Comparative regional integration studies is an expanding subject. Its broad interdisciplinary nature has made it an eclectic and overstretched field that would gain from more cohesion. This essay therefore lays foundation for a like-with-like comparison of regional integrations that is inclusive and allows for interdisciplinary knowledge. This comparison (specifically focused on Europe and South America) directly expands Gardini’s (2010) framework and takes place within five categories. Eventually, by means of the method of induction, it provides brief insight into the common dynamics of regional integrations’ inception and development that can inspire further research efforts to create a comprehensive theory of regional integration building.
After the WWII, there has been a wide pread of integration efforts all over the world. Although there is no denying of the fact that the EU has tread the longest path since its inception and has reached the most profound level of integration, one must also accept that there are many efforts to follow its unprecedented development at least in its part. This ‘spill-over’ (or rather a ‘spill-around’) exploiting the pioneering endeavours of European states has, however, later caught theorists of the nascent European integration studies unprepared in trying to explain this trend worldwide; some try to simply ignore other organisations besides the EU, some claim that the path the EU has chosen is the only one possible. In other words, current integration studies are either too Eurocentric or concentrated on path-dependence.
In response, for a long time there have been voices (especially from scholars dealing with what is here and elsewhere habitually labelled as regionalism) that want to see this scholarship stalemate overcome and other efforts included (such as Warleigh-Lack and Van Langenhove 2010, Sbragia 2008, Söderbaum and Sbragia 2010, de Lombaerde et al. 2010). Their concerns are probably best expressed in de Lombaerde et al. (2010: 744): “The challenge for comparative regionalism is to both include and transcend European integration theory and practice. But this requires enhanced communication between various specialisations and theoretical standpoints.” What must be highlighted is that the statement reacts to both of the two points crucially raised above: Eurocentricity of current integration studies and their overwhelming focus on path-dependence. This essay in turn wants to answer both points of this call and consequently tasks itself with the following two objectives.
Objectives and Methods
First, the work wants to depart from the rigid traditional theoretical perspectives. IR students in their first year of university education are usually offered a very wide selection of IR theories as such but a very narrow range of integration viewpoints, moreover focused on the EU integration exclusively. These EU integration studies overview usually consist of (a) some kind of functionalism (see Jensen 2010) which stresses the supranational part of the EU and its evolution beneath the state limits. As a connected concept, ‘spill-over’ is devised to convey the idea of growth – an organisation starts with a few policy areas in which it successfully establishes itself and thus asks for other areas to be included. Furthermore, (b) some kind of intergovernmentalism (see Cini 2010) is included in the tuition and habitually rests on Hoffman and Moravcsik who stress the role of the state and its sovereignty. Moravcsik then tries to envelope functionalism by including non-state actors (societal preferences) in his theory as well as the need for international institutions to supervise the interstate bargaining process. Recently, © governance approaches (overwhelmingly multi-level) have started to gain more space in textbooks. These analyse the formal structures of the EU and try to identify patterns stemming from the comparison with domestic political concepts. Eventually, if integration is then pursued deeper at universities, only its selected aspects are highlighted, without much overarching view provided.
The recent need to concetrate on organisations other than the EU has seen comparative politics come to the rescue. The differences between integration and comparative approaches are probably best discussed by Hix (1994) and Hurrell and Menon (1996) who show the complexity of the issue, albeit in a slightly outdated manner. In very rudimentary terms, comparative politics (as related to the environment of this essay) deal with interstate and intrastate references to general concepts that by the same logic draw on actual developments and realities of life (see Landman 2008). Closest to what this essay adopts are probably the so-called area studies which are actually intrinsically linked to regionalism.
Acknowledging the above, this work aims to show that meaningful observations and conclusions can also be drawn using other ways, more precisely, by a combination of ways. Methodologically, it draws on much interdisciplinary knowledge and assumes the position that various regional integration efforts can be compared when it is done on a like-with-like basis. In order to do so Gardini’s (2010) inspirational framework is adopted, albeit refined, clarified and expanded by two more categories. The aim is to accommodate as many of the major existing theories and concepts of regional integration as possible.1 Directly stemming from Gardini’s original idea, the subsequent five categories – encompassing five main areas of organisations’ activities – offer a more balanced view on the matter at hand allowing the comparison to focus on particular themes without the theoretical prejudice present in other studies, drawing on broader and more interdisciplinary knowledge.
The secondary objective is to generalise the accumulated facts after the deconstructive (in the word’s practical, not theoretical meaning) comparison with the aim to prepare grounds for some kind of an innovative research agenda. This would describe in greater detail the creation and development of regional arrangements, which – as it must be emphasised – is a possibility emerging thanks to the topic-based rather than theory-centric comparison. Although the key conclusions drawn here might be considered too generalising and rather obvious, they are not supposed to explain but rather show what advantages the approach used here might have for the whole discipline.
However, there are two main sets of limitations to this methodology. First, the most important ones are formal: due to the imposed spatial constrictions this dissertation’s manoeuvring space is very limited. Therefore, the work chooses framework introduction at the great expense of the depth of comparison within the respective categories which is forced to be merely superficial. In turn, the set of ‘sub-topics’ discussed in each section had to be drastically limited as well. Additionally, only the regions of Europe and South America2 are selected to introduce the necessary concepts, which makes the work vulnerable to relativist-based objections. The second limitation comes from the very fact that the work tries to stay away from traditional theoretical concepts and rather concentrates on comparing observable facts without extensive attempts to fit them into a theoretical consideration of some sort first. Therefore, scholars from the entire theoretical spectrum may object to the findings here as sometimes various concepts are used and merged.
