La ola del regionalismo

Class 3 Regional Scenario

“The Wave of Regionalism”

Edward D. Mansfield and Helen V. Milner

589-622 (Libro flaco)

Some observers fear that regional economic institutions (Mercosur, NAFTA, etc) will erode the multilateral system that has guided economic relations since the end of World War II, promoting protectionism and conflict.

Various recent studies indicate that whether stateschoose to enter regional trade arrangements and the economic effects of these arrangements depend on the preferences of national policy makers and interest groups, as well as the nature and strength of domestic institutions. Other studies focus on international politics, emphasizing how power relations and multilateral institutions affect the formation of regional institutions, the particularstates composing them, and their welfare implications.

The resolution of these issues is to clarify if the new “wave” of regionalism will be benign or malign. Despite the regionalism contributed to the openness of trade during the 1900, also contributed to the World Wars I and II.

Regionalism: an elusive concept

Region: is often defined as a group of countries located in the samegeographically specified areas. Is too difficult to say which areas constitute a region.

Besides proximity, a region also shares cultural, economical, linguistic or political ties.

Its common that scholars define regions in nongeographic terms, but focusing in economic arrangements.

Some analyses define regionalism as an economic process whereby economic flows grow more rapidly among a given group ofstates.

Regionalization : regional concentration of economic flows. Regionalism: Political process.

Regionalism has been driven largely by the formation and spread of preferential trading arrangements (PTA´s).

Economic Analyses of Regionalism

Preferential trading arrangements have a two-sided quality, liberalizing commerce among member while discrimination against third parties.Viner demonstrated that a customs union´s static welfare effects on member and the world as a whole depend on whether it creates amore trade than it diverts.

A regional trade arrangement can also influence the welfare of member by allowing firms to realize economies of scale.

Several strands of research suggest that regional economic arrangements might bolster multilateral openness. But italso depends of the way that the arrangements are addressed.

Regionalism in Historical Perspective

There are four waves of regionalism:

1. Occurred during the second half of nineteenth century, and was largely a European phenomenon. Intra-European trade rose dramatically and constituted a vast portion of global commerce. The industrial revolution and technological advances helped tocommerce. The creation of various customs unions and bilateral trade agreements. Bilateral commercial agreements contributed to the growth of regionalism of Europe.. Era of “progressive bilateralism”.

2. World War I disrupted the growth of regional trade agreements. The second wave is more discriminatory than its predecessor and began when war ended. Agreements created to consolidate theempires of major European powers. The United States forged almost 24 bilateral commercial agreements mainly with Latin American countries (mid-1930´s). The interwar period, discriminatory trade blocs and protectionist bilateral arrangements contributed to the Great Depression.

3. Since WW II, states have continued to organize commerce on a regional basis, despite the existence of amultilateral economic framework. Trade flows are becoming increasingly concentrated within geographically specified areas. Commercial regionalism grew mainly because the rising trade between Western Europe within East Asia. The countries that where close were participating in the same PTA (trade concentration). Indicative of regionalism´s growth is the increasing rates at which PTA´s formed and states...