New R & politica Economy

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1 
Pavel Hnát 
University of Economics, Faculty of International Relations, Prague, Czech Republic1 
 
 
 
POLITICAL ECONOMY OF THE NEW REGIONALISM: 
GLOBAL AND EUROPEAN PERSPECTIVE 
 
 
 
Key words: Regionalism, New Regionalism, European Union, Political Economy 
 
ABSTRACT 
 
New Regionalism represents the current wave of regional integration, which has been 
characterised by substantial qualitative, quantitative and formal changes in regional 
integration. Modern analysis of regionalism (namely when based upon the Political 
Economy Approach) suggests that regional integration de facto contributes to those 
economic forces that build globalisation and increase global competition. As a mater 
of this fact, the New Regionalism currently changes its character markedly. Today, 
especially due to the influence of globalisation, regionalism is seen as a tool of open 
economic relations’ liberalisation that should ensure both national and regional 
competitive position in the globalised world. Moreover, both theoretical and empirical 
analysis of regionalism (i.e. namely comparative analysis of its different cases) leads to 
the same conclusions. The question however remains, whether today’s European Union 
corresponds to the most recent trends in regionalism and thus if it is a strong enough 
tool, which can help European economies to utilize globalisation’s opportunities and to 
face its threats. Political Economy analysis of the New Regionalism shows important 
aspects of its reform, and is thus the most important perspective of this paper. 
 
 
 
1. INTRODUCTION: OLD AND NEW REGIONALISM 
 
Regional Economic Integration has been an important aspect of International Relations 
since the first half of the 20th century and became an important and integral academic 
and theoretical branch, usually labelled as Regionalism. Especially late 1980’s saw 
a start of an intense debate on the origins, dynamics, institutionalization and effects of 
regional integration (Söderbaum, 2005, p. 221). Today, however, the study of 
Regionalism faces eminent changes in the scale and scope of its study. These changes 
are caused by the changes in Regionalism itself, meaning that the process of regional 
economic integration became truly global during the last decade. Usually there is no 
doubt, today, that the current wave of regionalism – the New Regionalism – 
significantly differs from its previous development and there is even an agreement 
about the causes of its new development. Different theoretical approaches, however, 
 
1
 This paper has been worked out within the framework of the Research Plan of the Faculty of International 
Relations, University of Economics, Prague, No. MSM6138439909. 
 
2 
offer different explanations and understanding of its substance, which brings us, 
together with Söderbaum and Shaw (2003, p. 8), to the richness of the theories of New 
Regionalism. To understand them all it is however crucial to define the New 
Regionalism more precisely and namely to conceptualize the differences that separate 
new form old, as far as the waves of regionalism are concerned. 
 
New Regionalism is generally defined as the current wave of regional integration 
development dated since 1990’s. It is characterised by a rapid development of 
international trade and investment, by the revival of existing regional integrations and 
by a massive formation of the new ones. However there is some variety in defining 
regionalism’s waves (some authors define only two waves of regionalism referring to 
the development before late 1980’s as to the old regionalism and to the latter as to new 
regionalism; other see three waves by differentiating the development before and after 
the Second World War) it is usually generally agreed that in these points the current 
wave differs substantially from the previous one or ones. Even though the New 
Regionalism can be defined, e.g. according to Cihelková (2004, p. 808) it represents 
a contractual exchange of market access rights among isolated group of partners on the 
basis of Regional Trade Agreements (RTAs), its most important aspects are revealed 
from its comparison with previous waves. Most apparently, New Regionalism has an 
unprecedented scale and dynamics today (i.e. quantitative changes). By a more precise 
analysis, it can be assumed that its motives, tools and substance has changed as well 
(qualitative changes), which has additionally led to its new forms and types of RTAs 
(formal changes). 
 
1.1. Quantitative changes of Regionalism 
 
As far as the quantitative changes of regionalism are concerned, increase in the number 
of RTAs as well as in the number of the countries involved in them must be treated 
separately as they both result in different issues. As a matter of a rapid increase of the 
number of RTAs, regionalism became a global phenomenon which influences the 
development of World Economy as well as its own further development markedly. 
Meanwhile in late 1980’s, the number of RTAs notified to the WTO according to its 
specific provisions amounted to less than 30 (see Table 1), there are almost 200 RTAs 
in force today; however, these figures must be treated in a context of the GATT/WTO 
notification provisions, they represent the quantitative trends sufficiently. Moreover, 
according to recent studies (Crawford, Fiorentino, 2005, pp. 2–3), future tendency 
towards increase in the number of RTAs is firm and it is estimated, that there will be 
about 300 RTAs operational by 2008. Such a rapid increase induce further changes in 
the scope and scale of today’s regionalism which will be examined among the 
qualitative and formal aspects; at this place it is, however, necessary to point out that 
increase in number of RTAs increases the number of ways how regionalism is 
understood and conducted, it leads to a mutual proliferation of RTAs and to further 
effects on multilateralism. All in all, due to the quantitative changes of regionalism 
matters of transparency and mutual consistency of regionalism must be especially 
addressed today. 
 