Finally, as for the organisation of this essay, the two regions are compared in the five categories mentioned above. Specifically, these are: 1) relationship with international hegemon(s), 2) relationship with regional power(s), 3 development model to adopt, 4) normative and cultural dimension and 5) governance and decision-making. These five categories are then adopted as sections of the text where each of them starts by a general description of the respective category, continues by the comparison itself and is finished by the generalisation meant for future research and expansion.
Relationship with International Hegemon(s)
Power of an international hegemonic leader is much higher than that of any of its competitors. Since the WWII the US and the USSR (since 1991 only the US) have undeniably been such hegemons, primarily thanks to their military but also economic3 might. Their clashes – salient or subtle – took place in many parts of the world where the respective regions had to relate to both superpowers in one way or the other because their interests could not be ignored. The relevant basic postures are generally of two types: cooperation (bandwagoning in the language of alliance theory which is very relevant for arrangement-building)4 or rivalry (balancing).5 States then have to decide on one or a combination of both if they want to build and develop their regional arrangement.
The interests of the US and the USSR marked the European post-war development visibly, which led to a game of high stakes in the region. The US pressured Western Europe to integrate Germany6 and laid the foundations of the containment of the USSR. In contrast, the USSR preferred weak Germany and strived to expand (later at least lock in) its territorial reach deeper into the continent (Anderson 2006). By a chain of actions and reactions: Marshall Plan was created; OEEC (nowadays OECD) helped to administer it; Soviet Cominform formed as a part of the USSR’s ‘retrenchment’ policy in Eastern Europe (Messenger 2006); ECSC emerged as a way to tie Germany and start the (not only economic) engine of the European integration; this was countered by the Soviet COMECON arrangement; etc. All of these arrangements related to the hegemons by cooperating (bandwagoning) with one while excluding the other, while at the same time balancing the ‘competing’ arrangement(s). Additionally, we can see that this pattern has obvious profit-driven tendencies when acknowledging the fact that the hegemons also put themselves into the positions of substantial financial contributors. Hegemons can also ‘accidently’ create pressure on further integration, such as when the Soviet COMECON came with (at least formal) economic coordination which proved to be effective when dealing with the West. The EC responded with further foreign and commercial policy coordination which continued during 1970s and eventually culminated in the Single European Act in 1986 (Anderson 2006: 258–60).
However, Lundestad (1998: mainly chapter 7) describes the US support of the European integration as substantial only until the mid-1960s when European states grew into much more favourable economic and political situation than the one after the WWII. The 1960s also saw some communist states exploring the possibilities of more sovereignty on the expense of the USSR. In Finkelstein’s words (1969: 568), the US and the USSR had kept losing their “polar magnetism” attracting other states to join them. Although we can by no means speak about clear-cut rivalry (balancing), this is no longer a straightforward cooperation (bandwagoning), too.
Similarly, South America felt this hegemonic clash and subsequent development in posturing, too, albeit in their arguably subtler variations. Since the times of the Monroe doctrine, the US has been perceived as a much more ‘present’ superpower than the USSR (Oelsner 2005: 84–90). However, rather than practicing a complex foreign policy the states after the WWII (often under military dictatorships) rather focused on tackling their domestic issues, limiting themselves mostly to economic cooperation.
Initially, the creation of the OAS in 1948 was mostly welcomed as a step forward for the region. However, especially the South American states “failed to recognise [the divergence between the Latin American and US interests], which led them to hold high expectations for economic and military cooperation and assistance which, more often than not, went unfulfilled.” (Oelsner 2005: 83). Overtime, the US found it increasingly difficult to retain the level of regional influence (Pastor 2005: 205 mainly). The USSR, in turn, resorted to filling any gaps that the sporadic US withdrawals left, which the states greeted.7 In sum, a mild tendency to cooperate (bandwagon),if there is an incentive, can again be traced.
However, once free of their dictatorships the South American states in 1990s found themselves economically and politically stronger. MERCOSUR, CAN, UNASUR (although all more or less accepting the Washington consensus model) and especially ALBA (which is actually bound by anti-US agenda) have by no means accepted the US leadership; instead, these arrangements have rather pursued the way of (the EU-inspired) integration and the US exclusion (Gardini 2010, Tussie 2009).
Implications for Theory-building
How can this comparison be helpful in theory-building? From the presented evidence, it seems that the relations of regional arrangements (and the states constituting them) with hegemons are necessarily complex. Initially, when states are either weak or (sometimes only seemingly) offered significant incentives to cooperate, their response could be predominantly described in terms of cooperation (bandwagoning) for profit (as explored by Schweller 1994). However, when these same countries gain more relative power8 (either directly or by hegemons’ losses), the picture starts to change. Balancing (i.e. vis-à-vis international hegemons) comes partly in place of bandwagoning.9 Eventually, this can result in what is habitually called ‘defensive regionalism’ (Tussie 2009: 182–7) and become a factor of cohesion or further integration.
Relationship with Regional Power(s)
As Buzan and Weaver (2003: 37) describe them: “regional powers define the polarity of any given RSC [RSC – regional security complex, i.e. regional arrangement (for our purposes)]. Their capabilities loom large in their regions, but do not register much in a broad-spectrum way at the global level.” Additionally, Gardini (2010: 27) also calls these countries ‘paymasters’ which draws on their tendency to pay more of the integration costs than the other members. Such countries pursue policies that are significant for their respective regions and must be related to on a similar logic as in the previous category. More often than not they are also the most fervent proponents of integration in the region which stems from their high interdependence with the surrounding states (Laursen 2010b). In sum, regional powers’ roles in their respective regions have to be set in order to create meaningful regional arrangements.
