Regional Integration is a process in which neighboring countries enter into an agreement in order to upgrade cooperation through common institutions and rules. The objectives of the agreement could range from economic to political to environmental, although it has typically taken the form of a

political economy Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour ...

initiative where commercial interests are the focus for achieving broader socio-political and security objectives, as defined by national governments. Regional integration has been organized either via supranational institutional structures or through intergovernmental

decision-making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either ra ...

, or a combination of both. Past efforts at regional integration have often focused on removing barriers to

free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...

in the region, increasing the free movement of people, labour,

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not ...

, and

capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used fo ...

across

national border Borders are usually defined as geographical boundaries, imposed either by features such as oceans and terrain, or by political entities such as governments, sovereign states, federated states, and other subnational entities. Political border ...

s, reducing the possibility of regional

armed conflict War is an intense armed conflict between states, governments, societies, or paramilitary groups such as mercenaries, insurgents, and militias. It is generally characterized by extreme violence, destruction, and mortality, using regul ...

(for example, through

Confidence and Security-Building Measures Confidence-building measures (CBMs) or confidence- and security-building measures (CSBMs) are actions taken to reduce fear of attack by both (or more) parties in a situation of conflict. The term is most often used in the context of armed conflict, ...

), and adopting cohesive regional stances on policy issues, such as the environment, climate change and migration. Intra-regional trade refers to

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exc ...

which focuses on

economic An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...

exchange primarily between countries of the same region or economic zone. In recent years countries within economic-trade regimes such as

ASEAN ASEAN ( , ), officially the Association of Southeast Asian Nations, is a political and economic union of 10 member states in Southeast Asia, which promotes intergovernmental cooperation and facilitates economic, political, security, milita ...

Southeast Asia Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical south-eastern region of Asia, consisting of the regions that are situated south of mainland ...

for example have increased the level of trade and commodity exchange between themselves which reduces the

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...

and

tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...

barriers associated with foreign markets resulting in growing prosperity.

Overview

Regional integration has been defined as the process through which independent national states "voluntarily mingle, merge and mix with their neighbors so as to lose the factual attributes of sovereignty while acquiring new techniques for resolving conflicts among themselves." De Lombaerde and Van Langenhove describe it as a worldwide phenomenon of territorial systems that increases the interactions between their components and creates new forms of

organization An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived f ...

, co-existing with traditional forms of state-led organization at the national level.De Lombaerde, P. and Van Langenhove, L: "Regional Integration, Poverty and Social Policy." ''Global Social Policy'' 7 (3): 377-383, 2007. Some scholars see regional integration simply as the process by which states within a particular region increase their level interaction with regard to economic, security, political, or social and cultural issues. In short, regional integration is the joining of individual states within a region into a larger whole. The degree of integration depends upon the willingness and commitment of independent sovereign states to share their

sovereignty Sovereignty is the defining authority within individual consciousness, social construct, or territory. Sovereignty entails hierarchy within the state, as well as external autonomy for states. In any state, sovereignty is assigned to the perso ...

. The deep integration that focuses on regulating the business environment in a more general sense is faced with many difficulties. Regional integration initiatives, according to Van Langenhove, should fulfill at least eight important functions: * the strengthening of

integration in the region * the creation of an appropriate enabling environment for

private sector The private sector is the part of the economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The ...

development * the development of

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...

programmes in support of

economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate o ...

and regional integration * the development of strong

public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, inf ...

institutions and

good governance Good governance is the process of measuring how public institutions conduct public affairs and manage public resources and guarantee the realization of human rights in a manner essentially free of abuse and corruption and with due regard for th ...

; * the reduction of

social exclusion Social exclusion or social marginalisation is the social disadvantage and relegation to the fringe of society. It is a term that has been used widely in Europe and was first used in France in the late 20th century. It is used across discipline ...

and the development of an inclusive

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere.environment Environment most often refers to: __NOTOC__ * Natural environment, all living and non-living things occurring naturally * Biophysical environment, the physical and biological factors along with their chemical interactions that affect an organism or ...

programmes at the regional level * the strengthening of the region's interaction with other regions of the world. The crisis of the post-war order led to the emergence of a new global political structure. This new global political structure made obsolete the classical Westphalian concept of a system of sovereign states to conceptualize world politics. The concept of sovereignty became looser and the old legal definitions of the ultimate and fully autonomous power of a

nation-state A nation state is a political unit where the state and nation are congruent. It is a more precise concept than "country", since a country does not need to have a predominant ethnic group. A nation, in the sense of a common ethnicity, may in ...

are no longer meaningful. Sovereignty, which gained meaning as an affirmation of cultural identity, has lost meaning as power over the economy. All regional integration projects during the

Cold War The Cold War is a term commonly used to refer to a period of geopolitical tension between the United States and the Soviet Union and their respective allies, the Western Bloc and the Eastern Bloc. The term '' cold war'' is used because t ...

were built on the Westphalian state system and were designed to serve

as well as security motives in their assistance to state building goals. Regional integration and

globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...

are two phenomena that have challenged the pre-existing global order based upon sovereign states since the beginning of the twenty-first century. The two processes deeply affect the stability of the Westphalian state system, thus contributing to both disorder and a new global order. Closer integration of neighbouring economies has often been seen by governments as a first step in creating a larger regional market for

and

investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...

