo Sunkel, eds. Globalism and the New Regionalism Volume 1 (Macmillan Press, Basingstoke, 1999). p. 148
20
Held et al assert that the 'new regionalism is not a barrier to political globalisation but, on the contrary,
entirely compatible with it iI not an indirect encouragement`.
David Held and Anthony McGrew, and David Goldblatt and Jonathan
Perraton, Global TransIormations: Politics, Economics and Culture, (Polity Press, Cambridge, 1999). p. 77
21 James H. Mittelman, Rethinking the New regionalism in the Context oI Globalisation`, in Bjrn Hettne, Andras Inotai and Osvaldo Sunkel, eds.
Globalism and the New Regionalism Volume 1 (Macmillan Press, Basingstoke, 1999). p. 25
22 Andrew Hurrell, Regionalism in Theoretical Perspective`, p. 55.
23 Ibid.
24 Margaret Lee, Regionalism in AIrica: A Part oI Problem or a Part oI Solution`, p.21.
5
Theoretical approaches to regionalism
The controversy regarding regionalism is evident also amongst the three dominant
theoretical schools oI thought in the Iield oI international relations. Neo-realist theories,
based on power politics, would hold that even iI a state were to derive an absolute gain
Irom cooperation it will reIrain Irom entering into a cooperative relationship iI it expects
that its partner will beneIit relatively more Irom the relationship and will end up
comparatively stronger.
25
Further, neo-realists argue that since the developing countries
lack the domestic legitimacy to deIend their economic resources their elite tend to Iorm
alliances with the more powerIul countries. Levy and Barnett have argued that there is
an incentive Ior political leaders to ally with an economically more powerIul state that
might provide scarce resources
26
, which, in turn, might help resolve internal economic
and political problems`.
27
According to them security threats oIten stem Irom
'weaknesses in the domestic political economy rather than Irom 'more narrowly deIined
and autonomously generated political threats`.
28
Furthermore, neo-realists expect that regionalist agreements between the developed
countries and the developing countries will be security related
29
. In addition, neo-realists
argue that regionalist arrangements will be evaluated on the basis oI the relative gains
accruing to the diIIerent partners in the arrangement`.
30
For realists international
organisations are nothing more than interstate institutions, thereIore it is irrelevant
whether such institutions are global or regional.
31
Nevertheless, although political realism
is sometimes convincing, as a theory it Iails to recognise the changes in the world. The
25 Wil Hout, Theories oI International Relations and the New Regionalism` in Jean Grugel, and Wil Hout, eds., Regionalism across the North-South
Divide: State Strategies and Globalization (London: Routledge, 1999). pp. 14-28
26 Buzan et al, by using water shortages as an example argue that a water shortage could become securitised at the global level, but the major battles will
be more likely to be regional`. Barry Buzan, Ole Waever, and Jaap de Wilde, Security: A New Framework Ior Analysis, (London, Lynne Rienner 1998). p.
18
27 Jack Levy and Michael Barnett cited in Wil Hout, Theories oI International Relations and the New Regionalism`, p. 15.
28 Ibid.
29 Barry Buzan et al, have termed security issues within regions as regional security complex` which he deIines as a set oI units whose major processes
oI securitisation, desecuritisation, or both are so interlinked that their security problems cannot reasonably be analysed or resolved apart Irom one another`.
Buzan et al A New Framework Ior Analysis` p. 201. Although Buzan`s et al analysis on security has been criticised as state-centric, (Peter Hough,
Understanding Global Security, (London and New York, Routledge, 2004), p. 9.) ,nevertheless, the complex itselI is deIined by the actions and relations
in the region (.) |because, otherwise| (.), it would not be a regional security complex`. Buzan et al, Security: A New Framework Ior Analysis, p. 200.
30 Wil Hout, Theories oI International Relations and the New Regionalism`,p.16.
31 Louise Fawcett, Regionalism in Historical Perspective`, in Louise Fawcett and Andrew Hurrell, eds. Regionalism in World Politics: Regional
Organisation and International Order (OxIord: OxIord University Press, 1995). p. 13.
6
EU integration is a case in point: EU member states have voluntarily given up parts oI
their sovereignty to supranational bodies posing a direct challenge to the realists view on
regionalism.
Neo-liberalist theories on the other hand dominate most oI the literature and are
strongly Eurocentric

