Regional Politico-Economic Institutions

Introduction Regional Integration is a process in which neighboring states enter into an agreement in order to upgrade
cooperation through common institutions and rules.

The objectives of the agreement could range from economic to political to environmental, although it has
typically taken the form of a political economy initiative where commercial interests are the focus for
achieving broader socio-political and security objectives

Regional integration has been organized either via supranational institutional structures or
through intergovernmental decision-making, or a combination of both.

Types 1. Economic Integration

 Removing Trade Barriers (Tariffs, Quotas)  NAFTA (Example of Scale 2)
 Instruments and Institutions are created to enable the market of integrated area to function properly
 Positive
 Removal of Obstructions  Negative
2. Political Integration
 Common policies and political institutions after their economies become completely integrated into a
single market (Become a New Country in effect)
Degrees of
Economic
Integration

Difference 1. Attitude towards Political Union  EU has exhibited the usual pattern leading gradually to a Political
b/w European Integration  East Asia is opposite
and East ASEAN Principles
Asian a. Respect for Sovereignty, Independence and Territorial Integrity of Members
Approach b. Non-interference in internal affairs
2. Lack of Common Political Institutions and Policies
 ASEAN doesn’t have authority to enforce Human Rights or possesses a Formal Mechanism for Conflict
Resolution
Regionalism in Asia is much less ambitious, encompassing only a few economic institutions with limited
authority
3. Rules for Entering Regional Groupings
 EU has clear rules (Copenhagen Criteria  Democracy, Market economy, Complete Acceptance of EU
Rules and Regulations in the National System)
 In EAST ASIA  Difficult of identify an apparent set of rules  The ASEAN Enlargement Process and the
creation of groups such as ASEAN+3 OR East Asia Summit  Creating a sense of instability over the
evolution of Asian Economic Architecture

European Union
Introduction A Political and Economic Union of 28 Member States  Internal Single Market through a standardized system
of laws that apply in all member states in those matters, and only those matters, where members have agreed
to act as one  HQ is Brussels
 The EU and European citizenship were established when the Maastricht Treaty came into force in 1993.
1. Ensuring the free movement of people, goods, services and capital within the internal market
2. Enact legislation in justice and home affairs and maintain common policies on trade,
agriculture, fisheries and regional development.
3. For travel within the Schengen Area, passport controls have been abolished.
4. A monetary union was established in 1999 and came into full force in 2002 and is composed of 19 EU
member states which use the euro currency.
5. Last Major Amendment in EU Constitutional Rules  Treaty of Lisbon 2009  Legal Effect to Charter of
Fundamental Rights
Statistics 7.3% of World Population  2017 GDP of $19.6 Trillion  All 28 countries have high HDI Rankings 
Awarded Nobel Peace Prize in 2012  Union maintains permanent diplomatic missions throughout the
world(UNO, WTO, G7, G20)  Has been described as an Emerging Super Power  Largest Net Wealth after
USA ($98.2 Trillion) equal to 25% of Global Wealth  161 Fortune 500 Companies have their HQs in EU
Challenges Brexit, Eurozone Crisis, Increasing Migration from the Middle East, Islamophobia & Immigration Policies
Copenhagen (Democracy, Rule of Law, Free Market Economy, Adoption of Existing Body of ET Law)  Contingent upon the
Criteria Consent of All Members
Question of A Partial Supra-National System comparable to Federalism  Question of Superiority of EU and National Law
Sovereignty is subject to debate  Treaties don’t explicitly address this matter but Court Judgements have established the
superiority of EU Law  Some National Courts also accept the European Court of Justice’s interpretation like
France, Italy and Germany However, in Poland, it does not override the National Constitution
Exclusive Shared Competence in Foreign Policy and Defense
and Shared
Competence

