5.1, 5.1.1, 5.1.2 - Regionalism and sovereignty

Forms of regionalism

States can cooperate regionally without creating the same kind of organisation or giving it the same powers.

Economic regionalism lowers barriers to trade or coordinates economic policy. The North American Free Trade Agreement (NAFTA), which entered into force in 1994, reduced trade barriers between the United States, Mexico and Canada. Its successor, USMCA, began in 2020. These agreements establish a trading framework; they do not create a common North American currency or government. USTR's NAFTA record, USMCA record.

Security regionalism coordinates defence or conflict management. NATO's Article 5 treats an armed attack within its treaty scope as an attack against all allies. Each ally takes the action it considers necessary; the commitment does not mean every attack automatically produces an identical military response. Shared defence can deter an attacker by increasing the likely costs of aggression. NATO's Article 5 explanation.

Political regionalism coordinates public decisions, institutions or political standards. The European Union (EU) combines government bargaining with institutions able to make binding decisions in powers assigned by its treaties. The African Union (AU) also has political and security objectives. These categories overlap: a trade agreement can affect labour standards, and a political union can develop defence cooperation.

Why regionalism grows

Regionalism becomes attractive when separate national action cannot secure a benefit that states want.

Neighbouring economies often have connected supply chains, transport routes and labour markets. Reducing repeated border obstacles can enlarge the market available to firms and make investment more predictable. States may also want a stronger bargaining position: a group negotiating market access has more to offer than a small state acting alone. The gains are not automatically distributed equally. A competitive industry may expand while a less competitive industry loses protection.

Shared dangers provide another motive. A conflict, polluted river or refugee movement can cross borders. Governments therefore have an incentive to coordinate even when they disagree about other issues. After the Second World War, pooling coal and steel in Western Europe aimed to make preparations for war harder to conceal and deepen mutual dependence. This linked economic integration to a security purpose. EU account of the Coal and Steel Community.

History and identity also matter. Common experiences can support cooperation: the AU's origins in the Organisation of African Unity connect regional institutions to decolonisation and Pan-African aspirations. Conversely, historical rivalry can make governments distrust a powerful neighbour. Shared geography creates an opportunity for cooperation, not a guarantee of agreement. AU institutional history.

Regionalism has grown through both widening, when more members join, and deepening, when members cooperate in more areas or grant institutions greater powers. An organisation can widen without becoming more supranational. More members may increase its combined resources while making agreement harder.

Regionalism and globalisation

Regional integration can both advance global connections and protect a region from their pressures.

Globalisation is the growth of connections and interdependence across the world. Regionalism operates at a smaller geographical scale. The two are compatible when regional rules remove barriers, connect supply chains and help members participate in wider world markets. A regional agreement can be a manageable step towards cooperation: fewer governments may find it easier to agree standards than a worldwide negotiation would.

Regionalism can also fragment the world economy. If members grant each other favourable access while imposing barriers on outsiders, some trade may shift away from a more efficient external producer. Different regional standards can oblige a business to meet several incompatible rules. Cooperation inside one bloc may coexist with rivalry between blocs.