Regionalism, Multilateralism, and the Politics of Global Trade Canada and International Relations Kim Nossal and Brian Job, General Editors David G Haglund, ed., The New Geopolitics of Minerals: Canada and International Resource Trade Donald McRae and Gordon Munro, eds., Canadian Oceans Policy: National Strategies and the New Law of the Sea Theodore H Cohn, The International Politics of Agricultural Trade: Canadian-American Relations in a Global Agricultural Context Russell S Uhler, ed.; Canada-United States Trade in Forest Products A Claire Cutler and Mark W Zacher, eds., Canadian Foreign Policy and International Economic Regimes Andrew F Cooper, Richard A Higgott, and Kim Richard Nossal, Relocating Middle Powers: Australia and Canada in a Changing World Order Lawrence T Woods, Asia-Pacific Diplomacy: Nongovernmental Organizations and International Relations James Rochlin, Discovering the Americas: The Evolution of Canadian Foreign Policy Towards Latin America Michael Hart, with Bill Dymond and Colin Robertson, Decision at Midnight: Inside the Canada-US Free-Trade Negotiations 10 Amitav Acharya and Richard Stubbs, eds., New Challenges for ASEAN: Emerging Policy Issues 11 Donald Barry and Ronald C Keith, eds., Regionalism, Multilateralism, and the Politics of Global Trade Edited by Donald Barry and Ronald C Keith Regionalism, Multilateralism, and the Politics of Global Trade UBCPress • Vancouver • Toronto © UBC Press 1999 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without prior written permission of the publisher, or, in Canada, in the case of photocopying or other reprographic copying, a licence from CANCOPY (Canadian Copyright Licensing Agency), 900 - Adelaide Street East, Toronto, ON M5C 1H6 Printed in Canada on acid-free paper °° ISBN 0-7748-0751-2 (hardcover) ISBN 0-7748-0752-0 (paperback) Canadian Cataloguing in Publication Data Main entry under title: Regionalism, multilateralism, and the politics of global trade (Canada and international relations, ISSN 0847-0510; 11) Includes bibliographical references and index ISBN 0-7748-0751-2 (bound); ISBN 0-7748-0752-0 (pbk.) International economic relations Regionalism Trade blocs Canada - Foreign economic relations Canada - Commercial policy I Barry, Donald, 1947- II Keith, Ronald C III Series HF 1379.R43 1999 337.1 C99-910999-5 UBC Press acknowledges the financial support of the Government of Canada through the Book Publishing Industry Development Program (BPIDP) for our publishing activities Canada We also gratefully acknowledge the ongoing support to our publishing program from the Canada Council for the Arts and the British Columbia Arts Council Set in Stone by Brenda and Neil West, BN Typographies West Printed and bound in Canada by Friesens Copy editor: Maureen Nicholson Proofreader: Joanne Richardson UBC Press University of British Columbia 6344 Memorial Road Vancouver, BC V6T 1Z2 (604) 822-5959 Fax: 1-800-668-0821 E-mail: info@ubcpress.ubc.ca www.ubcpress.ubc.ca For Jennifer and Andrew and Leia and Amy This page intentionally left blank Contents Preface / i x Rt Hon Joe Clark Acknowledgments / xv Acronyms / xvi Introduction: Changing Perspectives on Regionalism and Multilateralism / Donald Barry and Ronald C Keith Part 1: Regionalism, Globalism, and the State A Matter of Synergy: The Role of Regional Agreements in the Multilateral Trading Order / 25 Michael Hart Regionalism and the Evolving Global Trade System / 54 Gilbert R Winham Globalization, Regionalism, and the Analysis of Domestic Public Policy/71 William D Coleman and Anthony Perl Part 2: Dynamics of Regional Integration The European Union as a Regional System / 95 Charles C Pentland viii Contents The Dynamics of Integration in the Americas: A Look at the Political Economy of NAFTA Expansion /112 Robert K McCleery APEC's Evolving Trade Structure / 139 Steve Chan Part 3: Interregional Relations The European Union and the United States: A New Balance of Influence in the Global Political Economy /157 Carolyn Rhodes North American-Asian Relations, Asian Regionalism, and the Future of Asia Pacific Regionalism / I S O Charles E Morrison ASEM: Toward the Institutionalization of the East Asia-Europe Relationship? / 194 Richard Higgott Part 4: Whither Canada? 