Interregionalism and the European Union

A Post-Revisionist Approach to Europe's Place in a Changing World

Mario Telò, Louise Fawcett, Frederik Ponjaert

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317113461
• Edition: 1
• Topic: Politik & Internationale Beziehungen
• Subtopic: Internationale Beziehungen

Is the EU isolated within the emergent multipolar world? Concentrating on interregional relations and focussing on the European Union's (EU) evolving international role with regards to regional cooperation, this innovative book collects a set of fresh empirical analyses of interregional ties binding the EU with its Eastern and Southern neighbourhood, as well as with Asia, Africa and the Americas. The 25 leading authors from 5 continents have contributed original and diverse chapters and the book advances a novel theoretical 'post-revisionist' approach beyond both the Eurocentrism of 'Europe First' perspectives as well as the Euroscepticism of those advocating to simply move 'Beyond Europe'. After a Foreword by A. Acharya, the book's five sections reflect the main drivers of EU interregional policies: The European Union as a Sophisticated Laboratory of Regional and Interregional Cooperation (with chapters by M. Telò, L. Fawcett and T. Risse), De Facto Drivers of Regionalism (F. Ponjaert, M. Shu, A. Valladão and C. Jakobeit), De Jure Drivers of Regionalism (S. Lavenex, G. Finizio, C. Jakobeit, R. Coman, C. Cocq & S. Teo L-Shah), Cognitive Drivers of Regionalism (J. Rüland, E. Fitriani, S. Stavridis & S. Kingah, P. Bacon), and Instrumental Drivers of Regionalism (B. Delcourt, C. Olsson & G. Müller, A. Malamud & P. Seabra and L. Fioramonti & J. Kostopoulos).

PART I
European Integration Studies as a Reference for Regional and Interregional Cooperation

Chapter 1
Contribution to a Periodization of Comparative Regionalist Studies

Mario Telò

The Gradual Emergence of an Autonomous Research Agenda Beyond the Neo-realist Tradition and the Global Free Trade Liberal Approach

The history of regionalist and interregionalist studies can be summarized as a process of gradual emancipation from two alternative approaches to global governance and world order: orthodox state-centred realism and a free trade liberal understanding of globalization. Both traditions have provided regionalist studies with very stimulating input: on the one hand, insights into power politics and intergovernmentalism as shaping factors behind the regional grouping of states; and, on the other hand, functionalist and neo-functionalist research on the dynamics of European and regional integration processes starting from free trade areas. However, the complex and growing phenomena of regional cooperation has increasingly called for further theoretical innovation and more sophisticated approaches. To this effect, neo-institutionalism offers a framework for a more consolidated autonomy of the regional research agenda, notably in the context of the twenty-first century’s controversial global governance.

This chapter starts by presenting the historical development of regionalist studies as a search for growing epistemological autonomy. Comparative multidisciplinary literature focusing on the interplay between economic and political regionalism/interregionalism¹ evolved along four periods after 1945:

1. the pioneering literature focusing on the centrality of the European Community (EC);

2. the controversy about regionalization versus liberal globalization;

3. the turning point of the 1990s stressing the historical and political dimensions; and

4. the period when the neo-regionalist paradigm was consolidated and confronted the emergent comparative research on challenges at the start of the twenty-first century.

Consistently, Chapter 3 offers three arguments in favour of the revived centrality of an autonomous and path-breaking regionalist/interregionalist research agenda and shows its potential for innovation both in international relations and area studies, including EU studies.

The Early Literature after the Second World War: Economic Regional Integration as a Relatively Marginal Phenomenon within the Pax Americana

The pioneering period of regionalist studies was influenced by the fact that, in the context of the bipolar system (and the Pax Americana in the non-communist world), the political implications of regional economic integration, even if recognized, were not yet seriously deepened. Regionalist studies (as subject area) have a long historical background.

