Redrawing the Global Economy

Transcription

1 Redrawing the Global Economy

2 Also by Alice Landau BARGAINING ON POWER, BARGAINING ON POLICY: The CAP Reform and the Negotiations on Agriculture in the Uruguay Round CONFLITS ET COOPERATION DANS LES RELATIONS ECONOMIQUES INTERNATIONALES: L Uruguay Round RETHINKING THE EUROPEAN UNION: Institutions, Interests and Identities (with Richard Whitman) THE ENLARGEMENT OF THE EUROPEAN UNION: Issues and Strategies (with Victoria Curzon-Price and Richard Whitman)

3 Redrawing the Global Economy Elements of Integration and Fragmentation Alice Landau Assistant Professor University of Geneva Switzerland

4 Alice Landau 2001 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 0LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted her right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act First published 2001 by PALGRAVE Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y Companies and representatives throughout the world PALGRAVE is the new global academic imprint of St. Martin s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN DOI / ISBN (ebook) This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Landau, Alice. Redrawing the global economy : elements of integration and fragmentation / Alice Landau. p. cm. Includes bibliographical references and index. 1. International economic integration. 2. Regional economics. 3. Globalization. I. Title. HF L dc

5 For Lea, Herbert, Yaël and David Harris

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7 Contents List of Tables List of Graphs xi xiii 1 Portraying Integration and Fragmentation in the World Economy Today: an Introduction 1 The other face of Janus 1 Globalization and regionalization: new incarnation? 3 Integration and fragmentation: twin processes 4 States in a changing global context: stresses and challenges 6 New modes of regulation for new issues 7 The book ahead 7 Part I Globalization 2 Exploring Globalization 11 Globalization, free trade, and the WTO 11 Two currents of thought 13 The optimists 15 The pessimists 18 Regionalization instead of globalization 22 Governments, companies and trade policies 24 Summing up the globalization debate 27 Globalization and governance 29 The determinants of globalization 33 Globalization and technology 34 3 Assessing the Differentiated Character of States 39 Challenges to the state? 40 New patterns of governance 44 Bringing in international and transnational actors 45 The NGOs: newcomers in world affairs 46 International organizations and international regimes 52 Bringing power politics back in 56 vii

8 viii Contents The decay of the state capacities 57 The East Asian economies: from success to crisis 58 Africa: bleak prospects 61 Concluding remarks 65 4 The Stratification of Global Trade 66 Globalization and trade 67 Changing pattern of trade in developing countries 71 Shifting patterns of trade: services 76 Concluding remarks 77 5 The GATT/WTO: Instrumentalizing Globalization 79 The GATT: adapting to the transformations in the world economy 80 Devising new trade restrictions 82 The Uruguay Round of negotiations 84 The WTO: towards an open and liberal multilateral trading system 87 The WTO and developing countries: maintaining special and differential treatment or equalizing power? 95 The tasks ahead 100 Negotiating in conditions of asymmetry 102 Concluding remarks Foreign Direct Investment and the Global Economy: Why, How, and Where? 109 Explaining FDI 109 FDI: pros and cons 110 Developing countries and FDI: shifting pattern 112 Multiplying investment rulemaking 116 The OECD Multilateral Investment Agreement 121 The triadization of FDI 125 Developing countries and FDI: concentration and shifting pattern 129 Central and Eastern Europe: catching up 134 Concluding remarks 135

9 Contents ix 7 The Transnational Corporations: Channeling Disparities 137 Transnationals and national governments: maximizing their interests 138 Changing attitudes 139 Towards an international regime for monitoring TNCs? 141 TNCs as conduits for trade and investment 142 Retaining control over the assets 142 The uneven pattern of TNCs 144 TNCs and developing countries 147 Mergers and acquisitions: a strategy in its own right 148 Geographical distribution: transatlantic against Continental Europe 152 Industry composition 155 M&As and developing countries 157 Building strategic R&D in developing countries 158 Concluding remarks The Globalization of Capital 161 From the gold standard to Bretton Woods 162 The Bretton Woods agreement: a facsimile of the gold standard? 164 Towards financial globalization 166 The debt crisis 168 The international financial system today 171 Developing countries: unequal pattern of international finance 174 Agreement on financial services: effects on developing countries 181 Part II Regionalization in the Global Economy 9 Regionalization: Old Blends and New Incarnation 185 What is regionalization? 186 A triad? 189 Investigating the variance in regional arrangements 190

10 x Contents Scale of decision locus 191 Saliency of issue areas in the EU 195 External relations 199 Saliency of issue areas in NAFTA and ASEAN 199 The Index of Institutionalization in NAFTA and MERCOSUR Regional Integration Arrangements: Trading Blocs or Building Blocs? 215 What Viner s integration theory has to say 215 Intraregional and interregional trade 216 Assessing RIAs trade patterns 217 Assessing the results 224 Preferential arrangements and RIAs: Liberalization of services ahead of GATS 226 GATT, WTO and regional integration 227 GATS and RIAs 232 Concluding remarks Conclusion 237 The flavor of globalization 237 Creating new lines of division 238 Reorganizing the state 240 Uneven pattern of regionalization 242 Notes 245 Bibliography 250 Index 271

