INTRODUCTION

Regionalism is the regional integration of the states with mutual interdependence that
started on 1950’s and 1970’s. According to different articles, it is well-introduced by the
Western Europe and the best example is the European Union. Sauderbaum (2014) stated that
regionalism refers to the political and cognitive idea of forming regions. The definitions for
regionalization and regionalism are always seen to be the same but are different terms. As one
goes through the article, the difference between the two terms will be one of the topics to be
read and discuss.

The scope of regionalism is more than just forming regions in the same geographical
scale. It can be of global scale, especially the contemporary one. It is usually created for the
mutual interdependencies of nation-states such as economic, social, and political
interrelationships or historical, cultural, and ethnic bonds.

It does not end with the interrelationships discussed but with deeper reason as to why
regionalism is formed. There are two main points in regionalism: economic issues and security
purposes. For that, different definitions of regionalism are utilized and different types emerged.

HISTORICAL BACKGROUND

Early regionalism started from 1950’s and 1970’s as regional integration with
endogenous process using neo-functionalism approach. It starts with the “spill-over” from
economic integration to political unification of Western Europe. (Sauderbaum 2014)

By mid-1980 is the start of explosion of regional programs on a global scale. It does not
only conform within the states or continent but also dealt with the nations across the globe. As
Sauderbaum (2014) stated, it is evident in the revitalization and expansion of many other
regional projects around the world.

1985 marks the start of new regionalism on a global scale. It is by 1985 White Paper on
International Market and Single European Act made possible. It is characterized by the dynamic
process of European integration.

To date, regionalism is said to have four waves. The first wave occurred during the
second half of 19th century with the European phenomena distinction. It is associated with the
emergence of liberal international trading system, and PTAs were networked via the most
favored nation clauses. (Mansfield and Solingen 2010)

The second wave began after the World War II. It is said to be economically
discriminatory than of the first one. This is where PTAs began to give rise to the notion of
“beggar-thy-neighbor” trade policies. (Irwin 1993)

1960’s and early 1970’s was the beginning of the third wave of regionalism. It was then
followed by the fourth wave. In which, it began during the 1990’s.
REGIONS, THE BECOMING OF REGIONALIZATION AND REGIONALISM

Before on can define the two other terms, it should start with defining what region is
first. Are there things to consider before a nation create a region? According to Edward
Mansfield and Etel Solingen (2010), regions are frequently defined as groups of countries
located in same geographic space but some researchers agree that it implies more than just the
physical proximity. In here, one will understand what a region is and how to consider
something as such.

One can consider region a region based on its location. Nations or states within the
same geographical or regional location usually form a region. Not based on other things but
only the location is needed to consider a region. That is the basic way of considering a region.

Russett (1967) stated that regions are based on regional proximity, social and cultural
homogeneity, shared political attitudes and institutions, and economic interdependence. On
the other hand, Thompson (1973) argues that regions include states that are geographically
proximate, interact extensively and have shared perceptions of various phenomena.

As for Sauderbaum, regions are socially constructed and politically contested. It can
usually captured by micro-regions or macro-regions. In which, this definition is supported by
Katzenstein (2005) by defining region as politically made.

Apart from location and political aspects, there are different attributes that can
contribute to the composition of what or whose nation is to be considered part of region. These
attributes are the interdependence of each nation or states Deutsch et al. (1953) view high
levels of interdependence across multiple dimensions – economic transactions,
communications, and political values – as determining factors whether a group of countries
composes a region.

REGIONALIZATION AND REGIONALISM

For the start, one can view regionalization as the process and regionalism as the
attribute. Regionalization is the process of forming of regions while regionalism consider
different attributes before forming a region that is based on the need of states forming the
region. Regionalism refers to the political and cognitive idea of forming regions with body of
ideas, values, and objects that contribute to the creation of and modification of a particular
region on world order type. (Sauderbaum 2014)

For deeper understanding, below are the differences and comparison made by different
people or researchers between the two:

Regionalization is an economic process in which trade and investment within region

grow more rapidly than regions’ trade and investment with the rest of the world. (Hagard 1993)
On the other hand, regionalism is seen to be a political process marked by cooperation and
policy coordination.

As Fawcett (2004) sees it, regionalism is a policy or project while regionalization is both
a project and process, preceding and flowing from regionalism. This idea is supported by
Hurrell. As cited by Mansfield and Solingen, Hurrell defined regionalization as a feature of
regionalism.

With the information discussed, the difference between the two can be drawn.
Regionalization, apart from being part of regionalism, is an economic process. Regionalism, on
the other hand, apart from the economic and security purposes, is usually politically aligned
and governed.

REGIONALISM

Different types of regionalism can be derived from the information discussed. From its
beginning that is dominantly based on Europe to the recent date. Differences from different
time can also be drawn. Even the four waves of regionalism have with them the different
characteristics of regionalism.

Adam Lupel (2004) defined regionalism as an attempt to demonstrate how democratic

politics might be configured to regain some of its regulatory and steering capacity vis-à-vis
transnational economic and political order. Regionalism emerged because of the need for
something. May it either be for economic or security purposes of states. These two greatly
contribute of what regionalism is and what it is made for. It is also a response to political and
economic context that can be derived as project for the formulation of modern global order.