Contemporary research began in the late 1950s and early 1960s with some innovative books coming from the American intellectual traditions of either the East or the West Coast. For its part, the West Coast-centred functionalist and neo-functionalist streams are largely rooted on a partial revision of Mitrany’s key research (1966 [1943]). Contributions set into motion by Ernst Haas were thus able to better combine the territorial and functional dimensions of region-building (Haas, 1958 and 1964; Haas and Schmitter, 1964; Schmitter, 1970). This strand of research was picked up and continued by Lindberg and Scheingold (Lindberg and Scheingold, 1971), who mainly focused on economic integration and the role of internal and transnational pressure groups. Haas articulated a clear distinction between regional integration and cooperation, hence underlining the potential for bottom-up dynamics able to challenge national sovereignties. Simultaneously, Amitai Etzioni was the first to compare the United Arab Republic, the Federation of West Indies, the Nordic Association and the European Economic Community (Etzioni, 1965). Moreover, Karl Deutsch’s ‘security community’ concept (Deutsch and Burrell, 1957) explicitly saw regional cooperation defy the orthodox understanding of the ‘security dilemmas’ that are central to the realist tradition.

On the other hand, research accomplished by the leading figures of the East Coast intellectual tradition such as Stanley Hoffmann (1966) and Joseph Nye (1971) saw the post-realist school focus on regional intergovernmental cooperation as a way of conflict prevention and ‘complex interdependence’ (a concept jointly developed with R.O. Keohane) management at the regional level.

It is noteworthy that both of these intellectual traditions were born out of critical assessments of mainstream (neo-realist) International relations theory and that despite the well-documented divergences between neo functionalists and liberal intergovernmentalists, both explored the particular significance of the regional level within the international system. An essential thesis shared by the two critical streams emphasizes the creation and the resilience of a new social phenomenon: regional organizations. This thesis was and still is a relative indictment of the conventional wisdom of the state-centric international relations paradigm as states were far from being the sole meaningful unit and level of analysis in international relations. A plurality of multiple players had emerged, among them various regional entities. Economic cooperation was not only an inter-state power issue at stake, but also one of the driving factors behind an international system characterized by quickening regionalization and increasing interdependencies.

However, this early regionalist literature was inevitably conditioned by the historical context of the global Cold War. Both schools shared the idea that the bipolar world order was a kind of security umbrella for regional economic cooperation within the US spheres of influence. Consequently, two important dimensions of regional cooperation were largely underestimated: the political dimension of regional economic cooperation and its potential influence on the global order, and the distinct endogenous development of regional cooperation in the global South (Acharya, 2014b).

Both intellectual traditions shared a paradigmatic Eurocentric focus, even if Nye did show that ‘Panamericana’ was the first regional organization ever (see Chapter 6). Beyond these foundational academic debates and even before the formal start of the Cold War, American policy-makers had been set on a long-term path focusing on the global rather than the regional level of the forthcoming global order. Indeed, between 1943 and 1945, the struggle between regionalism and globalism within Theodore Roosevelt and Harry S. Truman’s administrations was decided in favour of the latter. Indeed, it was globalist voices such as that of Cordell Hull (State Secretary) that emerged strengthened from such controversies as the hesitation – both within the Roosevelt administration and between the US and Winston Churchill – regarding possible alternative balances to the global multilateral system topped by the UN and Bretton Woods systems. The two compromises set by Chapter VIII of the San Francisco Charter and the Article XXIV of the General Agreement on Tariffs and Trade (GATT) did leave a window of opportunity for the regional dimension of governance, but only in a secondary role. Furthermore, both politically and academically, the regional level became even more marginal in the face of the bi-polar imperatives of the Cold War urgencies and the resulting global priorities of both the US and the USSR.

From historical institutionalism, we learn the importance of the international status quo based on the bipolar world’s structure. The primacy provided by the US ‘coalitional hegemony’ (Clark, 2011) to the global level of the international order proved quite detrimental to the political relevance of the regional dimension. The pluralist traditions of political thought underlining the potential benefits to global governance born out of cooperation between groups of neighbouring states remained of secondary importance throughout the long-lasting bipolar system (1947–91) and the primacy of systemic neo-realism, which stressed the global nature of US interests and security challenges such as the containment of the global Soviet threat. Critical research centred mainly on US-centric coalitions with like-minded states and local social forces (Cox, 1998), whether driven by bilateral or multilateral dynamics. Certainly, the European supranational regionalism after 1945 was a Western project, but as a pre-political one it fitted a form of subordinated regional regime-building (Gilpin, 2000).

On the economic side, the embedded liberal transatlantic construct (Ruggie, 1993) was a compromise between the US preference for a global system and the Europeans’ regional path to reconstruction rooted in the institutionalization of their own regional interdependencies (Milward, 1984). This tension between the global American project and the regional European one remained veiled and under-investigated during the height of the bipolar world. However, this tension would re-emerge in the 1970s in light of both the declining efficiency and legitimacy of US as well as the mounting politicization of regionalism on various continents.