Iocusing on the changing character oI intra-regional relations, on the
conditions that were likely to promote or to hinder the movement towards regional
economic integration.
32
According to neo-liberals, regional groupings need not be either
building blocs or stumbling blocs oI world order. In contrast to neo-realist view, neo-
liberal approach to international relations seems to place much more stress on
cooperation among states.
33
Moreover, neo-liberals tend to see cooperation among states
as the rule, rather than the exception, especially in those areas where policy coordination,
is necessary to realise the procurement oI public goods, such as stable monetary relations,
Iree trade or sustainable ecological development`.
34
Neo-liberals believe that, by
encouraging domestic economies to compete in the world market, regional integration
will lead to multilateral co-operation on a global scale and thus reduce conIlict.
35
However, the credit crunch seems to be putting negative pressure in this assertion.
Neo-liberalist position is that the same rules oI economic development can be
applied to both developed and underdeveloped countries. Obviously, centres could
impose the rules on peripheries as they wish since they are in charge oI the World Bank
and the International Monetary Fund (IMF). As Mittelman points out neo-liberal theory
has been put into practice in the Iorm oI adjustment policies drawn up by the World
Bank and the IMF`.
36

In contrast, to neo-liberalists who believe that regionalism is useIul as long as it
leads to Iree trade, neo-marxists who mainly draw on the theory oI imperialism have
Iocused on the developing regions. Johan Galtung describes imperialism as a structural
relationship between countries Irom the centre and periphery`. Galtung contends that the
relationship between the EU and the developing world is a relationship oI collective
32Andrew Hurrell, Regionalism in Theoretical Perspective`, p. 46
33 Wil Hout, Theories oI International Relations and the New regionalism`, p.16.
34 Wil Hout, Theories oI International Relations and the New Regionalism`, pp. 16-17.
35 James H. Mittelman, Rethinking the New regionalism in the Context oI Globalisation`, p. 29.
36 Ibid., p. 45.
7
colonialism`
37
. Similar assertions have been voiced recently by various civil society
organisations oI AIrica who have called on EU to stop trying to re-colonise AIrica`.
38
Furthermore, Galtung argues that the EC policy is aimed at Iragmenting the South: the
EC enters into separate trade agreements with diIIerent groups oI developing countries,
such as the so-called AIrican, Caribbean and PaciIic (ACP) countries`.
39
Similarly, during
the recent EU-AIrica summit held in December 2007 in Lisbon, Alpha Oumar Konare,
Head oI AIrican Union accused Europe oI playing certain AIrican regions oII against
each other`.
40

Further, contrary to some enthusiasts Ior globalisation and open regionalism, Samir
Amin views regionalisation as a building block Ior a reconstruction oI a diIIerent global
system.
41
Amin argues that regionalism is the only eIIicient response to the challenges oI
a continuously deepening polarisation generated by the capitalist globalisation
processes`.
42
According to Amin a country`s position in a globalised world is deIined by
its capacity to compete in the world market . |where such| competitivity is a complex
product oI many economic, political, and social Iactors`.
43
Amin contends that the centres
use the Iollowing five monopolies to prevent the peripheries Irom developing. (i)
technological monopoly, (ii) Iinancial control oI worldwide Iinancial markets, (iii)
monopolies oI access to the planet`s natural resources, (iv) media and communication
monopolies, (v) monopolies oI weapons oI mass destruction.
44
These Iive monopolies
deIine the Iramework within which the law oI globalised value operates`.
45
Since states
cannot possibly Iight against these five monopolies on their own, Amin asserts that
regionalisation is the only alternative.
46
For Amin regionalisation might work as a shield
against the capitalist led globalisation. .
37 Johan Galtung in Wil Hout, Theories oI International Relations and the New Regionalism`, p. 19 .
38 Brigitte Weidlich, AIrica: Stop 'Re-Colonising AIrica, Civil Society Tells EU`, All AIrica.com 6 March 2008, Available at:
http://allaIrica.com/stories/200803060264.html |accessed 2 April 2008|.
39 Johan Galtung in Wil Hout, Theories oI International Relations and the New Regionalism`, p. 19
40 Barbara Stocking, AIrica-European union Trade; Seismic Rupture`, The World Today , Vol. 64: No. 1, January 2008. p. 21.
41 Samir Amin, Regionalisation in Response to Polarising Globalisation`, in Bjrn Hettne Hettne, Andras Inotai and Osvaldo Sunkel, eds. Globalism and
the New Regionalism Volume 1 (Macmillan Press, Basingstoke, 1999). p. 54.
42 Ibid.
43 Ibid., p.64
44 Ibid., pp. 64-65.
45 Ibid., p. 65.
46 Ibid., p. 66.
8
. In contrast to Amin, Naisbitt argues that new Iorms oI regionalism can be seen as
building blocs towards the processes oI economic globalisation. What is evolving around
the world` writes Naisbitt is not protectionist trading blocs designed to isolate any given
region Irom the rest oI the international players, but economic alliances that promote
development within regions, while making all borders more porous`.
47
Naisbitt contends
that the examples oI the Association oI South East Asian Nations Free Trade Area
(AFTA), the Common Market oI the South (MERCOSUR) and NAFTA |North
American Free Trade Agreement| will show politicians and the general public alike that a
country`s well-being does not hamper another`s wealth: they will come to realise that
'the global economy is not a zero-sum game, but an expanding universe`.
48

