Globalization, regionalism and the regulation of securities markets1
William D. ColemanandGeoffrey R.D. Underhill
The complexities of the relationship between the growing number of regional economic agreements and associations, including European integration, and the process of global economic integration are not yet well understood in international political economy. Global markets, regional integration patterns and individual states are bound up in an intricate web of interrelationships which require painstaking analysis to unravel. As the EU is largely driven by political will, and is the most institutionalized and advanced among regional integration processes in the global economy, so it is in relation to Europe that this puzzle presents itself most persistently. ‘Can regional patterns of market integration be looked at as a step down the road toward the increasing globalization of the international political economy, or is a world of closed economic blocs emerging?’ (Stubbs and Underhill 1994:331).
Differing conceptions of European integration, from ‘Fortress Europe’ to a liberal market model fully integrated with the global economy, would appear to provide distinct answers to this question. The fortress model is often coupled with ideas of resurgent economic nationalism in an era characterized by declining American willingness and capacity to underpin a liberal international economic order (Gilpin 1987). The ‘Triad’ economies of Europe, Japan and the US are conceived as being involved in increasingly ‘head-to-head’ economic competition (Thurow 1993). Other literature (Busch and Milner 1994; Milner 1988) argues that the rise of economic nationalism, whether through regional organizations or traditional nation-states, is an unlikely outcome. In examining the policy options of states and the preferences of economic actors and their representative associations, these authors postulate that regional economic associations or integration processes such as the EU, North American Free Trade Agreement (NAFTA), or Asia-Pacific Economic Co-operation forum (APEC) are compatible with globalization (Busch and Milner 1994). Indeed, they cannot be well understand without considering globalizing factors. Through FDI and other financial flows, trade, and the production strategies of firms, there are important and developing inter-regional linkages among the major regional integration processes.