Wednesday, October 26, 2011

Can we reconcile regionalism with multilateralism?

With the end of my Comparative Regionalism unit in sight it is time to consider the future of regionalism and how compatible is it with pervious projects such as multilateralism.

As Griffith and O’Callaghan point out, ‘some observers worry that the multilateral system may be fracturing into discriminatory regional blocs. Others are hopeful that regional agreements will instead become building-blocs for further trade liberalization’ (2003. P. 275).  In my opinion, regionalism can be reconciled with multilateralism and that because of the complexity of the world trading system (in that there are vast differences in the development of national economies) the world has yet to reached a point of complete non-discriminatory trade as well as reciprocity and therefore regional trade agreements are good strategy to work towards trade liberalisation.

I would like to argue that multilateralism may be the ultimate aim and destination, the international economic community is still yet to reach this target. In this light, regional trade agreements can be a stepping stone towards the goal of multilateralism  

The reason for this is that the Developing Countries find it difficult to reconcile the trade liberalization strategies and their need to develop and establish their economies. As Brigid Gavin argues, Developing countries are increasingly concerned about how to achieve coherence between development and multilateralism…..….But their regionalism is part of a multilevel strategy which needs to be synchronized with their national development plans as well as their efforts to achieve development friendly trade rules in the World Trade Organisation’ (2007.p.59). On the one hand national governments want to abide by World Trade Organisation rules to decrease trade barriers and to adhere to labour, intellectual property and environmental rules but on the other hand, they are aware that they need to grow and strengthen their own national industries.

Gavin continues to argue that ‘Developing countries are increasingly turning to regionalism as a strategy for development.’ (2007. P.57). I presume that, when you are a developing or newly industrial nation, it is easier to trade with the countries nearest to you than with those who are further away as the transport costs are less and cultural and business differences would be less marked.  

Also, another reason why developing countries find regionalism so appealing is that Regional Trade Agreements are a good first step towards multilateralism as well as it is easier to develop trade links as a regional bloc (the saying ‘safety in numbers’ rings true here) with other nations and regions.  

In conclusion, regionalism can be reconciled with multilateralism as they both aim to reduce barriers to trade and increase trade liberalisation, it is just that regionalism is a good tool that could used to achieve this.   

List of References

Brigid Gavin. 2007. “Reconciling Regionalism and Multilateralism: Towards Multilevel Trade Governance,” in Philippe De Lombaerde (ed). Multilateralism, Regionalism and Bilateralism in Trade and Investment. 2006 World Report on Regional Integration Springer, 59-72.

Griffith, M and O’Callaghan, T. International Relations: Key Concepts (Routledge: New York, 2003)

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