In contrast to South America, the European situation is rather difficult in this respect. There are many centres of power around which politics revolve. Nevertheless, since the European integration process started, regional powers have been able to find or coerce their own roles in it. The UK as an exception at first did not believe in a supranational arrangement such as the EEC, starting its own alternative called EFTA instead and luring in strong countries such as Switzerland and Norway to emulate the competitor’s economic success. France and Germany, considered as clear regional powers today (Wood 1995), however, have proved to be able to offer a more appealing model of cooperation including the UK to finally turn the EU into the leading European arrangement. Interestingly, nowadays the consensus on the role of these three regional powers diverges once more which has developed pronounced discrepancies within the respective countries’ policies.
South America’s clear regional power is Brazil: for MERCOSUR alone, Brazil represents 70–80% of population and GDP (Gardini 2010: 15). Despite that, its importance has not always been widely recognised. In fact, Brazil slowly became a truly regional power only in the 1990s with the sensible government of president Cardoso solving many of its economic problems, followed by president da Silva ensuring Brazil also began to perceive itself as a regional (or even greater) power (Bethell 2010: 483–4). Nevertheless, the decreasingly hesitant Brazil (Finol 2010) has not had problems attracting cooperation on its integration projects as a traditional balance-of-power concept would predict: MERCOSUR strengthened and formalised the already high interdependence with Argentina and two ‘in-between’ states, while UNASUR helped Brazil eventually access the whole region. Botelho (2008: 322–3) goes deep in the causes for creation and evolution of UNASUR and asserts that the most important factor indeed was the cooperation of Argentina and Venezuela with Brazil as the regional power. Bermúdez Torres (2011: 223–6) not only agrees with it but also contemplates the future of UNASUR as the leading regional arrangement in South America thanks to the fact Brazil could assume the role of its (informal) leader. In contrast, the lack of a regional power incorporation has been stated as one of the reasons for CAN’s crisis (Godoy and Arana 2009).
Implications for Theory-building
On the systemic level, tendencies for cooperation (bandwagoning) and rivalry (balancing) were essentially tied to the distribution of capabilities. It seems that regional powers below international hegemons trigger slightly different responses to their behaviour. It is cooperation with them which is eventually the preferred choice. Apparently, there might be several reasons for cooperation. States can cooperate with a regional power on the basis of (inter-)dependence, or a regional power may attract states to create balancing alliances against others, etc. Interestingly, contrary to the usual realist instincts, strong cooperative (bandwagoning) tendency can be recognised in both patterns ‘weak-strong’ as well as ‘strong-strong’: once we find „more“ than one of the regional powers in the arrangement it is necessary that they develop a shared sense of their roles, otherwise the divergence could derail the whole arrangement.
Development Model to Adopt
What Gardini (2010) speaks about as the ‘development model to adopt’ can be imagined as a certain deal offered to and accepted by the states willing to create or join a certain integration arrangement. This idea involves an implicit or explicit agreement on the ‘path to follow’, which seems obvious at first but can present great problems when consensus on the right direction disappears. This category includes difficult decisions, such as which economic model to choose, how to perceive (potential) enlargement10, or simply what sectors and areas to include at the time of creation and which (if any) later.
Since the situations in Europe and South America are very similar in terms of economic models and are generally known (and thoroughly discussed elsewhere), let us deviate from the original subsection ordering and compare the two regions directly. This will with even greater clarity illustrate the potential in the issue-based comparison pursued here.
Europe and South America
The divisions (or similarities) between the adopted economic and development models have usually been clearly visible in these two regions especially. The course of COMECON (based on planned economy) could be clearly distinguished from the path the EC (liberal economy) chose, while ALBA is in the same way different from MERCOSUR. In the case of MERCOSUR and the EC, it was (at least initially) perceived that surrendering parts of sovereignty would lead to mutual gains and prosperity, while COMECON’s and ALBA’s goal was/is (in theory) to benefit the now-integrated peoples and their absolutely sovereign states by mutual support, aid and assistance in various areas – a goal similar enough but different nonetheless in its realisation.
However, as the case of the EU and its disconcert response to the on-going economic crisis can document, regional arrangements can walk astray with diverging opinions which leads to prevailing dissatisfaction. The topic has been seriously pondered recently. For example, Wallace et al. (2010: 488–500) summarised 6 points – challenges – to which the EU has to find common solutions or otherwise it could compromise its further stability. Additionally, The Economist highlighted unity on 4 development-related issues that would create the potential of the EU (and its currency) to survive (The Economist 2011).
It is also important to note that this deal might – and usually will – change. This change in the EU case came in various areas (e.g. changing nature of the CAP), was either in favour (SEA) or against further integration (Luxembourg Compromise), etc. Similar issues can be documented in case of MERCOSUR which initially strived to be a greater political force but whose creation eventually resulted in a mere economic arrangement that gained significance only through economy, but experienced a major setback when it was not able to form the common market it aspired to. Moreover, Uruguay and Paraguay at one point perceived they did not gain as much from the integration as Brazil and Argentina which eventually gave birth to the small Economic Convergence Fund, meant as a form of appeasement for the two countries (Gardini 2010: 14). CAN, in a similar fashion, lost a part of its energy when Chile and later Venezuela left for the more attractive MERCOSUR which (more in the case of the latter in the pair) marked a significant decrease in available funds and influence for the group. Eventually, it had to transform into a more social-welfare-oriented undertaking.