Similarly, Ior Baldwin regional trade blocs are building blocs toward Iree trade.
North-South Iree trade agreements are probably the only way to liberalise industrial
tariIIs in developing nations.
49
The then WTO`s Director-General Mike Moore during his
speech in Buenos Aires stated that Regional trade agreements, in tandem with
multilateral liberalisation, can help countries - particularly developing countries - build
on their comparative advantages, sharpen the eIIiciency oI their industries, and act as a
springboard to integration into the world economy. They can also help Iocus and
strengthen their political commitment to an open economy`.
50
It is obvious that the
diIIerences among various theorists (and possibly policymakers too) in relation to
regionalism vis-a-vis globalisation are too great to overcome.
As was mentioned in the introduction oI this essay it is since the demise oI the Cold
War that there has been a rush into regionalism and the number oI the RTAs has grown
rapidly. Under the terms oI GATT (now GATS) when states sign regional trade
agreements they notiIy the WTO.
51
Among hundreds oI RTAs, three seem to dominate
the trade Ilows: (a) NAFTA based on the USA, (b) the EU, and (c) East Asia based on
Japan. Some research shows that most oI the trade is within rather than between regions
47 John Naisbitt cited in Wil Hout, Theories oI International Relations and the New regionalism`, p. 25.
48 Naisbitt cited in ibid.
49 Richard E. Baldwin, Stepping stones or building blocs? Regional and multilateral integration`, Graduate Institute oI International Studies, Geneva, 10
September 2004. p. 9. Available at: http://hei.unige.ch/~baldwin/PapersBooks/SteppingStonesOrBuildingBlocks.pdI |accessed 17 April 2008|.
50 Mike Moore, Globalizing Regionalism: A New Role Ior Mercosur in the Multilateral Trading System`, Buenos Aires, 28 November 2000,
http://www.wto.org/english/newse/spmme/spmm45e.htm |accessed 11 April 2008|.
51 Russett, B. and Harvey Starr and David Kinsella, World Politics; The Menu Ior Choice, Sixth ed. (BedIord /St. Martin`s, Boston, 2000), p.391.
9
as pointed out by Alan Rugman, the ProIessor oI International Business at the University
oI Indiana. For example, in NAFTA, 57 per cent oI trade is intra-NAFTA, in Europe, 61
per cent is intra-EU, and in Asia, 50 per cent is intra-Asia.
52
Rugman`s research suggests
that most trade is regional rather than global. However, some statistics suggest that, intra-
regional trade in 1980s was only 34 per cent in NAFTA, 52 per cent in the EU (then the
EEC) and 35 per cent in Asia.
53
Arguably, the most successIul regional project is the EU, prompting some to assert
that this could ultimately lead to the construction oI a kind oI 'regional state, in which
the traditional roles oI national state authorities are transIerred to the European level.
54
Some see European integration as a counterweight to the interests oI the USA.
55
The EU
according to Held et al is probably best described neither as an international regime nor
as a Iederal state, but as a network oI states involving the pooling oI sovereignty`
56
.
Until the mid 1980s, EU regionalism had a protectionist outlook`
57
, in other words,
it was a stumbling block, in particular when it came to its agricultural policies.
58
Since
then, the European Round Table oI Industrialists (ERT) has at the core oI internal market
regionalism competition, free market integration and neoliberal deregulation`.
59
European industry, according to ERT, expects more open access to world markets, in
return to giving competitors better access to the Single Market in Europe.
60
Yet, the EU
Iarm subsidies, even now remain very controversial. In addition, it is argued that the Iear
about the emergence oI a Fortress Europe`, led to other regional grouping being
established, i.e. NAFTA, the Association oI South-East Asian States (ASEAN), Asia
52 Alan Rugman in Tim Harcourt, All trade is regional?`, 17 February 2005, Available at:
http://www.austrade.gov.au/All-trade-is-regional-/deIault.aspx |last accessed 24 April 2008|
53 Ibid.
54 Michael smith, Regions and Regionalism`, p.71
55 Thomas Christiansen, European Integration and Regional Cooperation`, in John Baylis and Steve Smith, eds., The Globalisation oI World Politics: An
Introduction to International Relations, third edition, (OxIord: OxIord University Press, 2006). p. 590.
56 David Held and Anthony McGrew, and David Goldblatt and Jonathan Perraton, Global TransIormations: Politics, Economics and Culture, (Polity Press,
Cambridge, 1999). p. 74.
57 Manuela Spindler, New Regionalism and the Construction oI Global Order`, p.17.
58 Richard E. Baldwin, Stepping stones or building blocs? Regional and
multilateral integration`, Graduate Institute oI International Studies, Geneva, 10 September 2004. p.10. Available at:
http://hei.unige.ch/~baldwin/PapersBooks/SteppingStonesOrBuildingBlocks.pdI |accessed 17 April 2008|
59 Manuela Spindler, New Regionalism and the Construction oI Global Order`, (Emphasis in the original). p.20.
60 ERT cited in ibid.
10
PaciIic Economic Cooperation (APEC), MERCOSUR and Organisation oI AIrican Unity
(OAU) now AIrican Union (AU).
61