Moreover, the increase in the number of countries involved results in other important 
consequences. However the number of countries itself matters, even more important is 
 
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the fact that countries and superpowers, which were involved only partially or were not 
involved in any RTA, started to be active in regionalism in its current wave. This 
applies especially to the case of the USA, Japan or China (their cases will be examined 
later), the approaches towards regionalism of which changed it quality and form 
markedly. Similarly as in previous case, these qualitative changes induce those in 
quality and form of regionalism today. 
 
Table 1 Number of RTAs notified to the WTO, as of 1 March 2007 
 
GATT/WTO 
Provision 
Entered into force 
before 1990 
Entered into force 
before 2000 Currently in force 
GATT Art. XXIV 16 55 129 
GATS Art. V 2 10 44 
Enabling Clause 9 16 21 
Total 27 81 194 
 
Source: Notifications to the GATT/WTO, http://www.wto.org/english/tratop_e/region_e/summary_e.xls. 
 
1.2. Qualitative changes of Regionalism 
 
Regarding the qualitative changes in regionalism, on the basis of a comparative 
approach, it is usually concluded that today’s regionalism is more broad and complex 
in its approach to economic liberalization than its previous waves: the scale of RTAs 
has broadened into the most dynamic areas of international economic relations (i.a. free 
movement of services, capital and workers, competition policy, intellectual property 
rights, surveillance mechanism) and these issues are generally implemented in most 
cases of regionalism today. Simultaneously, New Regionalism seems to aim at 
consistency with the multilateral provisions(which can even lead to the concept of 
Open Regionalism). All in all, when compared to the old regionalism, RTAs are more 
flexible and mutually complementary today. As a matter of this fact, straightforward 
and clear rules of economic liberalisation can be combined even there, where various 
levels of economic liberalization overlap each other, and thus contribute to a global 
scale and relative openness of regionalism as well. 
 
Right here, the comparison with old regionalism usually brings major outcomes. 
Meanwhile old regionalism was generally understood rather as a kind of protection 
against forces of globalisation and competition, i.e. it represented efforts on national 
protectionism at a regional level and has usually been associated with the protectionist 
provisions of the so-called embedded liberalism (Spindler, 2002, p. 3); the New 
Regionalism is seen as a firm component of economic liberalisation and a way of 
utilization the challenges of globalization and global competition. In fact, as Hettne 
stated (2003, p. 23), it is generally accepted that New Regionalism must be open as 
there is no other alternative, closure no longer being an option. On the whole, 
especially due to the influence of globalization (other factors will be examined further), 
regionalism is seen as a tool of open economic relations’ liberalisation that should 
ensure both national and regional competitive position in the globalized world; efforts 
on sustaining or increasing regional competitive position become crucial motive of the 
 
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regionalism, today. There are, however, also other motives from which especially the 
political ones must be especially emphasized leading to a fact that New Regionalism is 
strongly political as well. 
 
1.3. Formal changes of Regionalism 
 
In addition to the increase in number of RTAs and in diversity of approaches toward 
them; and to the principal changes in the current state of regional integration, its 
motives and goals; the formal changes of regionalism can be conceptualized further. 
They represent the increase in diversity of regional integration forms and types, which 
result in new formal variations of regional economic integration; however some of 
these forms can be traced even sooner their upsurge is connected to New Regionalism. 
 
As to the number of countries involved in an RTA, New Regionalism has seen a spread 
of bilateralism (RTAs with only two parties, the existence of which is originally 
connected namely with the activities of the USA worldwide and of Japan in the Asia-
Pacific region), or interregionalism (RTAs negotiated between other regional 
integrations e.g. EC–MERCOSUR, EC–GCC, AFTA–CER and others). All these 
forms and their global spread have further implications for the transparency and 
consistency matters (Hnát, Stuchlíková, Bič, 2006, p. 4–8). As to geographical division 
of regionalism, transregionalism (RTAs transcending the borders of world’s macro 
regions, e.g. EC–Mexico, USA–Singapore or APEC) became a frequent tool of 
regionalism strategies of the most active countries and RTAs today. As far as the level 
of economic development of involved countries is concerned, there is a strong tendency 
towards integration between developed and developing countries (e.g. NAFTA, EC–
Mexico, EC–ACP), which induces other issues connected namely to regionalism and 
development and future of multilateral liberalisation. Compared to the old regionalism 
that was often limited to the neighbouring countries at the similar level of economic 
development, New Regionalism became its global scale so quickly namely by the 
combination of transregional, bilateral and biregional (those RTAs in which other 
RTAs are involved e.g. EC–Mexico, EFTA–Chile) and/or North–South RTAs. 
 
