DOCSLIB.ORG

Regional Economic Community Building Amidst Rising Protectionism and Economic Nationalism in ASEAN

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Regional Economic Community Building Amidst Rising Protectionism and Economic Nationalism in ASEAN Regional Economic Community Building amidst Rising Protectionism and Economic Nationalism in ASEAN Alexander Chandra The Habibie Center Abstract Despite its ambitious ASEAN Economic Community (AEC) project, protectionism, and economic nationalism are on the rise in ASEAN. Protectionism, however, is not new to Southeast Asia, with governments across the region employing an inward- looking economic policy when they enjoy economic stability, and pursuing economic reform when confronted with major economic challenges. Unfortunately, embryonic industries will always exist in the region, and governments will find excuses to safeguard their existence. Drawing on the Murdoch School of critical political economy approach, this article argues that the inclination towards protectionism in ASEAN be primarily rooted in the domestic political economy of member states. Apart from bringing about domestic regulatory changes, major economic liberalisation initiatives of ASEAN, such as AFTA and the AEC, significantly redistribute power and resources, and ignite struggles between competing for domestic economic influences, many of which are in favour of government’s protection. Whilst existing technical initiatives to address protectionism are useful, major crises that encourage structural adjustments in all ASEAN Member States might be needed to overcome protectionist inclinations in the region. Keywords: protectionism, economic nationalism, economic regionalism, ASEAN Introduction Association’s economic integration project. The rise of protectionism, as an The long-awaited ASEAN Economic expression of economic nationalism, in Community (AEC) was finally launched particular, has been seen by many experts on 1st January 2016. Despite the success of and practitioners alike as a key hindrance the Association of Southeast Asian to ASEAN’s effort to deepen its economic Nations (ASEAN) in officially launching integration project. While senior officials its most ambitious project to date, of ASEAN Member States (AMS) have scepticisms linger over the viability of the consistently reiterated their countries’ Journal of ASEAN Studies, Vol. 4, No. 1 (2016), pp. 1-19 ©2016 by CBDS Bina Nusantara University and Indonesian Association for International Relations ISSN 2338-1361 print / ISSN 2338-1353 electronic 2 Regional Economic Community in ASEAN commitments towards the AEC; a strong domestic pressures, AMS become significant contrast is depicted on the more reserved in their commitments ground. Despite significant achievement towards the deepening of AEC project. in reducing tariff barriers over the past decade, for instance, non-tariff measures Protectionism, however, is not (NTMs)/non-tariff barriers (NTBs) remain new to Southeast Asia, with governments rampant across the region. Though the across the region employing such an incidence of NTMs in ASEAN is relatively inward-looking economic policy when moderate in comparison with other they enjoy economic stability. On the regions of the world (Cadot et al., 2013: other hand, major economic reforms, 12), these protective measures will prove usually pursued in the form of to be major stumbling blocks for ASEAN deregulation and liberalisation, are to attain its 2025 Economic Vision.1 commonly adopted when crises emerge. AMS’ positive attitude towards the Domestically in each AMS, deepening of ASEAN’s economic protectionist push against the AEC is integration in the immediate aftermath of mounting. Shortly prior and during the the late 1990s Asian financial crisis immediate aftermath of the AEC through the launching of the AEC is a launching, public debate on the subject case in point. Consistent with Jones’s was, unsurprisingly, becoming more (2015) Murdoch School of critical political- common. While many express their economy approach, this article argues that excitement about this ambitious regional the inclination towards protectionism in economic integration project, others ASEAN be primarily rooted in the remain sceptical, highlighting their domestic political-economy of AMS. More countries’ unpreparedness to face, inter specifically, as Jones further elaborates, alia, increasing competition as a result of agreements, such as the ASEAN Free the AEC. In Indonesia, for example, Trade Area (AFTA) and the AEC, call for professionals, such as engineers, and major rescaling of economic governance at workers express their concerns over the the regional level, which affects domestic potential flood of their more qualified regulatory changes that would peers from other AMS.2 Elsewhere, such significantly redistribute power and as in the Philippines and Vietnam, experts resources, and ignite struggles to