10 Thinking Globally, Acting Regionally: Assessing Canada's Response to Regionalism / 213 Tom Keating 11 The Pursuit of Economic Architecture by Diplomatic Means: The Case of Canada in Europe / 228 Denis Stairs 12 Playing by the "Rules"? Canada's APEC Policy / 253 Ronald C Keith and Patricia L Maclachlan Part 5: Summing Up 13 A World of Regions or a Single Trade Order? / 277 Charles F, Doran Contributors / 293 Index / 296 Preface Rt Hon Joe Clark, PC CC I learned about Canada's international relations on the job and as a politician, not as an academic or as a diplomat I tried to apply internationally what I had learned about Canada at home That is the spirit in which I accepted the invitation to write the preface for Regionalism, Multilateralism, and the Politics of Global Trade The case I shall try to make is that the issues discussed in this book depend as much on diplomatic and political factors as they on trade and economics Nations' ideas about themselves are important One of Canada's basic dilemmas is that Canadians lack the compelling national myths that hold together countries like the United States, the United Kingdom, and France These myths let other countries embrace confidently differences at home, or enter confidently into multinational arrangements, without fear of losing their identity A stronger sense of Canada's role in the world would also fortify our sense of identity and purpose at home The subject of this book interests me, both because it refers to cooperation, which calls on the skills that, traditionally, have been a Canadian trademark, at home and internationally, and because we have seen ourselves as a link between North America and Europe, on the one hand, and between North America and Asia, on the other An important part of our role in NATO, and in the Conference on Security and Cooperation in Europe, was to keep cool through recurring contests between Washington and European capitals, and to remind them of our common purposes and heritage In Asia, we have been able to take large initiatives, like the formal recognition of the People's Republic of China, and more modest ones, like the North Pacific Security Dialogue, which contributed to a sense of community, not conflict, across the Pacific Indeed, the decision to finally assume our full responsibilities in the Organization of American States reflected a view that we could also bridge differences in our own hemisphere The Canadian government in which I served as foreign minister was 288 Charles F Doran norms takes place, the narrower applications are erased, or they become redundant But without the regional applications, the global ones would not have been implemented Initially necessary, but not durable, the regional applications disappear Hence, the very novelty of the regional reforms becomes their own undoing when the reforms are adopted globally Regionalism liquidates itself by its own openness and vulnerability to more global application of the same techniques Thus regionalism, at least outside the EU, ought to be regarded as provisional or conditional and as subject to cancellation at the global level Whether the members of preferential trade areas anticipate this dialectical process is doubtful They might not be so energetic in their innovation if the architecture of this accomplishment was immediately perceived to be so temporary Yet the relentlessness of the process is apparent to the historically minded policy analyst The only way this remorseless process of global predominance could falter is if the principal regional actors decide that new rounds of trade and investment liberalization are regarded as either unnecessary because some of the fruits have already been obtained at the regional level or too difficult because the task of launching a new global trade round is deemed too arduous politically As there is no way of preventing global strategists from "stealing" what their regional confreres have already accomplished, and no way short of protectionism of escaping the predominance of the global norms, the interplay between the global and the regional is likely to continue and, in continuing, to favour the global processes Regionalism