. This is claimed to spur greater efficiency,

productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...

gain and

competitiveness In economics, competition is a scenario where different economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the same (legal) firm ...

, not just by lowering border barriers, but by reducing other costs and risks of trade and investment. Bilateral and sub-regional trading arrangements have been advocated by governments as economic development tools, as they been designed to promote economic deregulation. Such agreements have also aimed to reduce the risk of reversion towards

protectionism Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulation ...

, locking in reforms already made and encouraging further

structural adjustment Structural adjustment programs (SAPs) consist of loans (structural adjustment loans; SALs) provided by the International Monetary Fund (IMF) and the World Bank (WB) to countries that experience economic crises. Their purpose is to adjust the co ...

. Some claim the desire for closer integration is usually related to a larger desire for opening nation states to the outside world, or that regional economic cooperation is pursued as a means of promoting development through greater efficiency, rather than as a means of disadvantaging others. It is also claimed that the members of these arrangements hope that they will succeed as building blocks for progress with a growing range of partners and towards a generally freer and open global environment for trade and investment and that integration is not an end in itself, but a process to support economic growth strategies, greater

social equality Social equality is a state of affairs in which all individuals within a specific society have equal rights, liberties, and status, possibly including civil rights, freedom of expression, autonomy, and equal access to certain public goods and ...

and

democratisation Democratization, or democratisation, is the transition to a more democratic political regime, including substantive political changes moving in a democratic direction. It may be a hybrid regime in transition from an authoritarian regime to a full ...

. However, regional integration strategies as pursued by economic and national interests, particularly in the last 30 years, have also been highly contested across civil society. There is no conclusive evidence to suggest that the strategies of economic deregulation or increased investor protection implemented as forms of regional integration have succeeded in contributing to "progress" in sustainable economic growth, as the number of economic crises around the world has increased in frequency and intensity over the past decades. Also, there is increasing evidence that the forms of regional integration employed by nation states have actually worsened social inequality and diminished democratic accountability. As a result of the persisting contradiction between the old promises of regional integration and real-world experience, the demand from across global civil society for alternative forms of regional integration has grow

Regional integration arrangements are a part and parcel of the present global economic order and this trend is now an acknowledged future of the international scene. It has achieved a new meaning and new significance. Regional integration arrangements are mainly the outcome of necessity felt by nation-states to integrate their economies in order to achieve rapid economic development, decrease conflict, and build mutual trusts between the integrated units. The nation-state system, which has been the predominant pattern of international relations since the Peace of Westphalia in 1648 is evolving towards a system in which regional groupings of states is becoming increasingly important vis-a-vis sovereign states. Some have argued that the idea of the state and its sovereignty has been made irrelevant by processes that are taking place at both the global and local level.

Walter Lippmann Walter Lippmann (September 23, 1889 – December 14, 1974) was an American writer, reporter and political commentator. With a career spanning 60 years, he is famous for being among the first to introduce the concept of Cold War, coining the te ...

believes that "the true constituent members of the international order of the future are communities of states." E.H. Carr shares Lippmann view about the rise of regionalism and regional arrangements and commented that "the concept of sovereignty is likely to become in the future even more blurred and indistinct than it is at present."

Regional integration agreements

Regional integration agreements (RIAs) have led to major developments in international relations between and among many countries, specifically increases in international trade and investment and in the formation of regional trading blocs. As fundamental to the multi-faceted process of globalization, regional integration has been a major development in the international relations of recent years. As such, Regional Integration Agreements has gained high importance. Not only are almost all the industrial nations part of such agreements, but also a huge number of developing nations too are a part of at least one, and in cases, more than one such agreement. The amount of trade that takes place within the scope of such agreements is about 35%, which accounts to more than one-third of the trade in the world. The main objective of these agreements is to reduce trade barriers among those nations concerned, but the structure may vary from one agreement to another. The removal of the trade barriers or liberalization of many economies has had multiple impacts, in some cases increasing Gross domestic product (GDP), but also resulting in greater global inequality, concentration of wealth and an increasing frequency and intensity of economic crises. The number of agreements agreed under the rules of the GATT and the WTO and signed in each year has dramatically increased since the 1990s. There were 194 agreements ratified in 1999 and it contained 94 agreements form the early 1990s. The last few years have experienced huge qualitative as well as quantitative changes in the agreements related to the Regional Integration Scheme. The top three major changes were the following: * Deep Integration Recognition * Closed regionalism to open model * Advent of trade blocs