Table 2 Number of selected types of RTAs notified to the WTO 
 
Type of RTA In force before 1990 
In force before 
2000 
Currently in 
force 
Bilateral RTAs 3 34 107 
Transregional RTAs 5 8 46 
Biregional RTAs 5 15 41 
North–South RTAs 6 17 66 
Total number of RTAs 27 81 194 
 
Source: Notifications to the GATT/WTO, http://www.wto.org/english/tratop_e/region_e/summary_e.xls and 
author’s own classifications; as of 15 March 2007. 
Note: No interregional RTAs have entered into force so far. Table displays RTAs between RTA and 
a country or a group of countries, these are usually called biregional RTAs. 
 
 
 
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2. GLOBAL POLITICAL ECONOMY OF NEW REGIONALISM 
 
However the changes of regionalism, that conceptualize the difference between old and 
new regionalism, were treated separately and were for better understanding divided 
into three groups, they are all connected to each other and exist simultaneously. They 
are all result of particular causes of New Regionalism, which will be examined in next 
chapter. As the qualitative changes of regionalism are crucial for its understanding, 
they must be stressed especially. Since they are mostly connected to the shift in 
state–market relation and competitiveness in New Regionalism International Political 
Economy has been chosen as a principal point of view, which will be explained at 
several places throughout the chapter. 
 
The above stated changes in regional cooperation have different reasons, which vary 
across the World Economy and manifest in different features of regional cooperation in 
the world. Many patterns are, however, common to all different cases of regionalism. 
This fact is caused by both global nature of New Regionalism and by its main causes 
that are generally valid for the whole World Economy (however different the particular 
features of concrete RTAs may be). These causes are another crucial aspect needed for 
understanding the current wave of regionalism. As was already mentioned above, there 
is usually a broad agreement on the main issues that caused the current changes in 
regionalism; however their explanations and understandings are often different. 
Choosing the “right” school of theoretical insight depends on author affiliation as well 
as broader understanding of the world order. However subjective the theoretical study 
of regionalism might be, there is always an opportunity to prove the theoretical 
conclusions on a wide range of cases of regionalism in the world. Based on a broad 
comparative study of worldwide regionalism, particular theoretical approaches can then 
be preferred as they explain most of the current developments in regionalism. 
 
As a main perspective of this paper, International Political Economy was chosen, based 
on a comparative research of regionalism in the World Economy, its general features 
throughout different cases of its development and with respect to different theoretical 
approaches to International Relation and world order. There are several particular 
reasons for this decision. Firstly, today’s regionalism is (more than ever) 
a comprehensive mixture of economic and political aspects. Even though the substance 
of regionalism was defined as strictly economic (i.e. liberalization of economic 
relations leading to market integration) current decisions on negotiating, concluding or 
implementing the RTAs are influenced by political aspirations and security reasons in 
such scale that cannot be compared with its previous development. Political Economy 
and namely its internationalized branch the International Political Economy (IPE) 
offer such insight in international relations that takes both these aspects (economics and 
politics) into account; moreover, it combines them in that extent that it even transcend 
the dichotomy between them two (Watson, 2005, p. 18). At the same time, the IPE 
however remains well-founded in economic theory, which is crucial for 
a comprehensive analysis of the complex processes of current World Economy. 
Secondly, IPE deals intensively with those state–marketissues that seem (based on its 
empirical analysis) to represent the main shift in New Regionalism. Moreover, IPE’s 
approach addresses the state–market relation within the framework of globalization and 
thus enables to study the global manner of regionalism as well – such filed of IPE is 
 
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even labelled as a Global Political Economy (Phillips, 2005). Based on neoclassical 
economic assumptions, the outcome of such an analysis seems to correspond to 
empirical experiences of international relations in globalized world. And thirdly, IPE 
traditionally contains a good deal of the World Order Approach, which is necessary for 
understanding the complex relations between different levels of current effort on 
market liberalization (principally national, regional and multilateral one). 
 