or Multilateralism: Where Does the Future Lie? Essentially three possibilities exist regarding the future of trade and investment reform within the international system First, global trade reform may prevail with another series of trade talks modelled after the highly successful prior rounds In this scenario, reform becomes even more universal, with virtually all countries encompassed in the fold of generalized norms At the same time, the scope of reform will press on into such heretofore off-limits areas as competition policy, investment practices, non-tariff barriers, subsidy/antidumping legislation, fiscal coordination, and policy harmonization Global trade reform can establish separate levels of participation and separate speeds of implementation, building both on the European experience and on the results of the Uruguay Round Second, the pace of global trade reform could sag Regionalism could strengthen Preferential trade areas could begin to balkanize the system Most trade preferences and norms would reflect the regional bias of the members Without a vigorous round of trade negotiation at the systemic level, regional practices could become variable It is possible that competitive pressures could lead to an increased focus on reciprocity and a A World of Regions or a Single Trade Order? decreased emphasis on most favoured nation treatment Bilateral dependencies on the part of Third World states could become common with respect to one or more preferential trading areas Trade diversion would also tend to replace trade creation in many trading situations, with the flows of foreign investment succumbing to the same geometry Third, the international trade system could begin to look more like a melange Preferential trading areas might begin to vie with global trade initiatives for the support of state governments The trade areas would become the proving grounds for new reform ideas These ideas would then be taken up by the global trade system in a WTO-plus set of talks Some trade areas would disappear because of self-liquidating trends Other trading areas would become permanent features of the global trading system Unevenness of trade and investment rules would continue to plague business, second only in significance to the combined effects of flexible exchange rates and the probability of border risk But at the same time, for all its untidiness, the trading system would incrementally move toward greater openness In considering the likelihood of each of these scenarios, a number of factors must be considered Most problematic with the first scenario is that no single country or entity might be willing to take on the task of leading reform If the largest entity is that which traditionally must lead, then the European Union would qualify for that role But the European Union has many difficulties with the assumption of such leadership It is not internally unified in terms of interests and objectives It is not able to speak politically with one voice at a high enough level of effectiveness to ensure that other governments would take Brussels' concessions very seriously It is also somewhat ambivalent about the whole systems-level approach to trade and investment reform, despite wanting to share in the benefits of that reform Perhaps, in spite of the initial failure of "fast-track" authority on the matter of Chilean entry into NAFTA, the United States can muster enough political vigour and enthusiasm in both political parties to push on with a new round of global trade talks Important to this mission, however, is a healthy world economy, not one at the end of a long business cycle, staring real or potential recession in the face Perhaps, ideally, Europe, the United States, and Japan can together take the lead, sharing in the concessions and in the responsibilities at the outset But what is clear is that the bureaucracy of the WTO itself cannot take the lead in a new round of trade discussions independent of the full support of the principal governments Regionalism looks both like a Trojan Horse for global trade talks (at once participating in and subverting such talks) and like an alternative once they fail (or don't even get started) Yet regionalism