Deep Integration Recognition

Deep Integration Recognition analyses the aspect that effective integration is a much broader aspect, surpassing the idea that reducing tariffs, quotas and barriers will provide effective solutions. Rather, it recognizes the concept that additional barriers tend to segment the markets. That impedes the free flow of goods and services, along with ideas and investments. Hence, it is now recognized that the current framework of traditional trade policies are not adequate enough to tackle these barriers. Such deep-integration was first implemented in the Single Market Program in the European Union. However, in the light of the modern context, that debate is being propounded into the clauses of different regional integration agreements arising out of increase in international trade. (EU).

Closed regionalism to open model

The change from a system of closed regionalism to a more open model had arisen out of the fact that the section of trading blocs that were created among the developing countries during the 1960s and 1970s were based on certain specific models such as those of import substitution as well as regional agreements coupled with the prevalence generally high external trade barriers. The positive aspects of such shifting is that there has been some restructuring of certain old agreements. The agreements tend to be more forward in their outward approach as well as show commitment in trying to advance international trade and commerce instead to trying to put a cap on it by way of strict control.

Trade blocks

The Advent of Trade Blocks tend to draw in some parity between high-income industrial countries and developing countries with a much lower income base in that they tend to serve as equal partners under such a system. The concept of equal partners grew out of the concept of providing reinforcement to the economies to all the member countries. The various countries then agree upon the fact that they will help economies to maintain the balance of trade between and prohibit the entry of other countries in their trade process. An important example would be the

North American Free Trade Area The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that cre ...

, formed in 1994 when the Canada - US

Free Trade Agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...

was extended to Mexico. Another vibrant example would entail as to how EU has formed linkages incorporating the transition economies of

Eastern Europe Eastern Europe is a subregion of the European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural, and socio-economic connotations. The vast majority of the region is covered by Russia, whi ...

through the Europe Agreements. It has signed agreements with the majority of

Mediterranean The Mediterranean Sea is a sea connected to the Atlantic Ocean, surrounded by the Mediterranean Basin and almost completely enclosed by land: on the north by Western and Southern Europe and Anatolia, on the south by North Africa, and on ...

countries by highly developing the EU-Turkey customs union and a Mediterranean policy. Vysegrád four is a group of states co-operating in order to achieve higher economic results

Recent regional integration

Regional integration in Europe was consolidated in the Treaty on the European Union (the

Maastricht Treaty The Treaty on European Union, commonly known as the Maastricht Treaty, is the foundation treaty of the European Union (EU). Concluded in 1992 between the then-twelve member states of the European Communities, it announced "a new stage in the ...

), which came into force in November 1993 and established the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

. The

European Free Trade Association The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland. The organization operates in parallel with the European U ...

is a free trade bloc of four countries (Iceland, Liechtenstein, Switzerland and Norway) which operates in parallel and is linked to the European Union. In January 1994, the

North American Free Trade Agreement The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that crea ...

was formed when Mexico acceded to a prior-existing bilateral free trade agreement between the US and Canada. In The Pacific there was the

Free Trade Area (AFTA) in 1993 which looked into reducing the tariffs. The AFTA started in full swing in 2000.

Alternative Regional Integration

In the last decade regional integration has accelerated and deepened around the world, in Latin America and North America, Europe, Africa, and Asia, with the formation of new alliances and trading blocks. However, critics of the forms this integration has taken have consistently pointed out that the forms of regional integration promoted have often been

neoliberal Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent f ...

in character, in line with the motives and values of the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...

, the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...

and the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...

- promoting financial deregulation, the removal of barriers to capital and global corporations, their owners and investors; focusing on

industrialisation Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...

, boosting global trade volumes and increasing

GDP Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is ofte ...