The causes of New Regionalism are, generally speaking, seen in a compound complex 
of changes and processes started in late 1980’s in the interconnection with sharpening 
of Global Competition and with the end of Bipolarity (Cihelková, Hnát, 2005, pp. 111–
126). For better understanding, the complex is usually divided into three mutually 
interconnected issues: the systemic changes (i.e. political, social and economic changes 
resulting from the end of bipolarity); globalisation and increased global competition; 
and causes at the national level (i.e. searching for the new modes of governance at the 
nation state level). It is just the influence of these three principal changes of World 
Economy to the quantity, quality and form of regionalism that will be examined further 
(by the means of IPE) in order to understand the motivation and causes of modern 
regionalism. 
 
2.1. Systemic Changes of World Economy and New Regionalism 
 
From the perspective of CEE countries, the systemic changes’ influence on regionalism 
is probably most easy to understand, however, its consequences are much broader and 
more than other result in the truly global nature of regionalism. Yet, the truth is that 
immediate impacts in the transforming and transitive countries (including those in 
Central and Eastern Europe) were probably most rapid. In most transforming countries 
(no matter whether in Europe or Asia), regionalism soon became a part of their 
transformation strategy (Cihelková, Hnát, 2006, p. 7): within the system changes2 
regionalism played an important role namely by establishing business and capital links 
with the rest of globalizing World Economy and by providing the means of external 
liberalization and openness. As a part of the institutional changes, regional agreements 
often created essential framework of external relations and cultivated internal 
environment (both in economic and political matters). Among structural changes, 
regionalism set the export orientation of economies and created conditions for 
attracting foreign investments. For these reasons, an upsurge in the number of various 
RTAs in the transforming regions – e.g. Central European Free Trade Agreement 
(CEFTA); numerous bilateral agreements in the CEE region and in Balkans; 
Commonwealth of Independent States (CIS), Eurasian Economic Community (EAEC) 
or numerous bilateral RTAs in the CIS region; Black Sea Economic Cooperation 
(BSEC) and many others – contributed to the quantitative and formal changes in 
regionalism significantly. Moreover, aiming at as broad integration with Global 
Economy as possible, these RTAs introduced a whole range of progressive features of 
New Regionalism, by which they contributed to its qualitative changes as well. 
 
2
 The transformation process can be divided into three main kinds of changes in society and economy, 
which are mutually complementary and no single one can function absolutely properly without the others: 
systemic (i.e. namely privatization and external openness), institutional (i.e. formulation and enforcement 
of legal and institutional frameworks) and structural (i.e. changing the unsatisfactory structure of the 
economy into a modern and competitive one in both domestic and external terms) ones. 
 
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Opening of the transforming region to the global competition, however, created another 
impetus for the increase in number and variety of regionalism, which answered to 
enormous will of the transforming countries to bind ties with Global Economy – 
regionalism became global in its regional coverage as its scale was no longer limited by 
political boarders. As a most eminent example here, the European Agreements between 
the EC and its candidate countries of the CEE region, which resulted in many cases in 
direct EU’s enlargement (which must be understood as an eminent result of New 
Regionalism in Europe and as a step to moderate consolidation of trade and investment 
environment in the region), can serve. There are, however, other cases such as: EC’s 
Partnership and Cooperation Agreements with Russia and other CIS countries; Russia’s 
and China’s efforts on RTAs conclusion (in both cases connected closely to countries 
accession process to the WTO); numerous regional initiatives in Asia Pacific region 
etc. By their efforts on stabilization, cultivation and economic liberalization, these 
“East-West” agreements contributed broadly to an upsurge of North-South RTAs and 
created a new pattern of mutual cooperation, which brought in institutional 
arrangements of regional governance (Van Langenhove,2005, pp. 20–21). 
 
Nevertheless, probably most expressive are the effects that the systemic changes in the 
world as well as the upsurge of new regional initiatives induced in the approaches of 
principal actors of the World Economy that were not involved in regionalism yet that 
much. Here especially the United Sates and Japan (China was already mentioned 
above) must be taken into account as their late entry into the formation of regional 
cooperation had massive global impacts. However, the approach of the United States 
of America towards regionalism started to change gradually during the 1970’s and 
1980’s when the pace of multilateral trade liberalization started not to be enough for 
the demands of US economy (namely as far as services and investment regimes are 
considered), progressive change was brought to it by the systemic changes in the world 
in the late 1980’s. Globalization of former Eastern Block and growth opportunities that 
it brought definitively showed the fact that the competitive position of the US economy 
in the world is not unshakable and forced the US policymakers to accept regionalism as 
a way to strengthen it. Firstly implemented in Canada-US Free Trade Agreement, the 
modern and liberal approach of the United States towards regionalism brought many of 
the progressive features of regionalism that are today seen as a patterns of many RTAs 
worldwide. Definitively, after the success of NAFTA, US regionalism multiplied (see 
Table 3) and began to shape the New Regionalism both qualitatively (progressive 
features of wide liberalization) and formally (US bilateralism and transregionalism, 
North-South RTAs, etc.). Japan started to form its regionalism even later (neglecting 
its membership in APEC, Japan formed its first RTAs in late 1990’s) and by its 
predominant preference of bilateral EPAs it quickly shaped new pattern of Asia-Pacific 
regionalism. However it is even younger, the regionalism of China has a strong drive 
towards market integration both in Asia-Pacific Region and worldwide (strongly 
stimulated by China’s attractiveness for RTAs partners and by its need to be recognized 
as a Market Economy3); for details see Table 3. 
 