promote and business practitioners alike also warn and constraints their effects (pp. 3-4). the difficulty that micro-, small-, and Whilst existing regional initiatives to medium-sized enterprises (MSMEs) address protectionism are useful, major would face amidst the AEC.3 With such crises that encourage major structural adjustments in all AMS might be needed 1 The AEC Vision 2025 is part of an overarching to overcome fundamental protectionist ASEAN Community Vision 2025 that was adopted inclination in the region.4 at the 27th ASEAN Summit, which took place in Kuala Lumpur, in November 2015. The document serves as a guide for ASEAN to deepen its economic integration post-2015. Further details concerning the AEC Vision 2025 see ASEAN 4 The Asian financial crisis in the late 1990s, for Secretariat (2015b). example, prompted ASEAN to accelerate and 2 See, for example, Tempo (2015) and Ambarita deepen its economic integration process. The AEC, (2015). which entails, amongst other things, indirect efforts 3 See, for example, Mercurio (2015) for the to address protectionism, is a major regional Philippines and Anh (2015) for Vietnam economic reform resulted from such a process. Journal of ASEAN Studies 3 In the meantime, however, the section also briefly highlights ASEAN’s development of domestic consensus efforts to address protectionism, remains a key element in the deepening of particularly in the area of elimination of ASEAN’s economic integration project NTMs/NTBs. Discussion in section four, (Yean and Das, 2015). In this regard, as meanwhile, is focused on exploring the Yean and Das further argue, greater domestic sources of protectionist policy coherence in domestic economies, inclination in ASEAN. More specifically, it increased stakeholder consultation, attempts to illustrate sector/actor-specific mitigation of the negative impact of AEC struggles that affect AMS’ commitments on domestic stakeholders, and the towards the deepening of ASEAN overcoming of resource constraint are economic integration. Furthermore, primary areas that ASEAN needs to pay section five makes an argument for the its attention to post-2015 (pp. 7-8). Aside deepening of ASEAN’s economic from this, an effective strategy to find integration in advancing domestic common denominators to lessen reforms that could assist the dismantling protectionism is also needed. Though past of protectionist inclination amongst AMS. initiatives, particularly the Priority Finally, the article is concluded in section Integration Sectors (PIS),5 were capable of six where the author attempts to identify attaining such a goal, AMS’ half-hearted specific policy-oriented recommendations commitments render these initiatives for consideration towards dismantling ineffective. The new AEC Vision 2025, protectionist inclination in the region. which identifies a new set of sectoral priorities for ASEAN, could potentially Domestic sources of protectionism: A serve as an arena in which efforts to lessen theoretical overview protectionist measures are tested.6 Protectionism is understood as a This article is divided into four form of government’s policies and actions sections. Whilst the subsequent section that restrict trade and economic openness two offers overview on the existing in favour of the protection of local literature of domestic sources of business and industries, which can be protectionism, the analysis in Section implemented through the imposition of three is dedicated to showing trends and tariffs, quotas, subsidies, as well as other pattern of protectionism in ASEAN. The forms of direct state intervention in the economy. Two notable arguments have 5 Launched in 2004, PIS is an initiative aimed at been commonly used to promote trade accelerating integration in sectors that are deemed protectionism, and these include national priority by AMS. Originally covering 11 sectors, security and infant industry arguments. including electronics, e-ASEAN, healthcare, wood- Whilst national security argument is often based products, automotive, rubber-based products, textile and apparel, agro-based products, advanced with consideration of protecting fisheries, air travel, and tourism, in 2006 logistics an industry that is deemed critical to was added as the 12th PIS. national security; infant industry 6 The new AEC Vision 2025 identifies several key argument generally calls for temporary sectors that are deemed important to enhance protection of fledging domestic industries connectivity and sectoral cooperation in the region, and these include: (1) transport; (2) information, from foreign competition (Warrier, 2011, communication, and technology (ICT); (3) e- p. 225). Amongst all arguments commerce; (4) energy; (5) food, agriculture, and commonly used to advance trade forestry; (6) tourism; (7) healthcare; (8) minerals; protectionism, infant industry argument and
Load more

Recommended publications
  • Should Europe Become a Fiscal Union?