Regionalism like globalisation undoubtedly has many positive qualities as well as
negative impacts. Stiglitz has stated that, the borderless world through which goods and
services Ilow is also a borderless world through which other things can Ilow that are less
positive` meaning transnational crime, terrorism etc.
62
Both regionalism and globalisation
create winners and losers. Stronger states use (abuse) these (regional) agreements to
consolidate their political inIluence over the weaker ones. Further, the incumbent
members introduce terms inhibiting and restricting underdeveloped countries in
exploitive Iashion. New regionalism risks subjecting hundreds oI millions oI people to
permanent underclass - leaving them abandoned in rural regions where spent agricultural
economies Iace Iurther decline. This not only denies people their basic rights to decent
occupation and standards oI living but also could lead to Iuture instability.
63

For instance, low tariIIs in Asia-PaciIic have contributed to rapid trade growth but
this has come with a rise in unequal incomes. In the Least Developing Countries (LDCs)
38 oI the population lives below $1-per-day. Asia still has more hungry people than
any other region in the world over 510 million.
64
The picture is worse in AIrican
regions, where diseases, Iamine and intra-state conIlicts kill millions oI people every
year, while at the same time each European cow receives more than $ 2.2 per day in
subsidies.
65
With a political will, which in the developing world lacks so Iar, this bleak
situation could improve. Lee argues that regionalism as practiced in AIrica is part oI a
problem and not part oI the solution.
66
On the positive, side apart Irom promoting economic, political and security
cooperation and community, regionalism can consolidate state-building and
61 Thomas Christiansen, European Integration and Regional Cooperation`, p. 59.; See also, Louise Fawcett, Regionalism in Historical Perspective`
p.24; Bjrn Hettne, Global Market versus the New Regionalism`. p. 362.
62 Bob Kelly, and Raia Prokhovnik, Economic Globalization?,` in David Held A Globalizing World? Culture, Economics, Politics, ed. (New York:
Routledge, 2004).p.97
63 Asia-PaciIic Human Development Report 2006. -Trade on Human Terms: Overview. TransIorming Trade Ior Human Development in Asia and the
PaciIic. p..11.
64 Ibid., p.3.
65 Heather Stewart, How Europe cheats AIrica`, the Observer, 19 June 2005, Available at:
http://www.guardian.co.uk/business/2005/jun/19/g8.hearaIrica051 |last accessed 29 April 2008|.
66 Margaret Lee, Regionalism in AIrica: A Part oI Problem or a Part oI Solution`, p.22.
11
democratisation. In addition, it can also help to manage the negative eIIects oI
globalisation. Recent examples Irom Europe, the Americas, AIrica and parts oI Asia
support this assessment.
67
In the ASEAN case, Ior instance it can be argued that
regionalism gives weaker countries an opening, enabling them to avoid either domination
by predominant powers or marginalisation by them.
68
Since the establishment oI ASEM
(Asia Europe Meeting) in 1996, the EU and ASEAN states have increased cooperation in
areas oI common concerns such as economics and human rights.
69
In addition, the EU has
established relations with MERCOSUR and commenced negotiations with NAFTA on
creating an AFTA (Atlantic Free Trade Area). Likewise, the US, as the most important
agent oI NAFTA, has entered a dialogue with MERCOSUR with respect to encouraging
closer cooperation.
70