3 
 In addition to being a Member of the WTO, China has also started to participate in bilateral and regional 
trade agreements; most, if not all, of the partners with which China has negotiated bilateraltrade 
agreements recognize China as a market economy (WTO: Trade Policy Review, China, April 2006, p. 30); 
this fact has namely further consequences for China’s position in dispute settlement mechanism. 
 
 
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Table 3 RTAs concluded or negotiated by USA, Japan and China 
 
Form USA Japan China 
Multilateral RTAs 
APEC (1989) 
NAFTA (1994) 
CAFTA-DR (2005) 
APEC (1989) APEC (1991) 
APTA (2001) 
Bilateral RTAs 
Israel (1985) 
Jordan (2001) 
Chile (2004) 
Singapore (2004) 
Australia (2005) 
Morocco (2006) 
Bahrain (2006) 
Singapore (2002) 
 Mexico (2005) 
Malaysia (2006) 
 Thailand (signed) 
Philippines (signed) 
Chile (signed) 
ASEAN (2005) 
Hong-Kong (2005) 
Macao (2005) 
 Chile (2006) 
Pakistan (2006) 
Negotiations 
under way 
Oman, SACU, 
Panama, Colombia, 
Ecuador, Peru, 
Thailand, UAE, 
Quatar 
Brunei, 
Indonesia, Korea, 
ASEAN, GCC 
Australia, 
New Zealand 
Consultations 
on RTAs prospects 
ASEAN Initiative, 
FTAA, MEFTA 
Australia, India, 
Switzerland, 
Vietnam, 
ASEAN+3 
SACU, GCC, 
Island, India, 
ASEAN+3 
 
Source: WTO Trade Policy Review: USA (June 2006), Japan (January 2007), China (April 2006), 
http://www.wto.org/; United States Trade Representative, http://www.ustr.gov/; author’s own 
classifications; actualized as to March 2007. 
 
2.2. Globalization and New Regionalism 
 
To the IPE point of view, that definition of globalisation is the closest, which 
understands globalisation almost exclusively as a growth of economic activity across 
national and regional borders, which reflects itself in increased movement of goods, 
services, property rights within trade flows and in movement of people within 
migration flows. (Nesadurai, 2002, pp. 1–12). Globalization as such is then a process 
that occurs as a result of a logic of market integration, and which conceives of 
governance of globalization as oriented essentially toward the maximization of market 
efficiency in the interests of growth and development (Phillips, 2005, pp. 23–24). 
Globalisation, defined by this way, is deeply embedded in the economic bases of 
human society and especially in the technological progress. It is thus deeply connected 
with current World Economy and its forces are, even if their negatives are considered, 
seen as effects that activate and speed up economic activity. 
 
As far as globalization’s influence on New Regionalism is concerned, an important 
aspect of globalisation is especially its even stronger presence to all economic 
processes in the World Economy in its current wave since 1980’s. It can be namely 
seen in the sharpening of global competition, which was enabled especially by 
technological progress and by the entrance of transnational economic actors into the 
World Economy (Spindler, 2002, p. 13). Through the increased competition and 
 
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influence of transnational entities on national and regional decision makers, the 
globalisation markedly influences regionalism and the way it is done. 
 
Globalisation especially increases demands on national economies by strengthening 
global competition, by increasing the mobility of economic and human factors, and by 
a pressure on increasing own competitiveness in global environment. Thus, it 
influences regionalism quantitatively; as openness is seen as the only answer to the 
challenges of global competition both in developed and developing countries, 
regionalism spread out as a tool of countries’ integration into the regional and global 
economy. Additionally, it changes regionalism formally by an upsurge of new forms of 
regionalism that correspond better to these goals (e.g. more flexible bilateral RTAs, 
North-South RTAs, etc.). More importantly, however, globalization changes the quality 
of regional integration markedly. Since globalisation decreases the influence of states 
on economic environment, utilization of region-wide economic potentials and 
maximization of immediate gains form mutual trade4 is seen as the way to increase own 
competitive positions in globalised world. 
 
