Regional Integration and the Rise of New Economic Blocs

The EEC/EU as Inspiration

• The success of European integration has inspired politicians and intellectuals outside Europe due to its ability to bring both political stability and economic growth.
• Decolonization and superpower rivalry in the Cold War created instability, making regional integration appealing for resolving territorial disputes and reducing reliance on superpowers.

Integration in Asia

• ASEAN Formation (1967):

  • The idea to benefit South-East Asia through economic integration was not new; the British had pushed for a multinational approach to post-war reconstruction as early as 1945.
  • The Colombo Plan in 1950, involving the British Commonwealth and the United States, offered economic aid but did little to encourage cooperation among newly independent states.
  • Cold War divisions hindered integration, with countries like Indonesia and Burma advocating neutralism, while the Philippines and Thailand aligned with the American-dominated SEATO.

• Early Integration Attempts:

  • The first indigenous step was the formation of the Association of South-East Asia (ASA) in July 1963 by Malaya, the Philippines, and Thailand.
  • Further progress was frustrated by controversy over the creation of Malaysia, opposed by the Philippines and Indonesia.

• Catalysts for Change (1965-66):

  • The United States, amid the escalating war in Vietnam, aimed to stabilize the region and isolate communism by promoting economic development and Japanese capital investment.
  • The removal of Indonesia's President Sukarno, replaced by General Suharto, led to Indonesia becoming an anti-communist state willing to accept Malaysia and play a key regional role.

• ASEAN's Evolution:

  • In August 1967, ASA transformed into ASEAN, comprising Malaysia, Singapore, Thailand, Indonesia, and the Philippines.
  • Initially focused on economic, social, and cultural matters, ASEAN expanded into the political field due to American de-escalation in South Vietnam.
  • In November 1971, ASEAN declared South-East Asia as 'a zone of peace, freedom and neutrality'.
  • The Vietnamese invasion of Cambodia in 1978-79 further cemented ASEAN's cohesion.
  • ASEAN's ability to represent the region and encourage Western capital investment led to international support; the U.S. supported its political aims, while Japan became a major trading partner.

• Limitations and Challenges:

  • ASEAN lacked a solid institutional base and commitment to greater integration, differing from the EEC.
  • The ASEAN Free Trade Area was launched in 1994, but it did not regulate agricultural production, allow free movement of labor, or introduce a parliament.
  • The expansion of membership to include countries such as Brunei, Vietnam, Laos and Burma created difficulties in living up to the cause of democracy.
  • ASEAN faced key challenges in the 21st century, including security responses to the threat from Jemaah Islamiya and Burma's lack of progress toward democracy.

• Broader Regional Forums:

  • ASEAN has served as a foundation for developing new international forums.
  • The ASEAN Regional Forum (ARF), established in 1993, aimed to reduce international tension by bringing together major powers with interests in the region.
  • Biennial conferences between the EU and ASEAN were established from 1996.
  • The Asia-Pacific Economic Co-operation (APEC) was founded in 1989 to promote trade liberalization and provide a forum for consultation.

• Asian Community Concept:

  • In December 2005, a summit in Kuala Lumpur explored the formation of an Asian Community to overcome past hostilities, similar to the EU.
  • Progress was hindered by diverse political ideologies, strategic rivalries, and economic disparities.

Integration in the Americas

• Movement Towards Free Trade:

  • In the 1990s, the Western Hemisphere saw a movement towards free trade and regional integration as solutions for Latin America's economic issues.

• North American Free Trade Agreement (NAFTA):

  • Signed in October 1992, NAFTA created a trading bloc between the United States, Canada, and Mexico, eliminating trade barriers over 15 years.
  • Mexico experienced substantial impact on opening up to American (and Canadian) investment, but also faced the spectre of companies relocating south for cheaper labor.
  • American-Mexican trade doubled between 1993 and 1997.
  • NAFTA facilitated economic reforms in Mexico under President Carlos Salinas but was met with opposition from the Zapatista movement and a currency crisis.
  • By the end of the century, Mexico, Canada, and the United States shared in the economic boom, though poverty persisted especially in Mexico where one-third of the population lived below the poverty line.

• WHFTA and Expansion of NAFTA:

  • There were discussions about extending NAFTA to incorporate all of the Western Hemisphere (WHFTA), but this did not materialize.
  • Latin American countries, especially Brazil, feared WHFTA might endanger their trade diversification and increase political dependency on the North.
  • NAFTA lacked provisions for the free movement of people and a political superstructure.
  • Disagreements arose over membership criteria, particularly regarding political systems.

• Limited Progress:

  • Talks about WHFTA (or FTAA) were deadlocked due to economic crises in Latin America.
  • Concrete results were limited to smaller-scale regional free trade zones such as MERCOSUR.

Conclusion

• The EU represents an island of stability, with member countries cooperating and forming a community that accounts for a significant portion of global exports, imports, and GDP.
• Expansion to include parts of the former Yugoslavia, Iceland, and Turkey may occur.
• The EU serves as an inspiration for regional unity outside Europe, though imitators have faced limitations.
• The EU benefited from overcoming war trauma, the threat of the Soviet Union, commitment to liberal democracy and the rule of law, and a common culture.