Implications for Theory-building
According to functionalist predictions, successful cooperation will grow into a more comprehensible approach. However, this direction must be approved ideally by all the members so as to prove effective and satisfactory. From the empirical evidence it seems that if the cooperation effort is marching in a way that states did not expect or did not agree to in the first place, the cohesion of the arrangement is compromised. Additionally, if it is immediately unsuccessful in its efforts or is marked by a setback, it tends to withdraw into safer waters.
Normative and Cultural Dimension
At first, it may seem that this category accommodates excessively vast scope of concepts ranging from normative approaches via identity-linked issues to polity-building. However, the common denominator sought for here is the endeavour to create a dedicated space for mainly constructivist scholarship within integration theories as even constructivists themselves have been divided into different ‘schools’, connecting and separating concepts such as norms, culture and discourse (Risse 2009). Consequently, it is very difficult to grasp them and operatively apply them with the aim of comparison as well as induced theory-building in mind. That is why the category has to be broad in order to allow as broad interpretations as possible, which can eventually provide some of the desired overlap. The overview here has chosen to briefly study the differences in identity (culture) and norms (especially democracy), which are two salient issues within the discourse relevant for our geographical focus.
Although it is overwhelmingly difficult to empirically tackle them, there have been certain recent investigations into these matters. As for identity and culture, Green (2000) and Gillespie and Laffan (2006) looked at construction and perception of the European identity (stemming from the EU) and established some evidence for its existence although the explanations for that may be various and not always fitting the reality. In fact, even the construction of the ‘region’ itself (which is needed first in order to subsequently construct its identity) falls subject to social construction (Neumann 2003). This all reinforces the motto of the EU “united in diversity” which, in fact, Zetterholm (1994) also affirms in his (not up-to-date, unfortunately) collection of articles on culture.
Normative research on Europe is quite recent and only EU-centric and was presented in a concise and ambitious fashion by Manners (2002) (cf. Hellquist 2007, Diez 2005). Tocci (2008) provides a persuasive empirical account of the EU as a normative actor and shows its weak and strong points on recent case studies, while Wagnsson (2010) speaks straight about ‘divided power Europe’ (i.e. divided on the perception of its norms). Last but not least, Mukhametdinov (2007: 216–20) blends norms with social cohesiveness and provides a comparative (mostly empirical) account of the EU versus Mercosur. The former is described as most disparate and not cohesive, remarking that “twenty-five EU member states cannot simply make one Europe” . This difference in perception of norms also gave rise to the CFSP which some states (can and do) opt-out from and others abstain from voting in (Anderson 2006: 264–5, Dover 2010: 245–7).
In order to prepare grounds for the like-with-like comparison of Europe and South America it would be interesting to speak about democracy in the former. On this matter, Gowland et al. (2006) describe the often slight divergences among the European states. Other authors focus on transitions to democracy which the Central and Eastern European states have very recent experience with despite the fact that the EU itself had a mixed record of democracy promotion towards the then-communist countries (Vachudová 2005). Hutcheson and Korosteleva (2006) bring a very balanced view on the matter in their collection of articles which assert that quality of democracy is very complex (Lewis 2006) and may be an issue also in the ‘older’ states of the EU, such as Italy or Greece (Berg-Schosser 2006), but overall seems to be on a lower level than in the Western societies.
Mukhametdinov (2007) portrays Mercosur (and South America as a whole) today as a coherent grouping.11 Moderating that, Alcantara (2005) concludes that Latin America (South America especially) indeed is a culturally almost homogenous region, however, slight national deviations have to be taken into account so as to avoid regional generalisations.
In terms of norms such as democracy, democratic governments have taken roots and are widely supported throughout the region, effectively sharing the same perception of the concept (Hellinger 2011: 4–15). Although Lagos (2008) interprets data from Latinobarómetro as only mildly supportive of democracy as a regime, in fact by interpreting the data on democracy in an aggregate fashion she implicitly affirms the existence of a common understanding of democracy in South America, which is more than Europe can say. As for other norms, especially human rights and the rule of law seem to be controversial issues but South America in its very recent history has had an increasingly strong record in the two areas to such a degree that Pitts and Taillant (2009: 186) speak about Latin America as having today “one of the most sophisticated and experienced systems for addressing human rights violations.”
Common or very similar perceptions of certain norms are a clear advantage for South American states when focusing on their treatment within the region. They have been able to establish credible commitments to these ideals and include them in the arrangements’ official documents. For example, UNASUR’s constitutive treaty firmly postulates the members’ commitment to “peace; democracy; […]; [and] universal human rights” (UNASUR 2008: preamble).12 Even ALBA is committed (at least officially) to democratisation, human rights and rule of law.13 MERCOSUR has in fact already acted on its democracy and human rights language by gathering a UN peacekeeping mission to Haiti in 2004 under the firm Brazilian leadership (which is particularly interesting in terms of our second comparative category) (Rohter 2004).
Implications for Theory-building
Expanding on the evidence and argument presented in the previous subsection, common understanding – implicit or explicit – of shared norms, values and identities can contribute tremendously to the stability and satisfaction of the arrangement and its members in the same way that the consensus on the ‘development model to adopt’ does. Shared perceptions on such issues also matter in external (self-)projections of the arrangement. Theoretically, this can also facilitate more integration in areas where heterogeneous regions might have problems.