Political System of EU
Institutions Article 13 of the Treaty on European Union
 the European Parliament,
 the European Council,
 the Council of the European Union,
 the European Commission,
 the Court of Justice of the European Union,
 the European Central Bank and
 the Court of Auditors
Comparison Largely unique  Comparable Elements
  Distribution of Powers  Federalism of Germany  Predominantly shared  States can exercise federal
powers where the federation has not already exercised them  And the states participate strongly with
decision making at the federal level.
 This is in contrast with other federations, for example the United States, where powers are clearly divided
 The Council President may have prestige, it would lack power and while the Commission President would
have power, it would lack the prestige of the former.
Absence of Parliamentary Initiative
European  Directly elected  Exercises Legislative Function together with the Council of the European Union and
Parliament the European Commission
 751 members  Second-largest democratic electorate in the world (after India)
 Largest trans-national democratic electorate in the world (380 Million Eligible Voters)
 Directly elected every five years by universal suffrage since 1979  Before that, appointed by National
Parliaments
 Seats are allocated on the Basis of Population of Each State
 About 1/3rd are women
European  The executive body of the EU  Accountable to Parliament.
Commission  In particular, Parliament elects the President of the Commission
 Approves (or rejects) the appointment of the Commission as a whole.
 It can subsequently force the Commission as a body to resign by adopting a motion of censure
 Economic Cooperation Organization(ECO)
Introduction Eurasian Politico-Economic Intergovernmental Organization  Founded in 1984 in Tehran by Pakistan, Iran and
Turkey  A Platform to promote Trade and Investment Opportunities
Objective  A Single Market for Goods and Services
Economic Bureau in Turkey, Secretariat in Iran, Scientific Bureau in Pakistan
Predominantly Muslim States  CSAs connected to Mediterranean through Turkey, to the Persian Gulf via Iran
and to the Arabian Sea via Pakistan
ECO itself has observer status in the OIC since 1995
Framework Mostly in the form of Bilateral Agreements and Arbitration Mechanism b/w Fully Sovereign National States 
and Similar to ASEAN
Agreements Examples of Agreements
 FTA b/w Iran and Turkey is due to be signed
 Pakistan-Turkey FTA is due to be signed
 Pakistan has FTAs with both Afghanistan and Iran  Signed and in the process of implementation  Most of
Afghanistan’s trade is currently through Pakistan
 Pakistan-Afghanistan Transit Trade Agreement  Designed to facilitate trade for CSAs via both Afghanistan
and Pakistan
 Iran-Pakistan Gas Pipeline
 Pakistan’s Petroleum Import Contracts with Azerbaijan
 Other projects with Central Asia
Objectives  Sustainable economic development of Member States;
and  Progressive removal of trade barriers and promotion of intraregional trade
Principles  the Greater role of ECO region in the growth of world trade;
 Development of transport & communications infrastructure linking the Member States with each other
 Economic liberalization and privatization;
 Mobilization and utilization of ECO region's material resources;
 Regional cooperation for drug abuse control, ecological and environmental protection and strengthening of
historical and cultural ties
 Sovereign equality of the Member States and mutual advantage;
 Exchanges in educational, scientific, technical and cultural fields
Members  Afghanistan
  Azerbaijan
 Pakistan
 Iran
 Turkey
 CSAs
Structure a. Council of Ministers (Foreign or other designated by the gov.)  Meets at least one year
b. Council of Permanent Representatives  Ambassadors
c. Regional Planning Council  Head of Planning Commissions of Member States
d. General Secretariat  Six Directorates under the supervision of Secretary General
ECO Directorate of Industry & Agriculture
ECO Directorate of Trade & Investment
ECO Directorate of Energy, Mineral & Environment
ECO Directorate of Transport & Communications
ECO Directorate of Economic Research & Statistics
ECO Directorate of Project Research & Development
Critical  No Meaning Gains in Trade  16% of Global Population but only 2% of Global Trade
Analysis  Challenge of Pak-Afghan Relations
 Turkey becoming the Next Energy Hub of the Region  A Welcome Opportunity for Pakistan
 China not a Member  But Chinese Foreign Minister participated in 2017 ECO Pakistan Summit  Theme
was “Connectivity for Regional Prosperity”  An opportunity to emphasize OBOR’s strategic benefits for
the ECO Region
 A Forum to bridge Trust Deficit with Iran
 Russia’s Influence in the Region should not be underestimated  Not an ECO Member  Kazakhstan and
Kyrgyzstan are also the members of Russia-led Eurasia Economic Union(EEU)  Greater cooperation b/w
the two organizations

Statistics According to the ECO Report titled “ECO Fifteen Years of Cooperation and Development 2000-2015” published
in 2017, the total population of the ECO region is around 450 million, amounting to 6.23% of the world’s
population, while the region’s GDP is around 7.79% of the world’s total GDP.

Also, the Foreign Direct Investment inflows in ECO region increased 10 times since 2000 and reached $37.7
billion in 2015

Prospects 1. Transportation & Communication

 Needs to be focused  North South Transport Corridor, CPEC, Chabahar and Gwadar Ports, etc.
 Potential to function better in parallel OBOR
 7/10 ECO countries are land-locked
 ECO may gain momentum in the coming years
2. Energy Resources and Energy Corridors
 Will be a key pillar in future
 Energy rich CSAs  Instability in the Middle East
 EU has become more interested in seeking ways to diversify their energy resources and alleviate their
dependency on Russia
 5-Energy Rich ECO Countries  Corridors through Central Asia  South Caucasus  Europe via Turkey
Conclusion In conclusion, it is possible to say that the ECO members recognize the need to focus on the real potential of the
ECO region and to strengthen the integration processes in order to increase national welfare. Additionally, the
ECO region is becoming increasingly important for outside powers and projects covering Eurasia overall. The fact
that China and Russia sent observers to ECO Summit which was held this year in Islamabad clearly shows that
both countries are following the developments in the ECO region very closely.