On the whole, the marginality of the distinctive political dimension of regionalism in the era of the Pax Americana and the open liberal order shaped by the US were reconciled within mainstream regional research by focusing on merely functional economic experiences, such as that of the small European communities. To that effect, the classic book by Béla Balassa (1961) was of great importance within the academic debate. The Hungarian economist established an European Community (EC)-centred typology of regional organizations that echoed the liberal order and past experiences of state-building by distinguishing five evolutionary stages of an asserted universal paradigm of regional integration:

1. free trade agreement (FTA);

2. customs union;

3. common market;

4. economic and monetary union; and ultimately

5. political union.

According to this teleological model, every regional regime, whatever the geographical and historical context, was to be analysed through the lens of this five-step paradigm, thus ignoring the profound diversities among continents and their specific cooperation dynamics. If increasingly controversial, the Belassa approach has nevertheless remained very influential within regional studies (Tinbergen, 1965).

The critical juncture signified by the decisions taken by the two superpowers (i.e. US and USSR) between 1944 and 1947 entailed long-term policy paths which adversely affected the prospects for both regional governance and regionalist studies. As a result, the comparative dimension not only remained unexplored for decades, but the broader questions related to the interplay between bottom-up regional cooperation and the wider evolution of the global order were also under-analysed.

The Debate about the Regionalist Discrepancy with the Economic Liberal Agenda and the Acknowledgment of Regionalism as an Enduring and Multicausal Phenomenon

Unsurprisingly, the second period of regionalist studies emerged after a second critical juncture: the end of the Cold War. This was a period when the international context was to dramatically change, prompting both the transformation of pre-existing regional groupings and the creation of new ones. This new chapter in regionalist research was characterized by the largely shared recognition that regionalism varied not only over time and space, but also in view of changing forms of global governance that were the result of new technologies and policy challenges. Regardless of one’s normative assessment of its impact on world order and internal welfare, regionalism had become an accepted reality within the global order. Within the context of an ever accelerating push towards greater globalization, the importance of the regional dimension was reflected in the generalization of trade regionalization dynamics and the global diffusion of FTAs on the one hand and the increasingly multidimensional and multicausal nature of regional cooperation on the other. Moreover, with the end of the constrictions associated with the bipolar world, the quickening politicization of regionalism, as illustrated by the transformation of the EC into the European Union (EU), was by no means an exception, but rather was a general tendency emerging in every continent.

However, this largely shared recognition of a more political form of regional cooperation which would spread across the globe according to a variety of locally determined paths would promptly raise a new normative controversy that went to the very heart of the question raised at the start of this chapter. Whereas none of first-generation authors had explicitly framed regional studies as a normative competitor to the global economic liberal approach, in the early 1990s Jagdish Bhagwati and other relevant economists warned of the increasing conflict between regionalism and ‘free trade for all’ (1993. As the latter became one of the driving idea behind the ‘liberal peace’ emerging from the end of the Cold War (Fukuyama, 1992), the potential tensions between regional and global multilateral agendas became paramount. However, in spite of his negative disposition towards regional trade deviation, even Bhagwati paradoxically joined the neo-regionalists by conceding the emergence and consolidation of regional arrangements as a part of global economic and political changes: the emergence of multidimensional regional entities was driven by multiple causes going beyond actors’ rational choices. Bhagwati defined regionalism as a ‘preferential trade agreement among a subset of nations’ as opposed to global multilateralism which is rooted in a universal application of the Most Favoured Nation (MFN) clause. Regionalism was accused of being discriminatory, politically ‘unwise’ and provoking trade diversion; furthermore, it would ultimately decrease its members’ welfare.