. This has been accompanied by a stark increase in global inequality, growing

environmental problem Environmental issues are effects of human activity on the biophysical environment, most often of which are harmful effects that cause environmental degradation. Environmental protection is the practice of protecting the natural environment on t ...

s as a result of industrial development, the displacement of formerly rural communities, ever-expanding urban

slum A slum is a highly populated urban residential area consisting of densely packed housing units of weak build quality and often associated with poverty. The infrastructure in slums is often deteriorated or incomplete, and they are primarily ...

s, rising

unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...

and the dismantling of social and environmental protections. Global financial

deregulation Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulation of the economy. It became common in advanced industrial economies in the 1970s and 1980s, as a ...

has also contributed to the increasing frequency and severity of economic crises, while Governments have increasingly lost the sovereignty to take action to protect and foster weakened economies, as they are held to the rules of

implemented by the WTO and IMF. Advocates of alternative regional integration argue strongly that the solutions to global crises (

financial Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of f ...

environmental A biophysical environment is a biotic and abiotic surrounding of an organism or population, and consequently includes the factors that have an influence in their survival, development, and evolution. A biophysical environment can vary in scal ...

, climate, energy, health, food, social, etc.) must involve regional solutions and regional integration, since they transcend national borders and territories, and require the cooperation of different peoples across geography. However, they propose alternatives to the dominant forms of neoliberal integration, which attends primarily to the needs of transnational corporations and investors. Renowned economist, Harvard professor, former senior vice president and chief economist of the World Bank,

Joseph Stiglitz Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the J ...

has also argued strongly against neoliberal

globalisation Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...

(see

Neoliberalism Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent f ...

). Stiglitz argues that the deregulation, free trade, and social spending cuts or austerity policies of neoliberal economics have actually created and worsened global crises. In his 2002 book Globalization and Its Discontents he explains how the industrialized economies of the US, Europe, Japan, South Korea and Taiwan developed not with the neoliberal policies promoted in developing countries and the global South by the WTO, IMF and World Bank, but rather with a careful mix of protection, regulation, social support and intervention from national governments in the market.

The People’s Agenda for Alternative Regionalisms

The ''People’s Agenda for Alternative Regionalisms'' is a network of civil society, social movement and community-based organisations from around the world, calling for alternative forms of regional integration. PAAR strives to "promote cross-fertilisation of experiences on regional alternatives among social movements and civil society organisations from Asia, Africa, South America and Europe." Further " aims to contribute to the understanding of alternative regional integration as a key strategy to struggle against neoliberal globalisation and to broaden the base among key social actors for political debate and action around regional integration" and is thus committed to expanding and deepening global democracy. PAAR aims to "build trans-regional processes to develop the concept of “people’s integration”, articulate the development of new analyses and insights on key regional issues, expose the problems of neoliberal regional integration and the limits of the export-led integration model, share and develop joint tactics and strategies for critical engagement with regional integration processes as well as the development of people's alternatives." It draws on and extends the work of such, Southern African People's Solidarity Network- SAPSN (Southern Africa). The PAAR initiative aims to develop these networks and support their efforts to reclaim democracy in the regions, recreate processes of regional integration and advance people-centred regional alternatives. In the video Global Crises, Regional Solutions the network argues that regional integration and cooperation is essential for tackling the many dimensions of the current global crises and that no country can face these crises alone. The video also calls for countries to break their dependency on the global markets, as well as the dominant development model that has failed to address increasing global hunger, poverty and environmental destruction, resulting instead in greater inequality and social unrest. Regional integration, the video argues, should be much more than macro-economic cooperation between states and corporations; it should protect shared ecological resources and should promote human development - health, wellbeing and democracy - as the base of economic development.

References

Bibliography

* Bösl, Anton, Breytenbach, Willie, Hartzenberg, Trudi, McCarthy, Colin, Schade, Klaus (Eds), ''Monitoring Regional Integration in Southern Africa'', Yearbook Vol 8 (2008), Stellenbosch 2009. * Claar, Simone and Noelke Andreas (2010)
Deep Integration
In: D+C, 2010/03, 114–117. * Duina, Francesco (2007). ''The Social Construction of Free Trade: The EU, NAFTA, and Mercosur''. Princeton: Princeton University Press. * Haas, Ernst B. (1964). ''Beyond the Nation State: Functionalism and International Organization''. Stanford: Stanford University Press. * Lindberg, Leon N., and Stuart A. Scheingold (eds.) (1971). ''Regional Integration: Theory and Research''. Cambridge: Harvard University Press. * Michael, Arndt (2013). ''India's Foreign Policy and Regional Multilateralism''. Basingstoke: Palgrave Macmillan. . * Nye, Joseph S. (1971). ''Peace in Parts''. Boston: Little, Brown.

External links

* United Nations University Institute on Comparative Regional Integration Studies (UNU-CRIS)
Towards Unity

Asia Regional Integration Center

Transnational Institute, Video: Global crises, Regional Solutions

People's Agenda for Alternative Regionalisms
{{DEFAULTSORT:Regional Integration Economic integration Regionalism (international relations) Supranational unions