alone is a rather bad option, with overtones of rivalry and balance that remind one more of the 289 290 Charles F Damn late nineteenth century than of the late twentieth century Strident regionalism would surely hollow out many of the international institutions that have been established with great effort over the last half century Moreover, in the end, the multinational corporation is not compatible with a regionalized world Not that the firm and the international marketplace can offset political forces backed by armies But firms have common interests in a commercial world that is balkanized as little as possible, or, at the least, that is not riven by deep political fissures of the type a highly regionalized world would present From this perspective, the mixed regionalized/globalized world looks much more likely than either of the pure alternatives The problem with such a world is to determine where economic and commercial authority will lie Who will predominate, for example, if the WTO and EU or NAFTA claims jurisdiction? Insofar as APEC remains a "talking shop," such regional entities will not harm and could help implement the reforms agreed to at another level of negotiation But the question still remains: In such a mixed system of preferential trade areas with all of their appendages, and a sprawling global reform effort under the WTO, where will the impetus come from for significant further trade and investment reform? A possible avenue for further initiative may be via regionalism rather than against it Regionalism could become a vehicle for the reform effort at the top of the system; that is, ideas may percolate upward to the global level Regions may also begin to negotiate with and integrate with each other For example, despite the inability of the United States in spring 1998 to arrange Chile's accession to NAFTA, together Chile and MERCOSUR might offer an interesting set of terms for NAFTA to consider The package would be large enough to bring together the support of powerful groups capable of winning sufficient gains to overcome the inevitable political opposition of other interest groups Likewise, the EU and NAFTA might be able to work together on a number of issues This in turn might accelerate the maturity, as negotiating mediums, of both ASEAN and APEC Seen from this viewpoint, regionalism does not look like a threat to global reform of the economy Instead, regionalism becomes an instrument in the larger objective of further global economic reform Individual studies cited in this book reveal the tensions and opportunities associated with trade and investment reform, whether carried out at the global or the regional level These studies suggest that universal trade liberalism and the regional route to reform are not really at odds Nor is the trading system at the advent of the twenty-first century running out of impetus for productive change Globalism and technological change together are lifting more economies out of poverty than at any other time in history Only an open trading and investment system can sustain such A World of Regions or a Single Trade Order? growth An "iron law" of contemporary international political economy is that economic growth via a liberal trade order, though in magnitude not guaranteed, is in trajectory a certitude Notes Jacob Viner, The Customs Union Issue (New York: Carnegie Endowment for International Peace, 1950) Jagdish Bhagwati as quoted in Gilbert Winham, "Regionalism and the Evolving Global Trade System," 55 Sylvia Ostry in Winham, 55 Michael Hart, "A Matter of Synergy: The Role of Regional Agreements in the Multilateral Trading Order," 33 G.N Yannopoulos, Customs Unions and Trade Conflicts (London: Routledge, 1988), 128 Gary Clyde Hufbauer, ed., Europe 1992: An American Perspective (Washington: Brookings Institution, 1990), 23 Robert K McCleery, "The Dynamics of Integration in the Americas: A Look at the Political Economy of NAFTA Expansion," 120 Peter C Newman, "MAI: A Time Bomb with a Very Short Fuse," Maclean's, March 1998, 51 Richard Higgott, "ASEM: Toward the Institutionalization of the East Asia-Europe Relationship?" 