Bhagwati’s reservations about the emerging ‘second wave of regionalism’ were formulated in the context of accelerating globalization. The global multilateral framework set between the conferences of Bretton Woods (1944) and Havana (GATT, 1947) had grown and deepened in scope while still allowing regional arrangements to develop as a ‘second best’ option. Regional cooperation was merely framed as a derogation from the general rules as described in Article XXIV of GATT In its support for the construction of a hegemonic international order, the US had agreed to accommodate social democratic goals and a kind of social protectionism both at the national and regional levels (Clark, 2011). Bhagwati challenged Article XXIV and the ‘illusions’ which conceived of regionalism as ‘building (rather than stumbling) blocks for a multilateral free trade for all’ (Bhagwati, 1993: 27). He strongly denounced the ‘political pressures for approval of substantial regional groupings’, with a special reference to the European Coal and Steel Community and the European Common Market, as breaking GATT legal discipline. In the same text he defended the idea of ‘full integration of trade’ as creating ‘an important element of single nation characteristics among these nations’ (Bhagwati, 1993: 26). Consequently, the compromise between global multilateralism and regional markets accepted after the Second World War under the umbrella of US hegemony was questioned in light of a newly assertive global multilateralism. Not only were the characteristics of the EEC/EU as a ‘politically beneficial union’ denounced as inferior to a more rational global solution (Bhagwati, 1993: 29), but other regional free trade areas were also accused of providing developing countries with sub-optimal alternatives.

The global ‘free trade for all’ criticism developed powerful arguments against both simply equating regionalization and liberal globalization, and explaining regionalism merely in light of rational choice institutionalism. This controversy is to some extent a perennial feature of the economic debate,² yet such complex social phenomena as regional cooperation call for more sophisticated neo-institutionalist research beyond mere rational choice calculations. The importance of such a nuanced approach was underlined with the US sudden conversion of 1993–4 from globalism to regional and preferential trade liberalization, which took the orthodox global trade rationality totally by surprise. Washington’s re-alignment in favour of more regionalism and Preferential Trade Agreements (PTAs) was not only the product of some kind of ‘domino effect’ responding to the widely held perception of a ‘European fortress’, but was also a step towards a new trade strategy. FTAs with Israel and Canada were followed by initiatives favouring regional free trade areas in two of the major economic interregional hinterlands of the US: the Americas and the Asia-Pacific region. In 1992 the creation of the North American Free Trade Agreement (NAFTA) marked the first US foray into regional discriminatory trade areas under Article XXIV (Sbragia, 2007) and it was to serve as a first successful step in a decade-long yet ultimately thwarted interregional project supporting a hemispheric Free Trade Area of the Americas (FTAA) from Alaska to Patagonia (Deblock, 2014; Valladão, Chapter 6 in this volume). In parallel, Washington would also launch the Asia-Pacific Economic Community (APEC, 1994), which was set up in support of the ultimately unsuccessful process towards an Asia-Pacific Free Trade Area (AFTA), which at Washington’s behest would be – almost two decades later – supplanted by a more complex two-level set of preferential trade negotiations gathered within the Trans-Pacific Partnership (TPP, 2008).

Over time, economists such as Thurow, Dornbush and those from the ‘Memorial Drive’ school had come to support regionalism as an alternative to ‘postwar America’s altruism’, as supplementary to global multilateralism or even as an accelerating factor (Bergsten, 1994). Contrary to Ruggie, Keohane and the emerging neo-regionalist literature, Bhagwati never recognized the multilateral features of regional arrangements. Multiple causes – commercial, political, historical, cultural and others – explain the diffusion of the second wave of regional blocs and interregional arrangements. Custom unions and/or PTAs would still essentially appear as more expedient and less risky alternatives to the more rational and (according to free trade liberalism) normatively superior global option. In the end, in the eyes of both policy-makers and free trade liberal analysis, the second wave of regionalism would remain an ‘unfortunate tendency’, which was to remain contained so as to limit its damaging side-effects as much as possible.

The enduring principled debate regarding the optimal scale of trade liberalization continues today and echoes the normative debates surrounding the ‘optimal size currency area’. In both cases tensions come from the confrontation between, on the one hand, the abstract logic of rationalism and, on the other hand, the institutionally embedded coping mechanisms set up to deal with the multiple causes driving multidimensional regional entities. The utopia of a free trade for all, ‘similar to a single nation’ implies a global normative approach which necessarily marginalizes the enduring, resilient and even expanding role of regional and interregional arrangements within increasingly multilayered global governance. Notwithstanding such negative judgements of the second wave of regionalism, its critics have made a stimulating theoretical contribution by highlighting the divergences between global liberalization and regional arrangements.

Since then, even the debate among leading economists (Krugman, 1993; De Melo and A. Panagariya, 1995; Baldwin, 1997) clearly identified the plurality of causes of regionalization. Of course, akin to its dialectic relation to realist and neo-realist perspectives focusing on mere inter-state dynamics, the regionalist research agenda must respond to the challenges raised by the global liberal free trade agenda. Nevertheless, both the epistemic communi...