Regionalism introvert or extrovert in global societv?
Many scholars and policy-makers believe that the new Iorms oI regionalism, which
are more extroverted rather than introverted may well, serve as a stepping stone in the
process oI globalisation.
71
The report oI the Commission on global governance suggested
that, regionalism enables states to make progresses in cooperation and liberalisation in
ways that provide a stepping-stone Ior global initiatives.
72
Moreover, open regionalism`
as is evident most explicitly in Asia-PaciIic is one way oI coping with global
transIormation, since the recent economic recession indicates that states lack the
capability and the means to manage global issues on the national level. Open regionalism
also is more appropriate Ior regions with security problems such as the Balkans and
BSEC (Black Sea Economic Cooperation). Cooperation within the region allows states
such as Greece and Turkey, or possibly Kosovo and Serbia, to look on the positive sides -
economic cooperation and Iurther integration, rather than conIlict. In any case, deep
international policy integration is unlikely to occur without deep regional integration
67 Louise Fawcett, Exploring Regional Domains: A Comparative History oI Regionalism`, p.429
68 Michael smith, Regions and Regionalism`, p.81.
69 David Held and Anthony McGrew, and David Goldblatt and Jonathan Perraton, Global TransIormations: Politics, Economics and Culture, (Polity
Press, Cambridge, 1999). p. 77.
70 Ibid.
71 Karen A. Mingst, Essentials oI International Relations`, p. 276.
72 The Commission on Global Governance, our Global Neighbourhood: the Report oI the Commission on Global Governance, (OxIord University Press,
New York, 1995). p.171.
12
occurring Iirst.
73
Furthermore, Ior developing countries, like most oI the BSEC and the
Western Balkans states, participation in regional cooperation schemes alongside more
developed and experienced states is a step towards integration into the broader global
system.
74
ThereIore, the BSEC example ought to be considered as a stepping stone`
towards economic globalisation.
75
Some European countries Ior instance have used the
participation in the Central European Free Trade Agreement (CEFTA) as a preperation
Ior EU membership.
76
Similarly, BSEC is oIten viewed as a stepping stone in Turkey`s
advance towards European integration.
77

Conclusion
The demise oI the Cold War seems to have boosted the salience oI regionalism
across the globe and the number oI RTAs has blossomed since. Again, the
aIorementioned evidence suggests that regionalism like globalisation certainly creates
winners and losers. A more detailed study on how these RTAs are implemented may
yield more evidence about the uneven distribution oI beneIits.
While the old` regionalism was state-centric, internally Iocused and imposed Irom
above; the new` regionalism involves non-state actors and is more open and more
comprehensive. Optimally, open regionalism` ought to be seen as a stepping stone
towards the process oI globalisation, still it remains a highly ambiguous and contested
concept.
Neo-realists assumptions, based on power politics, argue that the reasons behind
regionalist arrangements` are mainly security related. International organisations Ior
them are nothing more than interstate institutions; thereIore, it is irrelevant whether they
were regional or global. Yet, successIul EU integration where member states oI the union
have voluntarily given up parts oI their sovereignty to supranational bodies poses a direct
challenge to the neo-realist view on regionalism.
73 C. Oman, cited in Percy S. Mistry, The New Regionalism: Impediment or Spur to Future Multilateralism?`, p.149.
74 Charalambos Tsardanidis, The BSEC: From New Regionalism to Inter-regionalism?`, p. 367.
75 Ibid., pp. 368-9
76 Poland, Hungary, Czech Republic, Slovakia, Slovenia, Rumania, Bulgaria, have all used CEFTA as a training ground beIore they joined the EU.
77 Tun Aybak, Black Sea Economic

Cooperation (BSEC) and Turkey: Extending European Integration to the East?`, in Tun Aybak, Politics oI the
Black Sea: Dynamics oI Cooperation and ConIlict, ed., (London: I.B. Tauris Publishers, 2001), pp. 31-60
13
Neo-liberals, with strongly Eurocentric views, seem to emphasise cooperation
among states and Iocus on the promotion oI Iree trade and open regionalism. For neo-
liberals, regionalism need be neither a stepping stone nor a stumbling block. Neo-
marxists, in contrast, argue that the new regionalism promoted by neo-liberals intends to
divide the developing countries so that capitalist centres can exploit their economies.
They could conIront this continuously deepening polarisation generated by the capitalist
globalisation processes` with regionalisation.
78
In the end, it must be acknowledged that
in regions like AIrica where the European model appears to have Iailed some other Iorm
oI collective cooperation might work against the waves oI globalisation.
However, the empirical evidence indicates that international trade is mainly
happening in an intra-regional and inter-regional level, more precisely between and
within the EU, NAFTA and APEC. Consequently, the new regionalism is increasing
political, economic, security, and community cooperation within and between regions.
The cooperation between EU, NAFTA, MERCUR, and APEC supports this assertion. In
this sense, open regionalism` mav well serve as a stepping stone in the processes oI
globalisation.
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