The new logic of regionalism is thus more often seen in the efforts on increasing 
national and regional competitiveness in globalized World Economy. With respect to 
the fact that competitiveness is an attribute of individual firms or people at international 
markets or job market, respectively, in this context it should be understood as the 
ability of state and/or regional integration to create such environment, which enables 
their firms and people to succeed in international competition. For this reason, 
regionalism changes qualitatively. As some aspects of this change were already 
mentioned above, it can be only emphasized that with respect to IPE’s views on 
globalization and its challenges, RTAs’ flexibility, comprehensiveness and broader 
scale of economic liberalization (which increases the economies of scale and support 
investment, innovations and technological progress) are the main effects, by which 
regional integration can promote competitiveness. 
 
However important the competitiveness as a principal motive of New Regionalism is, it 
does not explain the qualitative shift in regionalism completely. IPE’s emphasis on 
state–market relations is thus very important here as it can clarify the rest: the 
qualitative shift in regionalism results markedly form the fact that globalisation 
changes the balance between state (regulation) and market (free competition); 
primarily at the state level, however, since this level is traditionally resistant towards 
decreasing of its influence (see the debate on principal IPE’s contradictions e.g. in 
Phillips, 2005, p. 24 and pp. 92–99), it can be more often seen in RTA’s instruments, 
today, as they deal directly and almost exclusively with the openness and 
competitiveness matters. However, the relation between free market forces and state 
efforts to regulate them are influenced by the globalization towards more flexible 
economic environment, state still has its important functions and remains a foundation 
of International Relations. Yet, there is a certain globalization’s pressure on the shift 
form traditionally understood welfare state to the competition state (Hay, Watson, 
 
4
 However there is quite broad understanding of a fact that maximization of gains form global trade is 
represented by as broad economic liberalisation as possible, i.e. the global (multilateral) level 
(GATT/WTO) means the first best choice, particular interests and new demands of globalization shift the 
liberalization efforts form global level to the regional one (i.e. to regionalism) in a larger scale than before. 
 
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Wincot, 1999, p. 1). An important aspect of this shift is however a statement that the 
welfare state is not threatened by the globalisation and market forces but by its own, 
too interventionist, arrangements; the welfare state interventions themselves reinforce 
the necessity of marketisation (i.e. shift towards market) and freer competition 
(Spindler, 2002, p. 13). Induced from the national level, these moves transfer to the 
regional level as well, resulting in those qualitative changes of regionalism that aim at 
greater flexibility, comprehensiveness and openness of New Regionalism. Moreover, 
from the institutional-building point of view, regional integration can additionally 
become a force, which is able to overcome the resistance towards deregulation and 
opening at the national level. 
 
2.3. Governance and New Regionalism 
 
The causes at the national level can be originally seen as efforts on seeking new 
reactions to the uncertainty of globalized world and on maintenance of competitive 
positions at least at regional level. From this original motive, the analysis however 
comesto an emphasize on the system of governance as a whole, i.e. at national and 
sub-national level including namely economic entities and civil society in national 
states as well as at global level. Namely by the move toward the issues of global 
governance, analysis of New Regionalism has strong importance for issues of World 
Order. In this respect, the concept of governance, which according to Payne (2005, p. 
55) belongs to IPE’s most widely deployed concepts, connects the regionalism debate 
on state and global level, which is crucial for understanding its global consequences. 
 
Governance itself is generally defined as “the sum of the many ways individuals and 
institutions, public and private, manage their common affairs” (Payne, 2005, p. 60). For 
many, governance became a tool of analyzing and describing society’s changes 
induced by globalization at one hand, and finding the better ways of managing 
globalization’s challenges and risks on the other. Namely in IPE tradition, governance 
is seen as a proliferation of neoclassical economic ideas trough principal involvement 
of private sector in broad decision-making mechanism which together with the 
globalization pressures lead to “reorganization of state” (Payne, 2005, p. 75) and its 
instruments including regionalism (changes of regionalism are at hand). 
 
Moreover, trough the concept of multi-level governance, or Van Langenhove’s (2005, 
p. 21) concept of multi-dimensional regional integration, which implies co-operation 
along a number of different dimensions such as culture, politics, security, economics 
and diplomacy; changes of regionalism must be seriously debated also in other fields of 
human activity, no matter the fact that the original idea of regionalism lies in economy. 
Last but not least, regionalism became its global scale during the 1990’s, which induces 
further debates on its influence on global governance, i.e. another broadly accepted 
dimension of governance connected to the worldwide scale of globalisation. However, 
there has been a long lasting debate on regionalism effect on multilateral trading 
system, the concept of global governance and regionalism’s political motives and tools 
moves the consequences of regionalism towards a wider range of aspects and 
simultaneously explains remaining changes in its character (i.e. shift towards deeper 
and, within International Relations, more political regionalism). 
 