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Keuschnigg, Christian Article Should Europe Become a Fiscal Union? CESifo Forum Provided in Cooperation with: Ifo Institute – Leibniz Institute for Economic Research at the University of Munich Suggested Citation: Keuschnigg, Christian (2012) : Should Europe Become a Fiscal Union?, CESifo Forum, ISSN 2190-717X, ifo Institut - Leibniz-Institut für Wirtschaftsforschung an der Universität München, München, Vol. 13, Iss. 1, pp. 35-43 This Version is available at: http://hdl.handle.net/10419/166470 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Focus SHOULD EUROPE BECOME A problems that have led to the current crisis. The final section offers some conclusions. FISCAL UNION? Economic and fiscal imbalances CHRISTIAN KEUSCHNIGG* Prior to monetary unification, the guiding principle of Introduction European unification was the notion of subsidiarity.
    [Show full text]
  • Investment Provisions in Economic Integration Agreements
    UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT INVESTMENT PROVISIONS IN ECONOMIC INTEGRATION AGREEMENTS UNITED NATIONS New York and Geneva, 2006 ii Investment Provisions in Economic Integration Agreements NOTE As the focal point in the United Nations system for investment and technology, and building on 30 years of experience in these areas, UNCTAD, through DITE, promotes understanding of key issues, particularly matters related to foreign direct investment and transfer of technology. DITE also assists developing countries in attracting and benefiting from FDI and in building their productive capacities and international competitiveness. The emphasis is on an integrated policy approach to investment, technological capacity building and enterprise development. The term “country” as used in this study also refers, as appropriate, to territories or areas; the designations employed and the presentation of the material do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. In addition, the designations of country groups are intended solely for statistical or analytical convenience and do not necessarily express a judgment about the stage of development reached by a particular country or area in the development process. The following symbols have been used in the tables: Two dots (..) indicate that data are not available or are not separately reported. Rows in tables have been omitted in those cases where no data are available for any of the elements in the row. A dash (-) indicates that the item is equal to zero or its value is negligible.
    [Show full text]
  • The London School of Economics and Political Science
    The London School of Economics and Political Science Emergency Safeguard; WTO and the feasibility of Emergency Safeguard Measures under the General Agreement on Trade in Services S Gulrez Yazdani Student ID: 200511888 A thesis submitted to the Department of Law of the London School of Economics for the degree of Doctor of Philosophy, London, October 2012 Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of 87,180 words. [See Regulations for Research Degrees, paragraphs 25.5 or 27.3 on calculating the word count of your thesis] II Abstract The General Agreement on Trade in Services (GATS) along with other agreements was concluded in the Uruguay Round of Multilateral Trade Negotiations in 1994. However, negotiations continued within the WTO framework and are still a work in progress on some specific issues under the GATS including the question of Emergency Safeguard Measures, which has been raised in Article X of the GATS as part of its ‘built-in agenda’.
    [Show full text]
  • The International Trade Centre
    The International Trade Centre The International Trade Centre (ITC) is the joint agency of the United Nations and the World Trade Organization. Established in 1964, ITC is the only development agency that is fully dedicated to supporting the internationalization of small and medium-sized enterprises (SMEs) which are proven to be major job creators and engines of inclusive growth. ITC works with developing countries and economies in transition to achieve ‘trade impact for good’. It provides knowledge such as trade and market intelligence, technical support and practical capacity building to policy makers, the private sector and trade and investment support organizations (TISIs) as well as linkages to markets. Mission ITC’s mission is to foster inclusive and sustainable economic development in developing countries and transition economies, and contribute to achieving the United Nations Global Goals for Sustainable Development. It does this by making businesses in developing countries more competitive in regional and global markets and connecting them to the global trading system. ITC’s work focuses on areas where ITC can have the greatest impact: Strengthening the integration of developing country SMEs into the global economy; Improving TISIs for the benefit of SMEs; and Improving the international competitiveness of SMEs. Priorities ITC prioritizes support to least developed countries, landlocked developing countries, small island developing states, sub-Saharan Africa, post-conflict countries and small, vulnerable economies. Economic empowerment of women, young entrepreneurs and support of poor communities as well as fostering sustainable and green trade are priorities. Areas of work ITC’s work is structured under six focus areas: Providing trade and market intelligence; Building a conducive business environment; Strengthening trade and investment support institutions; Connecting to international value chains; Promoting and mainstreaming inclusive and green trade; and Supporting regional economic integration and South-South links.
