The first wave of regionalism

The first wave of regionalism emerged in the period after the Second World War.¹⁶ While regionalism was adopted as a strategy intended to provide collective benefits for its participants as opposed to solely serving the interests of great powers as under the earlier imperial schemes, ‘regional agencies were subordinated to the broader purposes of the East-West conflict, indeed many were specifically designed to serve

16 An overview of all the major regional integration schemes which emerged during the first and second waves of regionalism is presented in Appendix B.

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the interests of one of the two superpowers’ (Fawcett, 1995: 13). Examples in this regard include inter alia the Warsaw pact and the Organization of American States (OAS). Indeed the emergence of the EU, which can be traced to the establishment of the European Coal and Steel Community (ECSC) and the EEC in the 1950s, is perceived as having been based on both the desire of European states to regain power and security through economic development and as an element of US strategy in the bi-polar international system (Mattli, 1999: 70-71). In this regard the initiation of regional cooperation in Europe is explained as a response to the burgeoning threat of the Soviet Union on the part of both European nations and the US (Mearsheimer, 1990: 10). With the emergence of bi-polarity, competition between European states for relative gains became less significant given that their security now depended on the policies of others (Waltz, 1979: 70).

The United States is also perceived to have sought to promote the reconstruction of Europe through the Marshall Plan in order to facilitate US export led growth and is considered to have played a hegemonic role in promoting European regionalism in this regard (Mattli, 1999: 71). Telò (2007: 3) argues that the US was attempting to lay the foundations of a new US-centred multilateral order. He states that ‘the double aim of containing the Soviet threat and of creating a transatlantic community made it possible to harmonize the interests and ideals of the US New Deal, associating realism and idealism, namely peace, prosperity and democracy’ (ibid.).

While systemic factors undoubtedly provided much of the impetus for European integration consideration must also be taken of the internal drivers of regionalism.

Haas (1958) developed a neo-functional theory of integration which emphasized the potential for spillover which existed due to the functional links between policy areas and the role played by supranational institutions in facilitating deeper integration in this regard. In later years liberal intergovernmentalism (Hoffman, 1966: Moravcsik, 1993, 1997) focused attention of the role played by economic interdependence among countries in driving political leaders to engage in regionalism. Both approaches emphasize the fact that interdependence drives the process of regionalism. The main area where intergovernmentalism differs is in its perception that increases in power at the supranational level result solely from the decisions of national governments as opposed to spillover. In addition, intergovernmentalism rejects the notion that supranational institutions can come to be on an equal footing

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with national governments. In any regard the endurance of regional cooperation in the period after the end of the Cold War has been at odds with the predictions of realist scholars (Mearsheimer, 1990) and has lent weight to such functional and liberal intergovernmental approaches.

The early success of the European experience with regional integration inspired other groups of countries in Latin America, Asia and Africa to address their own shared security and economic challenges by engaging in regionalism during the 1960s and 1970s. Initially several continental level organizations emerged including inter alia the Latin American Free Trade Association (LAFTA) and the Organization of African Unity (OAU). These large multipurpose schemes were later superseded by more focused sub-regional initiatives such as the ASEAN, the CAN, the GCC, the Central American Common Market (CACM), and the Economic Community of West African States (ECOWAS).

In addition to addressing security concerns, the integration processes which emerged among developing countries during this period were often motivated by a desire to collectively attempt to rectify perceived structural imbalances in the global economic system (Bhagwati, 1993: 28; Fawcett, 1995: 15). Many early regional organizations were created in order to attempt to strengthen the position of developing counties in international economic relations. The idea was that regionalism held the potential to end the exploitative and dependent relationship between developing countries of the South and the industrialized North. In line with the recommendations of development economists such as Raúl Prebisch (1950, 1959) many of these early regional organizations aimed at promoting the development of their members through coordinated action. While these organizations were not homogenous they did share certain common characteristics and in this regard regionalism during the first wave is often termed ‘closed regionalism’ due to its extensive inward-orientation.

The members of the regional organizations established during this period sought to create large protected internal markets in order to shield domestic producers from outside competition and to promote industrialization. Bhagwati (1993: 28) posits that the rationale behind these strategies was that ‘given any targeted level of import-substituting industrialization, the developing countries with their small markets

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could reduce the cost of this industrialization by exploiting economies of scale through preferential opening of markets with one another.’ This was to be achieved through the selective liberalization of internal trade in conjunction with the implementation of high external tariffs, import quotas and capital controls. By the mid-1970s a large number of states in Latin America, Asia, and Africa were members of at least one regional organization.