 
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3. CONCLUSIONS: EUROPEAN PERSPECTIVE 
 
European Union (EU), which represents the deepest case of regional integration in the 
world, is often labelled as the most expressive case of the second wave of regionalism, 
i.e. it reflects predominantly the tendencies of previous development of regionalism 
(i.a. gradualist approach to integration according to functionalistic and neo-
functionalistic theories). As a result of its depth and other features, today’s EU is a very 
specific case of regional integration. Since it, however, also is influenced by 
globalisation, systemic changes and by the new modes of governance, it is legitimate to 
analyse it with respect to the New Regionalism concept. However, its comparison with 
other cases of regional integration can be problematic, it can bring valuable conclusions 
especially when it is combined with EU’s comparison with the general patterns of New 
Regionalism emphasized above. As a matter of EU’s complexity, it is however 
efficient to analyse its external and internal aspects separately. 
 
3.1. External aspects 
 
As far as the external aspect of European Regionalism are concerned, namely the area 
of EU’s External Economic Relations must be taken into account as it represents 
a main tool of EU’s ever stronger presence in global regionalism (see Table 4). 
 
Table 4 Typology of the EC's regional agreements 
 
Type of trade regime Countries involved 
Single market 
(European Economic Area) 
Iceland, Liechtenstein, Norway 
Customs union Turkey, Andorra, San Marino 
Free-trade area Chile, Croatia, Faroe Islands, FYROM, Israel, 
Jordan, Lebanon, Malta, Mexico, Morocco, 
Palestinian Authority, South Africa, 
Switzerland, Tunisia 
Partnership and cooperation 
agreements 
Russia and other former Community 
of Independent States countries 
Non-reciprocal: contractual 
preferences (Cotonou and 
Mediterranean Agreements) 
African, Caribbean and Pacific countries, 
Algeria, Egypt, Syria 
 
Non-reciprocal: autonomous 
preferences (GSP; Stabilization 
and Association Agreements) 
Other developing countries and members of the 
Commonwealth of Independent States 
Albania, Bosnia and Herzegovina, and Serbia 
and Montenegro (including Kosovo) 
Purely MFN treatment Australia; Canada; Chinese Taipei; Hong Kong, 
China; Japan; Republic of Korea; New Zealand; 
Singapore; and USA. 
 
Source: WTO: Trade Policy Review. EC 2004. Based on Lamy, P. (2002), Stepping stones or stumbling 
blocks? The EC's approach towards the problem of multilateralism and regionalism in trade policy. 
The World Economy, November 2002, vol. 25, No. 10, pp. 1399-1413(15). Actualised by the author 
and by Prof. Eva Cihelkova. 
 
12 
As a matter of the existence of Common External Trade Policy, the EU negotiates and 
concludes numerous RTAs with its partners (traditionally namely with the less 
developed ones). Moreover, the complex system of EU’s external relations shows 
many of the most recent trends of New Regionalism. As far as formal features are 
concerned, EU’s existence as a partner of RTAs itself; EU’s transregional RTAs; or 
interregional negotiations (e.g. with MERCOSUR or GCC) are evident features of New 
Regionalism. There is however also a marked shift in the qualitative aspects, which can 
be concerned as a move toward more liberal regionalism based on openness to the 
global economy and thus towards greater competitiveness. 
 
It is represented namely the move form non-reciprocal trade preferences (especially for 
the developing countries) towards reciprocal cooperation on the basis of complex 
multilateral or bilateral Economic Partnership Agreements (EPAs). These are typical 
third generation agreements, which combine reciprocal economic liberalisation based 
on a complex free trade area (which is aimed to fully comply with multilateral 
liberalisation (i.e. WTO) provisions) with political, financial and technical cooperation, 
which reflects both economic and political ambitions of the EU. As examples of 
multilateral efforts the following cases can serve: Barcelona Process, which aims at 
building Euro-Mediterranean Free Trade Area with complex coverage by 2010; the 
Cotonou Agreement, which changes the relations with ACP countries; or transregional 
processes such as Summit Rio towards Latin America and Asia Europe Meeting 
(ASEM) towards South-East Asia. Bilateral agreements have been since late 1990’s 
directed namely to the Mediterranean Region as a complement to the multilateral part 
of Barcelona Process (e.g. Algeria, Syria, Morocco or Egypt); after 2000, to Mexico or 
Chile, where they cerate a pattern for further developments in Latin America. 
 