11 List of Tables 2.1 Globalization: two tendencies Concepts of globalization Selected peace keeping forces Countries with major armed conflicts Growth in the value of world merchandise trade by region ( ) Share of different regions in world manufacturing output since 1979 (percentage) Share of developing countries in world exports, 1982, 1987, Import penetration by developing countries of the OECD marked for selected groups of manufactured products, The GATT Negotiating Rounds Measures used to protect imports from 1979 to Main legal instruments negotiated in the Uruguay Round Overview of the state-of-play of WTO disputes (2000) Schedule for revisions of the Marrakesh Agreements Special dispositions for developing countries Clothing as a percentage by volume of products integrated in stages 1 and Structure of commitments by WTO Members Overview of the state-of-play of WTO disputes (as to February 2000) National regulatory changes, Largest Foreign Direct Investment in Hungary ($ in millions) Main Multilateral Agreements Differences between the MAI and the WTO US FDI inflows and outflows (1995) Geographical distribution of Japanese FDI ( and ) (billions of dollars and percentage) Changing distribution of FDI within the developing countries 132 xi

12 xii List of Tables 6.8 Percentage distribution of foreign investment stock in China and ASEAN-4 in List of the top 20 TNCs The world s top TNCs in terms of degree of transnationality Evolution of M&As since Cross-border M&A purchases, by region/economy, (millions of dollars) Mega-deals in Top 10 deals for Industry analysis Cross-border M&A sales, by region/economy of seller, ($ million) Illustrative cases of R&D centres and R&D ventures in India Derivatives trading, Gross long-term flows to developing countries: (in percentage) Emerging market bond issues (in $ million) Emerging equity market issues (in $ million) External financing for selected developing countries by major categories, Lending by BIS reporting banks to selected Asian economies by sector, end June Net private capital flows to developing countries, ($ billion) Main features of some selected RIAs The EU s progress towards EMU The Maquiladora system Exports within blocs Exports by blocs Patterns of EU trade, exports (in per cent) Patterns of EU trade, imports (in per cent) Percentage share of Mexican exports GATT and RIA principles 228

13 List of Graphs 4.1 Share of Asian NICs and other regions or countries in world trade in products of high-technology industries, Developed countries: FDI inflows (billions of dollars) Developed countries: FDI outflows (billions of dollars) Intra-EU and extra-eu FDI flows, Investment rates in different regions, FDI inflows by economy, 1998 (millions of dollars) FDI inflows to ten African countries, 1998 (millions of dollars) Share of different regions in total net inflow of FDI in developing countries, Distribution of international bank loans by borrower, NAFTA s Tariff Elimination Share of intra-eu trade in total trade, 1985 and United States exports (1996) MERCOSUR s exports MERCOSUR s imports Japan s imports 1997 (%) Japan s exports, 1997 (%) 225 xiii

14 List of Abbreviations ALADI APEC ASEAN BIRD BIT CET CFSP CITES COMESA COREPER CUFTA ECOSOC ECOWAS EMU EPU EPC FDI FTA GATS GATT IGO ITT LDC M&A MERCOSUR MFN MTN NAALC NAFTA NATO NGO NIC NIEO OECD Latin American Integration Association Asia-Pacific Economic Co-operation Association of East Asian States Bank of International Reconstruction and Development Bureau International du Tavail Common External Tariff Common Foreign and Security Policy Convention of International Trade in Endangered Species Common Market of Eastern and Southern Africa Committee of Permanent Representative Canada United States Free Trade Agreement Economic and Social Committee Economic Community of West African States European Monetary Union European Payment Union European Political Co-operation Foreign Direct Investment Free Trade Agreement General Agreement on Trade in Services General Agreement for Trade and Tariffs Inter-Governmental Organization International Telephone and Telecommunications Least Developed Countries Mergers and Acquisitions Mercado Commun do Cone Sul Most Favored Nation Clause Multilateral Trade Negotiation North American Labor Commision North American Free Trade Agreement North Atlantic Treaty Organization Non Governmental Organization New Industrialized Countries New International Economic Order Organization of Economic Co-operation and Development xiv

15 List of Abbreviations xv OSCE PCTD PEEC PREC RIA SACU SADC SAFTA SPS TBT TNC TRIPS UDEAC UNCED UNCTAD USTR VER WEU WIPO WTO Organization for Security and Co-operation in Europe Pacific Conference on Trade and Development Pacific Economic Co-operation Council Pacific Rim Economic Council Regional Integration Scheme South African Customs Union South African Development Community South African Free Trade Agreement Sanitary and Phytosanitary Measures Technical Barriers to Trade Transnational Corporation Trade-related Intellectual Property Rights Union Douanière des Etats de I Afrique Centrale United Nations Conference on Environment and Development United Nations Conference on Trade and Development United States Trade Representative Volontary Export Restraint West European Union World Intellectual Property Organization World Trade Organization