197 10 Higgott, "ASEM," 200 11 Charles E Morrison, "North American-Asian Relations, Asian Regionalism, and the Future of Asia Pacific Regionalism," 187 291 This page intentionally left blank Contributors Donald Barry is professor of political science at the University of Calgary His publications include Canada's Department of External Affairs: Coming of Age, 1946-1968, with John Hilliker (1995); and Toward a North American Community? Canada, the United States, and Mexico (1995) Steve Chan is professor of political science at the University of Colorado at Boulder Among his publications are Beyond the Developmental State: East Asia's Political Economies Reconsidered, with Cal Clark and Danny Lam (1997); Foreign Direct Investment in a Changing Global Economy (1995); and East Asian Dynamism: Managing Growth, Order, and Security in the Pacific Region (1993) William Coleman is professor of political science at McMaster University He has published Financial Services, Globalization, and Domestic Policy Change: A Comparison of North America and the European Union (1996); The State, Business and Industrial Change in Canada, with Michael M Atkinson (1989); and Business and Politics: A Study in Collective Action (1988) Charles F Doran is Andrew W Mellon Professor of International Relations at the Paul H Nitze School of Advanced International Studies, Johns Hopkins University His publications include A New North America, with Alvin Paul Drischler (1996); The NAFTA Puzzle: Political Parties and Trade in North America, with Gregory P Marchildon (1994); Systems in Crisis: New Imperatives of High Politics at Century's End (1991); and Forgotten Partnership: U.S.-Canada Relations Today (1984) Michael Hart is professor of international affairs in the Norman Paterson School of International Affairs and senior associate of the Centre for Trade and Policy and Law, Carleton University Among his publications are Multilateral Negotiations: Lessons from Arms Control, Trade and Environment, with Fen Hampson (1995); Also Present at the Creation: Dana Wilgress and the United Nations Conference on Trade and Employment at Havana (1995); and Decision at Midnight: Inside the Canada-US Free Trade Negotiations (1994) Richard Higgott is professor of international political economy and director of the Centre for the Study of Globalisation and Regionalisation at the University 294 Contributors of Warwick He has published Ideas, Policy Networks and International Policy Coordination in the Asia Pacific (1994); Relocating Middle Powers: Australia and Canada in the Evolving World Order, with Andrew F Cooper and Kim Richard Nossal (1993); and Pacific Economic Relations in the 1990s: Cooperation or Conflict? (1993) Tom Keating is professor of political science at the University of Alberta He has written Canada and World Order: The Multilateralist Tradition in Canadian Foreign Policy (1993); and Canada, NATO and the Bomb, with Larry Pratt (1988) Ronald C Keith is professor and head of the Department of Political Science at the University of Calgary His publications include Law and Justice in China's Market Place (forthcoming); China's Struggle for the Rule of Law (1994); The Diplomacy of Zhou Enlai (1989); and Energy, Security and Economic Development in East Asia (1986) Patricia L Maclachlan is assistant professor in the Department of Asian Studies, University of Texas at Austin She is the author of The Politics of Consumer Protection in Japan: The Impact of Consumer Organizations on Policy Making (forthcoming) Robert K McCleery is associate professor of economics at the Monterey Institute of International Studies His publications include South Asia as a Dynamic Power, with S.P Gupta and William James (1994); and Regional Integration and Its Impact on Developing Countries (1993) Charles E Morrison is president of the East-West Center Among his publications are Asia-Pacific Crossroads, with Vinod Aggarwal (1998); The Asia-Pacific Security Outlook: 1998 (1998); and The Pacific Islands: Politics, Economics and International Relations (1991), Charles C Pentland is professor of political studies at Queen's University He has published The Canada-European Communities Framework Agreement, with Hans Michelmann and Robert Boardman (1984); Issues in Global Politics, with R.G Boyd (1981); and International Theory and European Integration (1973) Anthony Perl is associate professor of political science at the University of Calgary His publications include The Politics of Improving Urban Air Quality, with Wyn Grant and Peter Knoepfel (1999) Carolyn Rhodes is professor of political science at Utah State University Among her publications are Pivotal Decisions: Select Cases in Twentieth Century International Politics (1999); The European Union and the World Community (1998); and Reciprocity, U.S Trade Policy and the GATT Regime (1993) Denis Stairs is McCulloch professor in the Department of Political Science, Dalhousie University He has written The Diplomacy of Constraint: Canada, the Korean War, and the United States (1974); and co-edited three books with Gilbert Contributors R Winham, Canada and the International Political/Economic Environment (1985); The Politics of Canada's Economic Relationship with the United States (1985); and Selected Problems in Formulating Foreign Economic Policy (1985) Gilbert R Winham is the Eric Dennis Memorial Professor of Government and Political Science at Dalhousie University His publications include The Evolution of International Trade Agreements (1992); Trading With Canada: The CanadaU.S Free Trade Agreement (1988); and International Trade and the Tokyo Round Negotiations (1986) 295 Index Advocacy coalitions, 87 Agreement on Technical Barriers to Trade (TBT), 174-5 Allen, David, 160 Andean Pact, 31, 50, 127 Anderson, Paul R, 61-2 Andrew, Arthur, 216 APEC See Asia Pacific Economic Cooperation Aristide, Jean-Bertrand, 221 ASEAN See Association of South East Asian Nations ASEM See Asia Europe Meetings Asia Europe Meetings (ASEMs): and APEC (see APEC: and ASEM); Asia Europe Business Forum, 197, 201; Asia Europe Foundation, 197, 201; Asian interests in, 200, 208; Bangkok Summit, 19, 197, 200, 202; economic dimension, 199-201; EU interests in, 200; and globalization, 195, 207, 208; history of, 16, 196-7; identity and membership, 198-9; and international relations, 207-9; as an interregional dialogue, 180, 191; London Summit, 206; prospects, 205-7; and regional security issues, 204-5; role of, 200-1; structure, 197; and the US, 201-5 Asia Pacific community, 181-5 Asia Pacific Economic Cooperation (APEC): and ASEM, 194-5, 206-7; and Asia, 255-6; and Asian approach, 2589; Asia Pacific intergovernmental forum, 14; and Australia, 161, 260; Bogor Declaration, 185, 186, 206, 257, 258; Business Advisory Council, 14; Canberra meeting, 14; and China (see China: and APEC); and consensus regionalism, 189; decision making in, 257-8, 281; deepening versus widening, 280-1; economic leaders meetings (ELMs), 185, 254, 258, 267, 268; economic structure, 124-5; economic and technical cooperation, 188; Eminent Persons Group (EPG), 186; and environment, 82; free trade in, 31, 72, 185; goals of, 4, 255-7; history of, 13-4, 185-6; Kuala Lumpur ELM, 270, 271; and Latin America, 124-5; Manila Action Plan (MAPA), 185; Manila summit, 259; and New Zealand, 261; and old regionalism, 14; and open regionalism, 13, 254-5, 257, 258, 285; opposition to NAFTA/EU models, 256-7; Osaka Action Agenda, 185, 224; Osaka summit, 258; and positive regionalism, 261, 268, 270, 271; program of, 256; prospects, 205-7, 270-2, 290; regional aspirations, 181; and regional free trade, 48; regional trade shares, 141-4, 152; role graduation in, 144-52; Seattle ELM, 14, 15; Second Eminent Person's report, 257; Senior Officials Meetings, 266, 267; Seoul ELM, 14; and soft regionalism, 259, 262, 263; structure, 223; tensions in, 187-9; Trade and Investment Liberalization agenda (TILA), 266, 269, 271; and Uruguay Round, 186; US interests in, 184-5, 187, 189; Vancouver ELM, 206, 254, 267-9, 271 See also Association of South East Asian Nations: and APEC; Canada: and APEC; United States: and APEC Asian financial crisis (1997-8), 78-9, 139, 188, 194, 199, 207, 253, 280 Index Association of South East Asian Nations (ASEAN), 31, 50, 183, 196, 198, 207, 264, 267, 283, 290; and APEC, 14; ASEAN Free Trade Area (AFTA), 5, 31, 54, 264, 267; ASEAN Regional Forum (ARF), 180, 181, 199, 205 Australia-New Zealand Closer Economic Relations Agreement (CER), 5, 7, 47, 50, 264 