The Third World answer to globalization: Continued and new regionalism

Figure 42.1 Intra-regional exports and world trade share 1975-94 699 Figure 42.2 Regional economic cooperation in Latin America 700 Figure 42.3 Central American and Caribbean economic cooperation 705 Figure 42.4 Regional economic cooperation in South and East Asia 707 Figure 42.5 Institutionalization of the ASEAN Regional Forum set up in 1994 709 Figure 42.6 Regional economic cooperation in Africa 713 Figure 42.7 Regional cooperation in the Arab world and West Asia 720

Reaction to an external threat

In the 1980s and 1990s three factors encouraged regional economic cooperation between states outside Europe and North America: the external threat presented by globalization, the end of bipolarity and the pressure exerted by the global free trade regime. The first factor was the external threat to states in the form of the continuing internationalization and globalization of the economy, discernible in the consequences of the coercive economic policies of Reagonomics as pursued by US President Ronald Reagan through the G7, the structural adjustment policy of the IMF and IBRD and the far-reaching free trade policies introduced by the GATT/WTO. To be able to resist this external pressure more effectively, states formed ‘alliances’ or economic organizations of states in their region. Some of these were new, others were adaptations of existing organizations. In the 1980s 17 regional economic organizations in total were established, or revived, outside Europe and in the

1990s the number was 26 (see Figure 30.1). The general tendency in this period was to move towards a limited form of trade liberalization ‘often on the basis of overlapping bilateral agreements rather than multilateral regional obligations’. In Latin America the Andean Group (see §30.2) adjusted to the new global economic relations in this way. Another approach was ‘specific cooperation on individual programmes among several countries’. This was the course adopted by MERCOSUR in Latin America and the Southern African Development Community (SADC) in Africa (Axline 1994, 4).