Governance and Decision-making
The last category emerges to compare institutions and processes that are inevitably created either at or after the outset of a regional arrangement and is related to the preceding one in a complex way. The agreed style of governance and decision-making also at least partly reflect the common understanding of norms and values. Consequently, the institutions, rules and processes can be strong as well as weak, competent or incompetent; they are subject to change, interpretation, influence or ‘twisting’ on the part of the member states, etc. In fact, this category comparatively addresses how various arrangements solve the most painful collective action problems – fear of defection and just distribution of gains (Laursen 2010a, Haggard 1997).
First, this work does not want to (and cannot) delve into an institutional evaluation of all the European arrangements. Instead, it will provide a view on the EU as the most institutionalised arrangement in Europe and highlight an important period in its development which can emphasise some invaluable points of comparative potential with South America. This period is concisely and fittingly summarized in the chapter title by Ludlow (2006) – „From Deadlock to Dynamism: The European Community in the 1980s“ – who provides a splendid description of a ‘decline’ as well as a ‘golden era’ of one integration arrangement.
At the beginning of the chapter Ludlow introduces the ‘deadlock’ by portraying the dismal conditions of the EC in the 1970s (although Griffiths (2006) in the same book moderates such harsh statements) resulting in its unfavourable economic and political background. Economically, the 1970s were difficult for Western Europe. However, the US was in a much worse shape. In the (especially early) 1980s, the situation of the two was reversed and the EC’s was compounded by political disappointment of the new member states which realised they could not exert as much influence as they had thought they will (especially the UK). Even more important for our purpose is that “the EC’s institutional system seemed especially hard hit” (Ludlow 2006: 221) – depicting the endeavours of the UK to correct its EC budgetary anomaly14 together with the lack of leadership by the European Commission and disenchantment arising from the small role the new European Parliament played.
However, in the mid-1980s the situation started to improve rapidly. Jacques Delors leading the European Commission was not the only element of success. The French president Mitterrand together with German Chancellor Kohl were able to form a close partnership and together with others work towards the new EC grand goal of common market creation and ever closer cooperation,15 eventually giving birth to probably the most ambitious expansion of the European integration embodied in the SEA and Maastricht Treaty (Ludlow 2006).
First, it is necessary to state that the regional arrangements in South America clearly have overwhelmingly intergovernmental character.16 However, paradoxically, their institutions are implicitly or explicitly modelled on the EU template, which is to a high degree supranational. Without going more into detail, let us briefly compare ALBA, CAN, MERCOSUR, and UNASUR: their usual model has at its top a form of a presidential council taking the most important decisions (or unblocking stalemates), not dissimilar to the European Council. Below this level, there are various ministerial councils – clear resemblance to the Council of the EU. These are usually aided by some form of working groups, a committee of permanent representatives,17 commission drafting the final norms and implementing what political leadership has decided (clearly aiming to resemble the European Commission, however without its independence and legislative potential), and an administrative apparatus (which usually has its own budget, as an exception to the rule regarding the other bodies). Additionally, all these arrangements have their own parliaments (only as advisory bodies), with a surprising exception of ALBA.18
We can also notice a process similar to the case of the EU which Urwin (2010: 30–1) describes as “a roller-coaster ride, where the uphill and downhill gradients […] were the product of a multitude of factors.” However, we must admit that given the fact the arrangements are predominantly intergovernmental, the responsibility for development (or decline) rests disproportionately on their political leaderships.
Particularly illustrative is the case of CAN whose history is one of rise and fall. After its initial success, Chilean withdrawal from the pact in 1976 led to more than a decade of practical paralysis. In 1990s there was renewed motivation to integrate thanks to the revolutions empowering new governments, emphasising liberal market development. However, the defection of Venezuela in 2006 finally crippled the group to the level where rebound is not likely. Eventually, nobody wants to provide the necessary leadership or integration incentives for more active continuation of the process (Godoy and Arana 2009).
MERCOSUR has also seen its dark and bright moments. Initially (until approximately 1999), “as latecomers to the game, MERCOSUR members speeded up their economic integration process in an attempt to catch up with the rest of the world” (Paiva and Gazel 2003: 121). It developed a free trade area and originally aimed for a customs and monetary union. However, this two-fold goal has not been reached yet while the prospect for the future is not positive. Despite that, the second pursuit of further integration occurred between 2003 and 2007 with the members’ renewed motivation. This was somewhat diminished again with the accession of Venezuela that has not yet been fully implemented and has caused many intraregional disputes (Bermúdez Torres 2011, Gardini 2010).
Nevertheless, what is important to note is that both the CAN and MERCOSUR were able – at certain times – to exert political leadership with clear visions to overcome various setbacks. This resulted in reaching certain objectives (primarily the common market) by intergovernmental measures sooner than in the case of the more supranational EU (Lenz 2011, Godoy and Arana 2009, Gardini 2010).
Implications for theory-building
As Peters and Pierre (2009: 102) put it: “Governance and integration appear to have a circular relationship. That is, effective governance may produce greater integration, while at the same time high levels of integration may increase the capacity to govern. These virtuous cycles could, of course, be mirrored by a downward spiral into governance failure and disintegration.” Indeed, it seems that the level of leadership provided on the part of states or/and supranational elements is an important factor. In sum, a grouping seems to function most effectively when (a) there is convergence between the interests of its supranational element and the member states, and (b) if at least one of these parties is ready to provide the necessary leadership (Laursen 2010b).