There are also two types of regionalism characterized as old and new regionalism. Old
regionalism is known as the shallow integration that only involves reduction and elimination of
trade barriers in commodities. Deep integration, on the other hand, is the so-called new
regionalism with new features and characteristics. This integration involves additional elements
of harmonizing national policies and allowing and encouraging internal factor mobility.
(Burfisher, Robinson, Thierfelder 2003)

More than what has been discussed regionalism does not only speak about economic
neither intention nor security purposes of regions involved. It can also be for protection of the
environment or certain cultures. Thus, it can be an environmental regionalism or cultural
regionalism.

ECONOMIC REGIONALISM

Munakata (2006) have seen regionalism to involve institutions that were established by
governments to promote regional economic integration. These were formed for the purpose of
stabilizing economic status or making the lives of members easier with things related to
economy specifically, trade. These economic institutions were established for the promotion of
acting as one of the members or with unification when it comes to economy.

This type of regionalism is usually concern with tariffs and trade. With this, 3 terms are
dominant and one will usually encounter. These are PTAs, RTAs, and FTA.

• Preferential Trade Agreements (PTAs)

These are institutions that provide each member state with preferential access to their
participants’ market. This involves states in geographic proximity such as European Union and
Mercosur and economic policy for the coordination and cooperation among members.
(Mansfield and Solingen 2010)These institutions can bring both positive and negative effects to
the member states such as welfare, market access and discrimination.

PTAs also liberalize trade among members and guarantee each with preferential market
access and discriminate against parties. This typically improves members’ terms of trade vis-à-
vis the best of the world, thereby enhancing their welfare. And that is one of the benefits of
PTAs.

According to Krugman (1993), PTAs can lead to ‘beggaring-thy-neighbor’ and trade wars
between a bloc and economically large country. PTAs may also bring conflict to member states
especially those that are not economically and non-economically stable members.

Another disadvantage is in terms of World Trade Organization (WTO). These constitute

stumbling blocks to multilateralism, together with being the stepping stones to multilateral
liberalization thus, damaging the WTO. (Duina 2006, Bhagwati 2008)

Another benefit is that it expand the size of the market that the members have
uncontrolled access. This can help members in realization of economic scale thus, can promote
members’ welfare. But then, this advantage is not visible in all PTAs. “There are only scattered
evidence that most PTAs have this effect.” (Johnson 1965, Bhagwati 1968)

• Free Trade Areas (FTAs)

These are solid forms of regionalism. These involve elimination of trade barriers among
is member-states. (Mansfield and Solingen 2010) Like PTAs, it also expand the market access of
the member-states made possible by agreements.

FTAs are common type of RTA. In FTA members liberalize internal trade but retain
independent external tariffs. In here, members are allowed to retain different tariffs against the
rest of the world, but this includes detailed rules of origin. (Burfisher, Robinson, Thierfelder
2003)

Example of FTA:

• NAFTA
 • US Agreement with Israel , Jordan , Singapore , and Chile.
• Regional Trade Agreement (RTA)

This is the general term that refers to a whole spectrum of levels of economics
integration. In which, the RTA that was introduced in the past 10-15 years involves elements of
deeper integration (new regionalism). This also linked the developing and developed
countries.(Burfisher, Robinson, and Thierfelder 2003 )

RTA includes rules of origin same as FTA. In which brings arguments for both institution
and agreement. “Special interest pressure on the content requirement in ROOs gives potential
to be used as non-tariff barriers on imported intermediaries, causing them to become an
imported but hidden source of trade dimension.” Krueger argues (1995)

SECURITY REGIONALISM

This invoves political forms that fall short of alliances.characterized by state within a region
creating collective security mechanisms , regimes, zone of relative peace, cooperative security
dialogues , zone of free of weapons of mass destruction (Mansfield and Solingen 2010). It is
made for harmony and to avoid conflict between member states.

Accordingly diversified forms in cooperation in security regionalism given rise to a deeper

interest in regional institutional design.

In which this regionalism can be linked with economic regionalism by the evidence of PTAS.This
is for a fact that reduce political-military tensions among its members.

TRADE-CREATING AND TRADE-DIVERTING UNIONS (VINER 1950)

As for the conclusion, there are two types of regionalism that can be derived when it
comes to its advantages and disadvantages. These are the TRADE-CREATING AND TRADE-
DIVERTING UNIONS. These two depict what benefits and disadvantages a regionalism can give
specifically, PTAs.

The trade-creating unions enhance welfare: Liberalization among member-states sgift5s

imports from less efficient producers outside the arrangement to more efficient producers with
in. While the trade-diverting unions undermine welfare: As preferences afford producers inside
the arrangement shift imports from more efficient producers outside the arrangement to less
efficient producers inside it.

The positive and negative effects of regionalism lie on how the member-states are
affected. It differs from one to other. The need for regionalism arises from the need for
protection or the need to stabilize the economy. Different types will give answer to different
problems the regionalism are made to crate solution in relation among nations.