On the other hand, there are still aspects of EU’s external relations that should be 
improved. Firstly, the policy of external openness should be probably expanded to all 
EU’s trade as far as commodities (namely agricultural products) are concerned; thus it 
could better comply with WTO’s demands on RTAs, contribute to the economic 
progress of developing countries and improve its internal flexibility and 
competitiveness (at least in a long term). Secondly, EU’s trade policy is traditionally 
oriented namely to developing countries of selective regions; as a matter of this fact 
EU’s trade regime toward most competitive countries (both in North America and 
South East Asia) does not correspond to the demand of globalisation.All in all, 
external segment of EU’s activities, however, indicates a strong presence of the New 
Regionalism features and promises further improvement. 
 
3.2. Internal aspects 
 
As far as New Regionalism influence on EU’s internal aspects is concerned, namely 
the creation of Internal Market and its reform must be emphasized. According to 
Spindler (2005, pp. 39–42), there is a consensus that with the single market program 
there was not only a revival of European integration but that it has set the course for 
new directions in European integration. These directions correspond the New 
Regionalism features much better than immediate reaction of European Community to 
the crises in 1970’s and 1980’s. As a reaction to the forces of globalisation, institutions 
of the EU and especially the Commission started to support a more liberal and 
 
13 
competitive Internal Market, which should foster Europe’s competitiveness in 
globlaized world. On the other hand, as a result of traditional high level of state 
interventions in Europe, the project of Internal Market is not as open and competition-
based as it could be and there are numerous cases of lack of reform activity both at the 
side of EU’s institutions and (probably more importantly) member states. 
 
Crucial reforms, which would lead towards higher European competitiveness, i.e. most 
importantly labour market reform, reform of social security system and comprehensive 
internal market liberalisation, thus still wait for realization in most European countries. 
As in New Regionalism perspective, their principal actor remains the nation state; the 
main responsibility for the current situation of the European integration process lays on 
its member states and their dominant economic doctrines. Yet also EU’s institutions 
could proceed more active in these matters; at the EU level, the concept of increasing 
European competitiveness is somehow limited to the implementation of the Lisbon 
Strategy. However it contains many important features of the neo-liberal concept of the 
New Regionalism, it is not sufficient for factual reform, which should bring 
progressive elements of better competitive conditions for firms and citizens in Internal 
and member states’ markets. Additionally, here is no doubt that even the realization of 
the Lisbon Strategy is stagnating in the EU today. 
 
Thus it seams, that the success of European reform process lays more and more in 
better governance. EU is often seen as a model example of multi-level governance, 
which creates many of the New Regionalism patterns in this field. According to Van 
Langenhove (2005, p. 21), it is a complex multi-level governance system with a deep 
co-operation between states, with firm devolution of power within states and a strong 
international legal framework. In economic reform aspects (where the lack of public 
support based on negative expectations can prevent governments from crucial reforms), 
it is however apparently not enough. Better governance, i.e. more effective and 
competition-based system of administration, based on interaction of private sector 
(seeking for liberal and innovative environment) and public demands (represented 
namely by concerns on environmental or social stability), is still needed. Subsequently, 
unaffordable demands on social protection would probably step aside in front of the 
efforts on increasing Europe’s competitive positions and long-term prosperity. 
 
Especially in New Member States of the EU, there is a strong belief that the Eastern 
Enlargement, which represents a crucial manifestation of New Regionalism in Europe, 
can bring a strong stimulus for EU’s internal transformation. However, so far the 
reforms induced by Eastern Enlargement namely concern EU’s institutional building, 
further transformation and better economic governance (based on trade and investment 
opportunities; a pressure on EU’s flexibility, transparency and simplicity of its tools; 
and on creating more favourable climate of competition and innovations) could be 
evoked by economic challenges and opportunities of the enlargement. 
 
3.3. Global aspects 
 
As the most developed case of second generation integration, i.e. based on economic as 
well as political aspirations to build stronger regional governance, the European Union 
has created a political model that challenges assumptions about governance all over the 
 
14 
world (Van Langenhove, 2005, p. 21). With respect to its external political ambitions 
it is mostly probable that the EU will in a great extent form the new modes of global 
governance. Yet this issue somehow transcend the aims and aspiration of this paper, it 
is a very important aspect of EU’s influence (closely connected to the effects of New 
Regionalism on the world order) and cannot be neglected at all. With respect to 
conclusions done above, it must be emphasized that success of EU’s global aspirations 
is strongly preconditioned by the reform of its internal governance. Thus the New 
Regionalism perspective and the recommendations given in this paper influence EU’s 
role in global governance as well. 
 
 
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