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Notes from Remy Davidson's "Globalization versus Regionalism in the Asia Pacific". Published in Michael K. Connors, Remy Davison, Jorn Dosch (eds.) The New Global Politics of the Asia Pacific, 2012: Routledge, Oxford.
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simon.fiala@seznam.cz
Davidson, R. – Globalization versus Regionalism in the Asia PacificIn Michael K. Connors, Remy Davison, Jorn Dosch (eds.) The New Global Politics of the Asia Pacific, 2012: Routledge, Oxford, UK, pp. 176-203.
Rémy Davison Ph.D. at the University of Melbourne Chair in Politics & Economics in the Department of Politics & International Relations at Monash
University; Associate Director of the Monash European and EU Centre. a Global Conflict Expert for the United Nations
Notes: One globalization or many?
o Globalization and regionalism are interdependent and mutually reinforcing each othero Internationalization globalization
International transactions: take place between nations (IR, IT, International economics)
Transnational transactions: take place across nations Takes place on the sub-national level (TNCs, NGOs, …)
Global transactions: actors engage in transactions national borders notwithstanding. The world is being conceived in planetary proportions
o Globalization Difficult to define Various versions: Globalization of trade, finance, production, interpersonal
networks, technology, communication, transport, culture and language … Global – must bridge multi-continental distances Globalization equal to Westernization, liberalization, Americanization,
universalization? Erosion of state sovereignty – a borderless world
States resort to a ‘strategic retreat’ to regionalism to reclaim control over global occurrences
o Perspectives on globalization in IR Realist, Liberal, Neo-Marxist
o Realist perspective on globalization Challenge
Does globalization really go as far as the popular consciousness has it? Can the breakdown of the traditional national orders be described as
globalization? Erosion of state power: exaggerated!
Globalization doesn’t go as far as liberals imagine Most international transactions still rely on the state. The global governance
regime is also being steered by some powerful states Americanization rather than globalization
Americanization of cultures and economies
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US hegemony (hyper-power)o the hegemonic stability theory: the hegemon is responsible for
maintaining the global commons, providing of public goods; export of the ideological and economic system
o Liberal perspective on globalization The dominant neo-liberal paradigm Political and economic liberalism, democratization, raising of living standards Interdependence
Sensitivity interdependence: the degree to which states are sensitive to abrupt changes in the international economic environment
Vulnerability interdependence: states lack policy tools to regulate exogenous shocks
Economic globalization (compared to economic interdependence): states unlikely to assert control over capital flows
o Influences how the world order might be governed: traditionally dominated by the US, Japan and the EU, but nowadays shift to G20
Homogenizing effect of globalization a levelled playing field BRICs tend to view globalization as an extension of the American sphere of
influenceo Attempts to resist the neoliberal free-market ideologyo But forced to make significant concessions (e.g. membership in the
IMF and WTO)o Neo-Marxist perspective on globalization
Theories of dependency rearticulated to accommodate globalization in the aftermath of the 1997 AFC
Wallerstein’s world-systems theory There is a single world-system, single economy Core, semi-periphery, periphery
Uneven distribution of the benefits/costs of globalization High/low added value industries unevenly spread across the globe
The emergence of the transnational capitalist class dominating the borderless worldo Critical perspectives on globalization
Absolutely uneven rather than diffuse The new global economy differs little from the previous model (colonial) Internationalization of production doesn’t suggest autonomy of global
market forces Impacts restricted largely to the north, only some aspects perpetrating East
Asia and South Americao Central Asia and Africa totally left behind
Financial sector dominated by the US, Europe and Japano F500 companies pose a good indicator of distribution of the global
wealth Internationalization of the communication and capital exists alongside, but does not
displace the state