In summary, this work has arrived at two findings related to the two objectives outlined in the introduction. First, a comparison of the South American and European integration processes is possible and can provide meaningful results once we compare on the like-with-like basis and embrace the idea that there are unique circumstances elsewhere which may (or may not) provide unique results. The 5 basic categories for such a comparison explored here are: 1) relationship with international hegemon(s), 2) relationship with regional power(s), 3) development model to adopt, 4) normative and cultural dimension and 5) governance and decision-making. It has been shown that all of them can affect arrangement’s functionality and efficiency in quite a significant way which manifests itself when there is no consensus on one of the issues.
Second, since this essay did not ask why regional arrangements emerge – which leaves the question open for further research, refinement or expansion of the model – it instead indiscriminately assembled theoretical knowledge of several major integration theories to study how regional arrangements are created, developed, and sustained. Therefore, by method of comparing various European and South American integration processes, several common tendencies and patterns have been emphasised. Subsequently, it can be argued that in order to create a truly effective and holistic theory of regional-integration-building these tendencies have to be included, treated and explained together, not disjointedly or asymmetrically: First, at the systemic level, hegemons’ behaviour sparks cooperation or rivalry. While cooperation (bandwagoning) is usually the initial choice for very weak arrangements, when they gather more strength relatively to the hegemon, balancing becomes a more visible strategy. Second, at the regional level, regional powers’ interests demand a serious role and consideration at and after the outset of a regional arrangement. This usually means cooperation with such a strong local player. Third, the arrangement has to have a clear vision and goals agreed and shared by all the members. If such a programme is successful, it has tendency to broaden its reach and vice versa. Fourth, pertaining to state as well as substate level, common norms and values can also bring substantial contributions, stability and satisfaction to the members of the grouping. Fifth, effective institutions and/or states’ leadership are able to strengthen and develop the arrangement by addressing collective action problems at the core of all negotiations.
Overall, these five conclusions (together with the five comparative categories) are hoped to lay the foundations for more fruitful discussions across disciplines and paradigms, which has been identified by many scholars as needed in order to progress with the study of regional integrations across the world.
List of Abbreviations
- ALBA – Bolivarian Alliance for the Peoples of Our America
- CAN – Andean Community of Nations
- COMECON – Council for Mutual Economic Assistance
- CFSP – Common Foreign and Security Policy
- ECSC – European Coal and Steel Community
- EEC – European Economic Community
- EFTA – European Free Trade Area
- GCC – Cooperation Council for the Arab States of the Gulf
- MERCOSUR – Common Market of the South
- OAS – Organisation of American States
- OECD – Organisation for Economic Cooperation and Development
- OEEC – Organisation for European Economic Cooperation
- SEA – Single European Act
- UNASUR – Union of South American Nations
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The author is currently a Master’s degree student at Aberystwyth University following the European Politics specialist degree scheme. Previously, he studied a Bachelor’s degree in International Relations and European Studies at Metropolitan University Prague. He also attended the Robinson-Martin Security Scholars Programme at Prague Security Studies Institute.
- This concept also partly draws on the methodological approach used by Mukhametdinov (2007).
- Please note that although there will be some references to ‘Latin America’, which is a wider and more frequently used concept (which that further complicates any comparison), these are made only in the cases where the respective author specifically speaks of ‘Latin’ instead of ‘South America’. Therefore, no interchangeability of the two is intended.
- Despite the fact that the USSR kept losing its economic might until the infamous and abrupt end of its existence it would be too naïve to think it had never had it (Desai 1987, Dyker 1976).
- The possibility of direct inclusion in the arrangement has to be considered under the heading of cooperation. This occurred in the case of the USSR and COMECON.
- Although neutrality is a theoretical third option, in empirical terms, no regional integration arrangement within the scope of this work has ever really adopted it. (Note that this work does not speak about neutrality adopted by some individual states.) Also, the nature or very existence of neutrality has been disputed: for more detail see Agius and Devine (2011), Goetschel (2011) and Karsh (1988).
- More on the topic of ‘taming Germany’ in Treverton (1992).
- More on the USSR in Latin America before 1989 in Mujal-León (1989).
- The author acknowledges that there are many explanations of power and discussions about its nature. However, this is considered as useful as long as it does not interfere with the empirically-proved implications the overarching concept induces. For a recent and comprehensive discussion of power see Barnett (2005).
- Even more salient example emerges when considering the newly independent and sovereign Eastern European countries striving to join the EU after revolutions in 1989. These clearly wanted to balance Russia and favoured joining the EU as it comprised most regional powers (as the next chapter in general discusses).
- A question ‘Where does the EU (Europe) end?’ would pertain here. It is a very topical and vigorously studied issue related to the broad area of enlargement (for example, see Wiarda 2002, Agnew 2005, Kuus 2005, Zielonka 2002). This hints that regional arrangements should also have their own shared descriptions of their respective regions.
- In contrast to Ryan (1947) decades ago.
- In Spanish original: “paz; democracia;[…]; derechos humanos universales”.
- For more information see http://www.alianzabolivariana.org/
- Referring to the UK contributing disproportionally much in comparison with other states which resulted in creating the UK ‘rebate’ (Neal 2007: 15).
- For more detail on Franco-German leadership see Bohn and de Jong (2011) who have recently studied the differences in leadership styles and political culture between France and German and thus explain the current divergent stance of the EU.
