Although regionalism has often been portrayed as a force opposed to globalization, both processes are intrinsically linked to global developments. Moreover, during the “third phase” of regionalism, globalization itself can be seen as one of the main drivers of regionalism and regionalization. In the emerging inter-polar world order, regional cooperation and integration are likely to continue to play a major role. Within the context of the current transformation of the world order, however, regional developments have attained rather limited public and scholarly attention. This is peculiar as regional cooperation continues to be high on the agenda of states and other actors. Dissatisfaction with the performance of global governance institutions has led to a joint response at the regional level after the end of the Cold War and is likely to do so again. Current trends, such as the emergence of the G20, have also made regional cooperation increasingly meaningful for the G20 members as well as all non-members.
The one key question for the future of regionalism is therefore not its continuing significance, but the type of regional cooperation states and other stakeholders will favour during the coming decades. In addition, the section envisages the growing importance of region-to-region (or interregional) relationships in the future. In an inter-polar world, these could take the shape of (i) an open and interconnected set of relations among different regions or (ii) the formation of closed and competing regional poles (fortresses).
While the financial and economic crisis has highlighted global challenges and developments – embodied in the G20 – regionalism seems to have escaped the headlines, despite its potential role in addressing these issues in the future. Almost unnoticed, regionalism has in fact been gaining speed in several places. One case in point is Asia. Although bottom-up processes of regionalization have been symptomatic of Asian cooperation, regional organizations are gradually developing and gaining importance. The role of the Association of South-East Asian Nations(ASEAN) has strengthened, and it now incorporates Asian economic giants China, India and Japan through the so-called ASEAN+3 arrangement. In addition, while some have seen an East Asian Community (EAC) emerging out of the ASEAN+3 or the East Asian Summit (EAS) process, others have envisaged a broader Asian Union. While the relevance of the South Asian Association For Regional Cooperation (SAARC) has been questioned, the 2010 summit found common ground in the fields of democratic development and climate change.
Similarly, in the context of the current financial and economic crisis, the emerging markets have been highly active in exploring regional alternatives for global arrangements. In recent year Russia called for concerted action to break the stronghold of the US dollar and create a new global structure of regional powers. In East Asia, the Chiang Mai Initiative of the ASEAN+3 has been seen as a precursor to an (East) Asian Monetary Union. In South America, the envisaged merger of Mercosur and the Andean Community into the Union of South American Nations (UNASUR) as well as Venezuelan proposals to create a Banco del Sur and the Latin American Reserve Fund (FLAR) have found support across the region in an attempt to balance the Bretton Woods institutions. In Africa, the African Union has become a major forum and a recognized actor. Recently it has been proposed that the creation of an African Monetary Fund.
Many forms of inter- and sub-regional cooperation have also emerged or are being rediscovered. Major Asian powers and regional organization are increasingly engaged with other regions and powers. This development is highlighted by the United States Of America and other Pacific players’ commitment to the Asia-Pacific Economic Cooperation (APEC) and the European Union’s engagement with these countries within the framework of the Asia-Europe Meeting(ASEM). The European Union (EU) has also aimed to promote regionalism in the region through its strategic partnerships with China, India and Japan. Interregional relations have also developed between the African Union and Mercosur. Inter-regionalism is not however tied to the European Union(EU). The Arctic Council, for instance, brings together Arctic states to address the Arctic’s political, economic and social development in the face of global challenges related to climate change and prospects related to the Arctic’s under explored energy resources. Different forms of regional cooperation have also been established around the Baltic Sea and the European Union has been promoting a Union for the Mediterranean. These forums address a wide set of challenges related, amongst others, to the environment and development. Some also include a broad set of stakeholders. In addition to states, regional organizations, private businesses and NGOs are actively participating. At the sub-regional level, the long tradition of Nordic cooperation is also regaining importance on the agendas of the Nordic countries. While some scholars have proposed a Nordic federation in order to enhance these countries’ positions in an inter-polar world, policy-makers have been mainly discussing closer security and defence cooperation.
There are many interconnected reasons for these developments. As of the regional cooperation has a long history in addressing common regional and global issues. The simultaneous expansion of multipolarity and interdependency has further underlined the importance of regional cooperation and regionalism. Regional governance is closer to the source of the problems to be tackled, be they security threats, energy security, economic instability and crises or environmental challenges such as climate change. Moreover, regional cooperation provides one global public good that is in high demand in the evolving international environment and especially for the always jittery financial markets – certainty. Regionalism serves as an insurance policy against instability and – in the case of a monetary union – reduced transaction costs, thereby increasing certainty and allowing smoother interactions and exchanges.