    [Show full text]
  • Monetary Union Begets Fiscal Union
    Monetary Union Begets Fiscal Union Adrien Auclert Matthew Rognlie∗ [email protected] [email protected] August 2014 Abstract We propose a mechanism through which monetary union between countries leads to a stronger fiscal union. Although fiscal risk-sharing is valuable under any monetary regime, given nominal rigidities it is more important within a monetary union, when exchange rates can no longer adjust to offset shocks. As a result, countries in a monetary union are capable of achieving better risk-sharing, partly overcoming their lack of commitment. Still, equilibria without fiscal cooperation remain possible and imply inefficient cross-country dispersion in output. A proactive central bank can encourage transfers by providing extra accommodation when fiscal union is under stress. Transfer criterion Countries that agree to compensate each other for adverse shocks form an optimum currency area. Baldwin and Wyplosz(2012), Chapter 15 1 Introduction A simplified narrative of the recent crisis in the Eurozone can be given as follows. Following the adoption of the single currency, a number of “periphery” countries progressively lost competitive- ness as their real unit labor costs grew faster than the union average. When the global financial crisis hit in 2008, the accumulated internal imbalances came into sharp focus. Given their fixed nominal exchange rate vis-à-vis other Eurozone members, the only way periphery countries could achieve the real depreciation needed to regain competitiveness was through a painful process of economic contraction bringing about falls in domestic prices. Indeed, this adjustment process was so damaging to periphery economies that there was mounting speculation that some of them might leave the Euro.
    [Show full text]
  • Effect of Economic Integration on Agricultural Export Performance In
    economies Article Effect of Economic Integration on Agricultural Export Performance in Selected West African Countries Olatunji Abdul Shobande Department of Economics, Business School, University of Aberdeen, Aberdeen AB24 3RX, UK; [email protected] Received: 10 June 2019; Accepted: 1 August 2019; Published: 6 August 2019 Abstract: The paper investigates the effect of economic integration on agricultural export performance in West African economies using the gravity model of bilateral trade on the annual time series data straddling the period 1970 to 2016. The empirical evidence is based on the pooled OLS and fixed effects estimator. We find that economic integration, as measured by trade openness, is a remarkably strong predictor of export performance in the region. We also examine the effect of geographical distance measured by effective nominal exchange rates and we find it has a negative effect on agricultural export performance. The paper recommends the adoption of a common currency to help mitigate exchange rate negativity that serves as resistance to trade in the region. Likewise, proactive agricultural research, extension and market driven strategies are strongly advocated for driven competition and economic efficiency within the regional agricultural sector. Keywords: economic integration; agricultural; export; West Africa JEL Classification: F12; Q14; Q17 1. Introduction Agriculture remains a huge aspect of any nation’s economy given its impact on the performance of other associated economic variables. Importantly, it contributes to the integration of the economy. This paper examines the effect of economic integration on agricultural export performance in Africa. It probes the potential of economic integration to resolve the incidence of underperformance of agricultural export in West Africa and suggests policy strategies to improve the performance of the sector within the West African region.