- It should be noted that CAN has pursued supranationalism the most, however, it is still on a low level.
- Although in theory this suggests some delegation of power from the hands of the presidents, in fact these representatives also work in civil services or parliaments of the member countries and thus only strengthen the intergovernmental grip of the states.
- It is surprising due to its officially social-oriented character. It would be only logical to include people’s representation into an organisation that frames itself as oriented at them.
The EU and South Asia may well be compared to Goliath and David except that fortunately they are not pitting their strengths against each other and this happens to be a 21st century forum to discuss growth for everyone.
To study whether the EU can be a role model for South Asia it may be well to first observe the differences and similarities of the two regions against a backdrop of studies on regional and multilateral trade. In its current avatar, the South Asian Free Trade Agreement (SAFTA) is a mere fledgling in the face of the two gigantic trade blocs in the making--the Enlarged European Union (EEU), the Free Trade Area of the Americas (FTAA) and the third possible East Asian Free Trade Agreement (EAFTA). SAFTA cannot compare with the EU in its historical advantage, its wealth or its experience.
It was in 1952 that six European countries established the European Coal and Steel Community. They pooled their resources in a common market that was controlled by an independent supranational authority. In 1958 this was extended to all economic sectors and by 1986 there were 12 countries in the Union. By 1993, the now 15-member union admitted 10 more "accession countries" . The common currency, Euro was launched completely by January 1, 2002. The dream of the founding fathers was that the EU would make Europe whole and free. The desire to enlarge is underlined by the aim to reach a scale of economic activity that could even challenge the supremacy of the US in world trade.
In comparison, South Asia can hardly talk of free trade when its members have yet to follow the process of market integration even within their markets. As things stand today, say in a country like India every state has enormous autonomy over trade matters right from taxes to procedures. These barriers must first go. Free trade between nations is a great idea but things like fiscal and monetary co-ordination are very far off where South Asia is concerned. Members have to first streamline their internal trade. 
Next, India’s unilaterally signed agreements with neighbours Sri Lanka and Bangladesh leave a lot to be desired. The perception of benefit in those countries should be strong but it isn’t. Dr Subir Gokarn  relates of a recent visit to Sri Lanka where the feel good factor was conspicuous by its absence. For instance, the Sri Lankans have looked forward to open Indian markets for their goods. But that has yet to happen. High non-tariff barriers like customs have so far marred the process. Exporters complain of shipment getting stuck for months while the Indian customs officials decide on what levies apply. Others complain about corruption and lobbying. A Sri Lankan tea exporter had his consignment berthed at the Chennai port for six months and then returned. The opportunities that were expected have not been utilized in these three years since the agreement was signed.
In the cases of the other major neighbors of India, Pakistan and China, the geo politics will definitely dictate. There have been random murmurs in India and Pakistan about segregating trade from politics but there is little economic exchange beyond Indian films, mostly pirated. With China, border disputes ruled the year long talks. The visiting Chinese premier, Wen Jiabao commented on how the two countries could successfully associate in the IT business with China and India being extremely competitive in hardware manufacture and software products and services respectively. However a preferential agreement may be far off. The trade volumes are way below the requirement and it may take ten years to get there. So the kind of trade arrangement, the growth and the wealth of the EU would be a dream for the developing South Asian nations and appear just as far-fetched as dreams can be. India would most certainly have to take the lead being the most successful democracy in the region but it will first have to settle its internal issues.
Yet, some people like Rajesh Chadha and Devender Pratap  believe that such a scenario may well be possible. However, to understand what they propose let us first understand that the EU itself has certain drawbacks that may be severely limiting for the developing nations of South Asia. Apart from the creation of the EU, the European Community (EC) has continuously created many layers of Preferential Trade Agreement (PTAs) with developing countries. It has recently started entering into Free Trade Agreements (FTAs) with far away countries like Chile and Mexico and South Africa. There are, according to economists, several different layers of EC integration. It is then very difficult to analyze and compute the benefits of such complex arrangements made by the EC on developing countries. Also, the impact of enlargement is not yet visible.
The poorer accession countries joining in have no guarantee of catch-up growth. The stakes in the process then seem high and benefits uncertain. Studies that examine the empirical evidence to evaluate the gains from trade for participating countries conclude that the evidence for increased growth rates of the EU countries is weak. It also finds that benefits in the form of higher growth rates accrue first to the large countries and then to some smaller countries.
Asia at large is already describing the same pattern. The number of PTAs in Asia is growing. The Association of South-East Asian Nations (ASEAN) and the South Asian Association for Regional Co-operation (SAARC) have both formed the AFTA and the SAPTA respectively. The Closer Economic Relations between Australia and New Zealand has deepened. Economists warn that such multi-layered regionalism that abounds in the Americas and Europe can camouflage a meaningful analysis at least by developing countries and the developed countries could turn out to be net gainers at their cost. 
Taking a leaf from the EU, should there be an Asian bloc beyond just South Asia and encompassing all of Asia? In recent times there have proposals towards larger co-operation. One such proposal suggested an ASEAN +3 (China, Japan, South Korea) + SAARC+ ESCAP (Economic and Social Council for Asia and the Pacific) scenario. Another proposed an RTA, JACIK (Japan, ASEAN, China, India, Korea).