In addition, the recent failure to address transnational issues within a global governance framework has shifted the attention of stakeholders towards potential regional solutions. Thus, the global financial crisis and stagnating UNFCC negotiations have amplified the need to address interdependent challenges also at a regional level. Finally, these developments are also linked to multipolarity in that pre-eminent powers such as Brazil, China, India, Japan and South Africa have chosen to invest in regional arrangements to confirm their leadership and to manage economic development and political differences.
Against this background, regional governance is both necessary and complementary to global governance structures, whether formal or informal. Due to legitimacy and implementation considerations, the G20 has reached out to other states as well as global and regional institutions. The presidency of the G20 is increasingly engaging with broad consultations through traditional shuttle diplomacy with regional and international organizations. Countries excluded from the G20 have also turned towards various forms of cooperation to make their voices heard, often with a clear regional dimension. In this context, the European Union constitutes an interesting case. On the one hand, the EU’s seat in the G20 is necessary in terms of the implementation of the G20 decisions, as part of the G20 governance falls under European Union competencies. On the other hand, the European Union members, which are not the G20 members, are indirectly represented in the forum.
This allowed for a greater representation of emerging economies in the G20. While single European representation is improbable in the near future, the European Union and European Central Bank seats reduced pressures for the incorporation of Spain and the Netherlands in the G20. Due to the size of their economies, both states could have made justified claims to be part of the club in 1997 when the G20 was created at the ministerial level and also in 2008 when it was upgraded to the leaders’ level. With the implementation of the Lisbon treaty, European Union representation is widely discussed in a variety of multilateral institutions. Given the considerable challenges – opposition to increased European representation on the one hand and reluctance of the European Union member states to give up their individual seats on the other – regional representation could constitute a way to streamline multilateral institutions.
Given the continuing salience of regional cooperation in an inter-polar world, the nature of regionalism becomes a highly topical question that should be put under closer analytical scrutiny. Our initial observations suggest a turn towards à la carte regionalism and increasing inter-govermentalism. Both can turn out to be detrimental for the recognized need for strong regional and global governance institutions through which common problems are identified, joint interests realized and effective action facilitated.
The move towards looser and informal global governance and ‘multilateralism light’ can be reflected in regional cooperation. There will likely be a continuing tension between regional and global levels of governance and a temptation for the great powers to impose their preferences on the former. Similarly, in the context of loose and informal governance structures they can choose the level and forum of their engagement.
The inter-polar world also seems to encourage a certain kind of regionalism, namely intergovernmental cooperation, rather than supranational regionalism. Indeed, the EU’s supranational model has been challenged in interregional arrangements such as Asia-Europe Meeting(ASEM). There is very little evidence suggesting a setup of strong regional bodies with supranational authority vested in European Union institutions, the World Trade Organization(WTO) or the International Criminal Court. Indeed, these institutions’ supranational powers might be increasingly challenged in an inter-polar world. A degree of supranationality in the sense of settling disputes in the formulation of common positions is however needed if regional cooperation is to maintain its legitimacy. Without this, new forms of regionalism built around the new emerging powers risk turning into a form of condominium rule.
In light of the above, a central question for the future development of regionalism relates to the various regional integration and cooperation processes and relationships with (i) global developments and institutions as well as (ii) other regional processes. In terms of the former axis of relations, significant differences can be identified. While the European Union has sought an increasingly autonomous role and recognition in global governance institutions, other regional processes tend to rely heavily on the role of their member states at the global level. Indeed, many of the regional organization and forums tend to speak through the emerging regional powers in global governance. In the case of the European Union, we can observe an opposite development. The European states have been prone to speak through and for the European Union, and they have been keen to develop institutions and instruments in this respect.
To some extent, a similar tendency can be observed in Association of South-East Asian Nations(ASEAN), although on a lower scale. The latter set of relations touches upon the emergence of inter-regionalism. The European Union’s role as a hub of region-to-region relations has been a significant factor in the development of interregional relations. The emerging multipolar order has however geared the European Union’s attention towards the major regional powers. In so doing, it has nevertheless aimed to promote regionalism elsewhere through its strategic partnerships. Moreover, ongoing developments also suggest that the development of interregional relations might increasingly bypass Europe, as alternative models and forms of regional cooperation are growing stronger.
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