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Homogenization? Equalization? Universalization? Global integration? Hardly. Widening disparities between the global South and the North
Costs and negative externalities experienced mainly by the Southo The diffuse impact of globalization
Globalization: a centripetal force driving states into a web of financial and economic interconnectedness
Industrialized wealthy countries have perhaps more opportunities to opt out, but are not immune; costs of non-participation rise
o Yet the loss of autonomy applies mostly to weak states E.g. China drawn into the global trading regime
Consequences of globalization vary along the lines of the levels of development Measuring globalization: mission impossible
Level of openness of markets used to measure the impact on living standards
The WB: does global poverty actually decrease or increase? The discussion is not about impacts of globalization overall. It must be focused on
specific impacts in varying contexts E.g. the growth of China vs. the AFC and the underdevelopment of
Southeast Asian countries Developed countries set standards for peripheries that those must meet in
order to be included in the world financial and trading regimes. Often accepted even though they have destructive impact on the local economies and societies
States remain crucial actors of globalization, but at the same time some countries have to abandon national sovereignty in order to be able to function within the system
Erosion of state sovereigntyo Massive flow of capitalo Pressures to liberalize marketso Global civil society and TNAso Regionalism
Regionalism in the Asia Pacifico Definition of region – Nye: regions consist of a limited number of states linked by a
geographical relationship and by a degree of mutual interdependence and can be differentiated according to the level and scope of exchange, formal organization and economic interdependence 184
o Southeast Asia: historically weak regional interconnectedness, scarcely going beyond external economic ties. Recently a remarkable shift to regionalism
o The growth of regionalism A response to globalization
Economic insecurity Exogenous shocks, AFC Intense competition in the world markets
Security dimension to regionalism – long developed (NATO, SEATO, ASEAN)
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Economic dimension to regionalism – since the 1980s Increasing realization that individual states cannot deal with the demands of
inflation, debt, current account deficit and investment; incapable to react to shocks and crises
In the world:o Europe: 1986 Single European Marketo America: 1994 NAFTAo Closed regionalism
Lack of coherence and cooperation in economic regionalism in E. Asiao But realization of the need of integration
o East Asian Regionalism The situation is ripe Economic growth: by 1995 East Asia accounted for 31% of the world’s output (EU
30%, NAFTA 24%) Groupings:
First-tier NICs: South Korea, Taiwan, Hong Kong, Singapore Second-tier NICs: Thailand, Indonesia, the Philippines, Malaysia The socialist states: China, Vietnam, NK Japan
Developments: The rise of China (World’s no. 2 economy by 2010) India’s emergence
o The old and new regionalism The old regionalism: 1950s - 1960s
Minimalist customs union model Formal agreements, institution building
The new regionalism: 1980s Market-led (the politics follows markets) Complex economic interdependence Placing institutional and legal frameworks onto an already established
market structureso Open and closed regionalism
Open regionalism E.g. APEC = External liberalization by trade blocs Reduction of barriers to trade to members and non-members alike
o But why to pay the transaction costs? Free riders Concept of reciprocity There are benefits unavailable to the outsiders
Usually a custom union or a free trade area Closed regionalism
Preferential trade only within a block; third countries face tariffs and quantitative restrictions
EU, NAFTA, AFTA
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Rationale: to protect regional industries until they become competitive while granting companies a larger market without having to pay full costs of competing globally
Approximates the debate between laissez-faire and developmental capitalismo Expansionist regionalism
The EU expansion SAARC SAFTA APEC Concept: Free Trade Area of the Americas (FTAA) - defeated
Instead: CAFTA – Dominican r., Costa Ricao The threat of ‘blocism’
Analysts in the 1980s and 1990s: the world would break into three blocks: NAFTA, EU, East Asian ‘yen block’
Eased security environment led to a more open world order Regional trade, financial and dialogue forums
