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Free «Regionalism and Bilateralism in Trade Policy» Essay Sample

There are several ways in which “new regionalism” differs from that of the 1960s and 1970s. According to Keating (2000), the 1960s and 1970s regionalism comprised of intense activities that were not institutionalized. This applies to the Socialist Party Movement of the French regions that did not become fully fledged governments until late in 1986. Disappointments were also present in the 1960s and 1970s regionalism. However, the “new regionalism” is characterized by functional pressure that depict political mobilization. In addition, “new regionalism” depicts a redefinition of the economic and social meaning of territory. Notably, international market and the emerging continental regimes are instrumental in the provision of context for “new regionalism”. Rainnie & Grobbelaar (2005) also indicate that in “new regionalism”, the management of regionalism does not depend on old mechanisms of territorial accommodation and exchange. “New regionalism” also depicts erosion of the state’s power from three directions, which include above through internalization, below through local and regional assertion, and lastly, laterally through the advancement of the civil society and markets. Thus, Dieter (2007) asserts that “new regionalism” can be considered as modernizing phenomenon, pitting regions against each other in a competitive manner, and cannot be contained on a national or state level.

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The factors that account for “new regionalism” include its functional pressures and political mobilization, which did not exist in the past. This is a critical point in the popularity of “new regionalism” because it facilitated the trading prospects that were intended during the formation of “new regionalism”. In addition, “new regionalism” facilitated brand forms of political mobilization as governments became familiar with the real significance of regionalism. Another reason that accounts for “new regionalism” is its changing of economic and social meaning of territory. This is true with “new regionalism” because it aided the interaction of people from different regions with the sole function of trading and promoted the penetration of goods and services into different social and economic arenas. Another factor that explains the popularity of “new regionalism” is its erosion of the state’s power and authority. According to American Planning Association (2006), this is a key factor in the popularization of “new regionalism” as it facilitated the erosion of a state’s power and authority from three directions. These powers were a hindrance to the success of the 1960s and 1970s regionalism as all states were cautious regarding their power and authority.

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The first economic reason why a government might prefer trade liberalization at the regional level is the protection of its job markets. Boulle (2009) asserts that regional level of trade liberalization limits the number of people moving into a country in pursuit of job prospects. Notably, a country will not be comfortable consenting to trade liberalization with countries that will benefit more than it can do from the trade liberalization. According to Katada & Solís (2008), regional trade liberalization promotes protection of the local producers. This can be achieved through enactment of tariffs amongst the regional members, which is a difficult feat when it comes to trade liberalization at the global level. Ravenhill (2008) affirms that governments might be more inclined to engage in trade liberalization at the regional level as it promotes economic competitiveness. This emanates from the fact that a country in a regional entity will not want to be deemed as lagging behind when its counterparts are advancing in terms of technological development and other factors. In addition, a country engaging in trade liberalization at the regional level will want to rival its counterparts in production of some goods, which the other countries have not adopted yet; thus, it will result in promotion of economic competitiveness.

Three main political benefits accrue to a country from the fact of entering into a regional agreement. Firstly, Rolland (2012) points out that a country will benefit politically in terms of security. Security forms an advantage in this argument in that the increased contacts between governments builds the trust that these countries have between each or amongst each other. In addition, regional agreement amongst countries means that there is interlocking of economies; thus, any potential conflicts will be more expensive for every country involved. Johnson & Turner (2009) also affirm that there will be increased cross-border operations between or amongst countries in a regional agreement. The second political merit that derives from regional agreement concerns bargaining power. According to Boulle (2009), countries in a regional agreement have more bargaining power when it comes to international issues in comparison to when a country advances its grievances solely. Lastly, “lock-in” also abounds as a political merit of a regional agreement (Rolland, 2012). Notably, when countries in a regional agreement consent to a form of domestic politics, that form is usually maintained, and any attempts at reversal are usually not supported. The main issue in this context is the “commitment mechanism”, which works towards the promotion of democracy amongst member states. However, it should be noted that “commitment mechanism” significantly depends on member states commitment (Katada & Solís, 2008).

 
 
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Several evidences exist regarding the economic benefits to countries participating in a regional agreement. Firstly, countries in the Middle East have experienced significant economic growth since the establishment of the Gulf Cooperation Council in 1997. This regional agreement was formed for the purpose of reducing trade barriers amongst the member countries. The agreement was meant to last for ten years and has promoted massive developments in the region. Another notable evidence of economic benefits from regional agreements is notable from the extension of Canada-US free Trade Area to Mexico (Telò, 2007). This was done through the assistance of NAFTA. Notably, Mexico was ranked among developing nations, but through its entrance into the regional agreement, the country’s economy has been developing rapidly and the country currently is considered to be amongst the most industrialized nations. A notable economic benefit is also evident in the South African Development Community. Boulle (2009) notes that SADC was formed to function as a defense organization. However, this changed immediately after South Africa gained its independence in 1990 (Ravenhill, 2008). This has resulted in massive economic milestones to the member countries, South Africa being one of them. Lastly, there is evidence of economic benefit in the East African Countries. This can be attributed to the founding of the East African Cooperation, which increased trade amongst the countries in the region.

Free trade agreements can be stepping stones to global trade liberalization as they eliminate political and economic distortions. This emanates from the fact that countries participating in free trade areas consent to some form of “commitment mechanism”. This plays a significant role in the elimination of distortions, in politics and economy of the member countries (American Planning Association, 2006). Secondly, there is a promotion of global trade liberalization because free trade areas facilitate enlargement of markets. According to Rainnie & Grobbelaar (2005), market expansion is essential for the achievement of global trade liberalization. Lack of the market where goods and services can emerge from and the one where the aforementioned can be sold defeats the purpose of global trade liberalization. Another key point is that free trade area promotes security amongst the member states, which is also essential for global trade liberalization. Global trade liberalization can take place when countries from a certain region are constantly engaged in wars. Lastly, tariff jumping also forms a reason why free trade areas can be stepping stones for global trade liberalization. This is facilitated by customs unions, which are a characteristic of free trade areas.

   

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