    [Show full text]
  • Lessons for Eu Integration from Us History
    LESSONS FOR EU INTEGRATION FROM US HISTORY Jacob Funk Kirkegaard and Adam S. Posen, editors Report to the European Commission under Tender Reference 2016: ECFIN 004/A Washington, DC January 2018 © 2018 European Commission. All rights reserved. The Peterson Institute for International Economics is a private nonpartisan, nonprofit institution for rigorous, intellectually open, and indepth study and discussion of international economic policy. Its purpose is to identify and analyze important issues to make globalization beneficial and sustainable for the people of the United States and the world, and then to develop and communicate practical new approaches for dealing with them. Its work is funded by a highly diverse group of philanthropic foundations, private corporations, and interested individuals, as well as income on its capital fund. About 35 percent of the Institute’s resources in its latest fiscal year were provided by contributors from outside the United States. Funders are not given the right to final review of a publication prior to its release. A list of all financial supporters is posted at https://piie.com/sites/default/files/supporters.pdf. Table of Contents 1 Realistic European Integration in Light of US Economic History 2 Jacob Funk Kirkegaard and Adam S. Posen 2 A More Perfect (Fiscal) Union: US Experience in Establishing a 16 Continent‐Sized Fiscal Union and Its Key Elements Most Relevant to the Euro Area Jacob Funk Kirkegaard 3 Federalizing a Central Bank: A Comparative Study of the Early 108 Years of the Federal Reserve and the European Central Bank Jérémie Cohen‐Setton and Shahin Vallée 4 The Long Road to a US Banking Union: Lessons for Europe 143 Anna Gelpern and Nicolas Véron 5 The Synchronization of US Regional Business Cycles: Evidence 185 from Retail Sales, 1919–62 Jérémie Cohen‐Setton and Egor Gornostay 1 Realistic European Integration in Light of US Economic History Jacob Funk Kirkegaard and Adam S.
    [Show full text]
  • An Overview of Arab Economic Integration Ahmed Galal Bernard Hoekman
    01-3031-CH 1 3/21/03 2:24 PM Page 1 1 Between Hope and Reality: An Overview of Arab Economic Integration ahmed galal bernard hoekman rab economic integration (AEI) has been on the agenda of Arab A politicians and intellectuals and of interest to the Arab public at large for some fifty years. The force behind AEI has been the widely held belief that the formation of a united Arab economic bloc would strengthen the bargaining power of the region in an increasingly polarized world and offer its people the opportunity to achieve a better standard of living. During this period, several attempts at economic integration have been made. The Arab League, for example, was created in 1945, providing a potential institutional means of carrying out such a project. Fifty years later, however, AEI remains elusive, in contrast with the Euro- pean economic integration experiment, which began around the same time. European Community members succeeded in converting their vision into reality, while supporters of AEI remain hopeful. The divergence in the out- comes of the two experiments raises a host of questions. Were the expected economic gains from AEI so small as to preclude taking concrete and sys- tematic actions toward integration, or was it the absence of political incen- tives? Did the region lack the institutional mechanisms to carry out the pro- ject, or was it opposition from interest groups within individual countries 1 01-3031-CH 1 3/21/03 2:24 PM Page 2 that has prevented real progress to date? Looking ahead, what is the possi- ble impact of AEI on the welfare of the Arab countries involved? Are there any lessons to be drawn from the European Union (EU) experience for the Arab region, or are the two experiments so different that AEI must follow a unique path? These are the broad questions addressed in this volume.
    [Show full text]
  • 4. Economic Integration Theory and Practice
    4.4. EconomicEconomic IntegrationIntegration TheoryTheory andand PracticePractice DefinitionDefinition ofof economiceconomic integrationintegration The combination of several national economies into a larger territorial unit. It implies the elimination of economic boarders between countries. Economic borders : any obstacle which limits the mobility of goods services and factors of production between countries. DefinitionDefinition ofof economiceconomic integrationintegration • Jan Tinbergen: all processes of economic integration include two aspects: – Negative integration: the elimination of obstacles. – Positive integration: harmonization, coordination of existing instruments. Number of regional trade agreements, 1948-2002 Source: WTO (2003) LevelsLevels ofof economiceconomic integrationintegration • There are several levels of economic integration: – A. Free trade area – B. Customs union – C. Common or single market – D. Economic and monetary union TypesTypes ofof RegionalRegional TradeTrade AgreementsAgreements The EU FECHA PAIS FECHA AMPLIACIONES FECHA AMPLIACIONES Alemania Dinamarca 2004 Hungría Francia1973 Irlanda 2004 Polonia Italia Reino Unido 2004 República Checa 1958 Bélgica 1981 Grecia 2004 Eslovenia Holanda España 2004 Estonia 1986 Luxemburgo Portugal 2004 Chipre Austria - Turquía 1995 Suecia 2004 Malta Finlandia 2007 Rumanía 2007 Bulgaria 2004 Letonia 2004 Lituania 2004 Eslovaquia TypesTypes ofof RegionalRegional TradeTrade AgreementsAgreements EFTA FECHA PAÍS FECHA PAÍS FECHA PAÍS FECHA PAÍS Reino Unido Austria Austria