o The Asian Development Bank (ADB, 1966) 31 61 members A smaller version of the WB Dependent on member states contributions, makes revenue on international bonds
markets Dominated by Japan – important vehicle of Japanese economic strategies Proposals for:
Asian Monetary Fund (AMF) Northeast Asian Development Bank (NEADB)
o ASEAN (1967) The main driver of the regional cooperation in the Southeast Asian region
o Asia Pacific Economic Cooperation (APEC, 1989) Links several free trade areas together: AFTA, NAFTA, CERTA (Australia + NZ) + Some
countries in Latin America and the former Soviet bloc Open regionalism Non-discriminatory trade and investment policies with accordance with the WTO
MFN principle A huge vision, but failed due to the US aggressive foreign policy, Northeast Asian
countries unwillingness to liberalize agriculture and internal problems (missing commitment to reciprocity)
After 9/11 turned into a security forum by the USo The East Asian Economic Caucus (EAEC) proposal
Proposed in the 1990 by a Malaysian PM Including China and Taiwan, excluding Australia and NZ Closed regionalism Translated partially into ASEAN+3
o AFTA (1992) and AANZFTA Open regionalism with exceptions AFTA targets postponed to the year 2020 due to the ‘creeping protectionism’
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Maintained loose rules: the withdrawal of gov. support of some public enterprises, regional investment cooperation, reducing the influence of ‘crony capitalism’
Probably hasn’t boosted inward investment AANZFTA – extension to Australia and NZ – common market envisioned by 2015
o ASEAN+3 (APT, 1997) ASEAN, China, ROK, Japan Soft regionalism – dialogue, rather than hard institution building China maintaining a considerable leverage, Japan thwarting the process (balancing
against China) ASEAN effective in brokering conflicts arising from great power rivalry in the region Failing in ameliorating the difficult strategic milieu of the East Asian region
Envisioned as an East Asian dialogue forum, unwittingly gave China an entrée into geopolitics of Southeast Asia
Instead of contributing to establishment of common East Asian identity it serves as a vehicle of state interests
o The Asian Monetary Fund (AMF) proposal Proposed in 1997 in APT, supported by Japan Initial capitalization of USD 17bn A result of ASEAN members dissatisfaction with IMF’s SAPs Vision:
A system of central banks controlling speculation banking activities, stabilizing East Asian financial markets
offering loans with less conditionality than the IMF’s SAPs being subordinate to the IMF (IMF remains the lender of last resort)
Blocked by the US, failed because of APT member’s deteriorated relations Some pieces implemented on bilateral basis
ASEAN Swap Arrangements: a currency stabilization programme IMF reformed in response to hints of states attempting to leave it behind Reserves of CMI enhanced, CMI multilateralized CMIM
Asian countries are wary of the IMF-US treasury nexus and are seeking to undermine Washington’s dominance
o The East Asian Summit (EAS) Proposed by Australia in 2008 as a pan-Asian Pacific bloc with stronger judicial and
economic institutions than available within ASEAN or APEC – largely failed Disagreement between Japan and Australia on inclusion of the US The US and Russia invited in an apparent attempt to balance China in the region –
looks somewhat unpromising Bilateralism: A challenge to regionalism
o In 2001 in Doha the formerly predominant G3 faced with stern opposition by emerging economic giants mobilizing G22
Collapse of the negotiation in Cancun 2003: G3 and G22 deadlocked on market access, agriculture and subsidy issues
Attempts to revive Doha rounds throughout the decade failed Proliferation of PTAs in the situation of the blocked multilateral process
o Advantages and disadvantages of bilateral PTAs with relation to both RTAs and MTNs
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Advantages: Easy determination of areas intended for liberalization Problematic issues may be left out Entry costs are lower
A major disadvantage: power asymmetry e.g. the disadvantageous FTA between the US and Australia – Australia
forced to accept range of provisions while the US took the liberty to unilaterally exclude articles from the agreement; may cost Australia up to AUD50bn and 200 000 jobs, aggravated the trade deficit
o The WTO multilateral trading system’s popularity is decreasing, countries increasingly turn to bilateral trade initiatives
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