The former is seen as a combination that could deliver on leadership in the Asian region that would in turn complement multilateralism but there is the concern of political motivation that could be counter productive. The latter speaks of enhancing global welfare but is non committal on whether this "welfare" stems from the growth of the participating countries or does it ensure welfare of the other countries of the region that may not be members 
What happens to the fate of the small countries within the FTAA, EEU, JACIK, ASEAN + 3 +SAARC + ESCAP? Do they really know whether to join the process of such "dinosauric blocalisation" or not? Do they actually understand enigmatic issue relating to the forthcoming Grand Agreements along with the issue relating to their existing liberalization commitments within the WTO? Can they afford the pecuniary costs involved? Do they have the requisite resources? Are the bilateral donors not going to maneuver the "capacity building exercise" in their own interest or else not build capacity? Would the regional initiatives, both bilateral and purilateral, not put pressure on whatever little intellectual capacity the small countries have away from multilateralism? These are the questions the duo asks.
Against the backdrop of these concerns they believe that the relatively smaller sub-region of South Asia can actually provide a lead to resolve the multilateralism versus regionalism dilemma. Their solution: open regionalism. This, they believe can successfully withstand the existence of what they call the "dinosauric blocs".
The two economists have done a computational analysis of available data to prove that a very successful model is possible in the Asian region that learns from regional arrangements such as the EU but opts for a modification. They have proposed a radical model that could get brickbats but may eventually gather momentum as it moves from one important ear to another.
They call their new bloc the OP_EUFTAA or the Open Economic Unification through the Free Trade Agreement of Asia. They choose 23 Asian countries in the computational exercise while others are free to join. The difference from the existing Big Two: The bloc would be openly benign in its trade relations with every other country/ region including the Big Two or another RTAs or even countries that don’t belong to any RTA.
The computational analysis relies on the data from the GTAP-5 Database of the Purdue University Centre for Global Trade Analysis Project that provides a picture of the world in 1997 when the ASEAN, SAARC, NAFTA and EU were in operation as preferential trading blocs. It simulates the economic effects of reduction of tariff barriers on trade across member countries. The study involves the four major SAARC members- India, Bangladesh, Pakistan and Sri Lanka and nine other countries/ regions namely China, ASEAN, NIEs, Japan, ANZ, NAFTA, EU, South America and "others" (all countries that do not belong to any of the earlier groups).
The first simulation is in two parts: the first with regional liberalization where trade barriers are maintained with countries outside the group and the second of open liberalization where the four countries eliminate import barriers from member countries as well as unilaterally for all other countries/ regions. Each simulation adds one more country/ region under the same two options.
The results may be interesting to note. In 1A, all the four countries benefit in welfare by 0.2 per cent to 2 per cent. They gain $2.3 billion in welfare in 1A (preferential liberalization) as also does the rest of the world. But this "world" gain accrues to the members of NAFTA and the EU only while others lose. In 1B (open regionalism) South Asia gains three times while global gains are nearly ten times as much. All regions and countries show larger gains.
As more countries are added in every successive simulation two things stand proven: 1) that as more regions of Asia join the bloc the gains for everyone involved are more and 2) the gains in the open regionalism are larger for everyone than in preferential regionalism. In the final scenario that includes all 23 Asian countries from different blocs, the South Asian countries gain $8.2 billion and the global gains are dramatically high at $ 289 billion against $7.1 billion and $113 billion respectively in the PL format. In fact in a case like Bangladesh only the open regional format brings it any welfare gains. In the other it actually stands to lose.
This may be probably the most favorable option for the developing countries of South Asia until that perfect, utopian time in the future when there is really free global trade. So while they continue to be a part of regional blocs for more reasons than trade perhaps, this system could give them a lot of the benefits of perfect, multilateral trade.
A pertinent, local example  can explain how trade between non bloc partners can only benefit both as well as hurt no one else. Take for example the pharmaceutical industry that has been so much in the news of late. India has immense potential in terms of high technological skills and production capacities that have MHRA and US-FDA approval. This could be the perfect place for the EU to shop when looking for cheaper generics to reduce the burgeoning healthcare and social security costs. This extra-bloc trade wouldn’t adversely affect India’s trade with its South Asian partners as manufacturers would clearly demarcate capacities for different markets. All its partners would benefit from its inexpensive drugs while India would gain a substantial trading volume.
So while South Asia can look at the EU to learn the lessons of simplifying internal trade, co-operation, patience and focus it may be better off looking at trade associations that lean towards multilateralism. Multilateralism seems to be the way for positive impact on economic welfare and real returns to labour and capital in both the industrialized and developing countries. Of course in practice other, often non-trade realities will exist and influence decisions and final associations. But this may be the path to find the answers to South Asia’s developmental blueprint.
References and Footnotes
1. The 10 countries: Cyprus, Malta, Czech Rep.,Slovakia, Hungary, Poland, Estonia, Latvia, Lithuania, Slovenia. Turkey follows. Bulgaria and Romania could join by 2007.
2. Interview with Dr Subir Gokarn, executive director and chief economist, CRISIL
3. Research paper by Rajesh Chadha, chief economist, The National Council of Applied Economic Research, (NCAER) New Delhi and colleague, Devender Pratap, The Dinosauric Blocalisation versus the Multilateral Liberalisation: Can the Lilliputan South Asian Free Trade Agreement Make a Difference?
4. Europe Enlarged: Understanding the Impact – Report by the Economist Intelligence Unit
5. The Asian Development Outlook 2002 as quoted in the Chadha and Pratap report.
6. Suresh Kare, president, Indian Drug Manufacturers’ Association (IDMA) in a written comment on the EU India Trade Relations in the pharmaceutical industry.