    [Show full text]
  • Boosting Regional Trade
    SUPPORTING REGIONAL ECONOMIC INTEGRATION AND SOUTH-SOUTH LINKS Boosting Regional Trade IN BRIEF The ITC Boosting Regional Trade Programme supports political and economic entities to reduce costs related to trading regionally and helps businesses take advantage of the potential offered by regional markets. THE PROBLEM AND ITC SOLUTION Regional economic integration ranks high on the agenda of parallel trading blocs with overlapping membership of governments because it offers larger markets, greater adds complexity and additional costs for business. economies of scale and increased competition for small On the supply side, the production capacities and and medium-sized enterprises (SMEs), giving them the exports are often similar in nature and include low-level opportunity to expand beyond small-scale domestic processing and value addition, limiting the possibility markets. A growing middle class in developing countries of countries complementing each other economically. creates new business opportunities, and the rise in Institutions are often weak at national level and can supply chains creates new avenues for developing provide limited impetus for boosting cross-border countries to integrate into regional production systems. integration. Still, the level of trade integration remains below its The strength of ITC’s strategy is to synchronize potential in most regions. The share of intra-African interventions in three areas with a view to stimulating trade accounted for just 14% of total African exports in private sector leadership in regional integration. These 2013. Intra-Arab regional trade remains very low with an areas are: estimated maximum share of 10%. Asia and the Americas are economically more integrated, with intra-regional Promoting business advocacy of a regional integration trade reaching 20% and 55%, respectively, in 2013.
    [Show full text]
  • Optimal Integration in the Single Market: a Synoptic Review
    Error! No text of specified style in document. Optimal Integration in the Single Market: A Synoptic Review A Europe Economics report for BIS April 2013 - 1 - Europe Economics is registered in England No. 3477100. Registered offices at Chancery House, 53-64 Chancery Lane, London WC2A 1QU. Whilst every effort has been made to ensure the accuracy of the information/material contained in this report, Europe Economics assumes no responsibility for and gives no guarantees, undertakings or warranties concerning the accuracy, completeness or up to date nature of the information/analysis provided in the report and does not accept any liability whatsoever arising from any errors or omissions © Europe Economics. All rights reserved. Except for the quotation of short passages for the purpose of criticism or review, no part may be used or reproduced without permission. Contents Summary .................................................................................................................................................................................... 0 1 Introduction .................................................................................................................................................................... 7 2 What is the Single Market and what Policies are used to Create and Sustain it? ......................................... 8 2.1 Trade and comparative advantage .................................................................................................................... 8 2.2 Barriers to trade ..................................................................................................................................................
    [Show full text]
  • Protectionism and International Diplomacy
    STUDY Requested by the AFET and INTA Committees Protectionism and international diplomacy Policy Department for External Relations Directorate General for External Policies of the Union PE 603.874 - June 2018 EN DIRECTORATE-GENERAL FOR EXTERNAL POLICIES POLICY DEPARTMENT STUDY Protectionism and international diplomacy ABSTRACT Just three decades after the fall of the Berlin Wall signifying the end of Cold War aggression and the ascendancy of international liberalism, the world faces even greater uncertainty. In every region of the world, geopolitical shifts are taking place that have brought offensive trade agendas to the fore. The US has withdrawn from underwriting the post-World War Two international economic and foreign policy architecture, instead proposing to build a wall between itself and neighbouring Mexico, imposing unilateral tariff increases while refusing to negotiate new international agreements. In Europe, the project of ever greater integration has been attacked by Brexit, as well as other populist sentiment against the perceived power of EU institutions and the forces of globalisation. The breakdown of the western coalition advocating global governance has left a power vacuum that other key players such as China are forced to respond to. These current tectonic shifts in power and foreign policy positions impact on every country and every individual in the early 21st century. While many governments strive to maintain international cooperation and further integration, it is an unpredictable era. For trade policy has established itself firmly within the arena of high foreign diplomacy and as a result, traditional assumptions and adherence to international norms can no longer be assumed in such a state of political and economic flux.
    [Show full text]