Axworthy, Lloyd, 267, 268 Baker, James, 188 Bank for International Settlements (BIS), 84, 87 Barlow, Maude, Basel Committee on Banking Supervision, 73 Bergsten, Fred, 5, 173, 186, 258 Bhagwati, Jagdish, 5-6, 55, 278 Blair, Tony, 246 Bobrow, Davis, 139, 141-2, 202-3 Boutros-Ghali, Boutros, 215 Brazil: regional trade leadership, 112, 115, 125-7, 134 Bretton Woods system, 38, 173; and NIEO, 37 Brezinski, Zbigniew, 202 Brittan, Leon, 169, 170-1 Bush, George, 13 Canada: and Asia Pacific, 142, 143, 1701, 183, 250; and globalization, 241, 247; and Haiti, 221-2; Individual Action Plan, 263; and NAFTA, 11-3, 30, 62, 67-8, 219, 222-3, 243, 285; and the OAS, 218, 219-22; Pacific 2000 strategy, 261; regionalism and multilateralism, 19-20, 216-9, 224-6, 282; response to regionalism, 213, 216, 219; team Canada trade missions, 183, 261; trade and human rights, 7, 267, 268; and US-EU relations 170-1, 172-3, 234, 243, 245; Year of Asia Pacific (CYAP), 265, 267 Canada and APEC: Canadian domestic politics, 270-1; Canadian interests in, 260, 268; Canadian policy toward, 253-4, 260-6; Department of Foreign Affairs and International Trade (DFAIT), 263; Impact of Population and Economic Activity on Food, Energy and the Environment (FEEEP), 254, 260, 266, 268; and Japan, 269, 271; regionalism and multilateralism, 219, 223-4, 271; Vancouver ELM and Canada's performance, 270 Canada-EC Contractual Link Agreement, 237-8, 242, 258; effects of, 238-9 Canada-EU: factors affecting relations, 246-9; Joint Political Declaration and Action Plan, 16, 243-6, 248; Transatlantic Declaration, 240-2, 244; turbot war, 243-4, 248 See also ECTI Canada and Europe: Atlanticist vision, 230, 247; and British application to EEC, 233; and economic nationalism, 234; and European integration, 231-3; and European security, 229; and NATO, 229, 230, 236; Third Option, 233-6, 239; and transatlantic economic linkages, 233, 236-7 Canada-US Free Trade Agreement (CUSFTA): Canadian interests in, 12, 239-40; Chapter 18, 67; Chapter 19, 67; compliance with GATT Article XXIV, 57; dispute settlement, 66-7; goals of, 12; history of, 62-3; and NAFTA, 12-3; provisions, 12; and regionalism, 219 Canada-US relations, 234-5, 236, 241, 260, 264 See also CUSFTA; NAFTA CAP See Common Agricultural Policy Caribbean Common Market (CARICOM), 31 Central American Common Market (CACM), 31, 50 Central and Eastern European Countries (CEEC): relations with EU, 157, 164-5; security, 159 CER See Australia-New Zealand Closer Economic Relations Agreement CFSP See Common Foreign and Security Policy Chan, Raymond, 219, 262, 264 Chan, Steve, 139, 141-2 China: and APEC, 185-6, 257, 258-9; and Asia Pacific, 143; and Asian regionalism, 190-1; and shared US security concerns, 182-3 Chretien, Jean, 243, 245, 261, 267, 268, 269, 271 Churchill, Winston, 218 Civil society: and Asia, 207; and globalization, 7, Clark, Joe, 220 Clarke, Tony, Clinton, Bill, 15-6, 112, 172, 186, 246, 258; and fast-track negotiating authority, 5, 15; and NAFTA, 13; and Uruguay Round, 15 Common Agricultural Policy (CAP) (EU), 297 298 Index 10, 97, 99, 100, 279; and Uruguay Round, 15, 59, 60 Common Foreign and Security Policy (CFSP) (EU), 11, 108, 159, 280; history of, 100-4 Commonwealth of Nations, 221, 226 Conference on Security and Cooperation in Europe (CSCE), 220, 221 Conway, Tom, 81 Cooper, Andrew, 222, 223, 225 Cooperation Framework Agreement: EC and ASEAN, 196 Council for Mutual Economic Assistance (CMEA), 95 Countervailing power, 39 Cox, Robert, 74-5, 78 CUSFTA See Canada-US Free Trade Agreement Daudelin, Jean, 222 Dayton Peace Accords, 159 de Gaulle, Charles, 233 Delors, Jacques, 84, 106 Democratic theory, 88 Democratization: and Asia Pacific, 140; and CEEC, 164; and Latin America, 112, 132 Dependency theory, 18, 144, 152; dependentistas, 149, 150 d'Estaing, Valery Giscard, 100 Deutsch, Karl, 95 Dickinson, Hugh H., 61-2 Diefenbaker, John, 233 East Asian Economic Caucus (EAEC), 188-9, 190, 199 EC See European Community Economic Community of West African States (ECOWAS), 54 Economic and Monetary Union (EMU) (EU), 158, 161, 173, 180, 277; Delors plan, 98; history of, 97-100; versus the dollar, 279-80; Werner plan, 98 Eggleton, Art, 267 Embedded liberal order, 76 EMU See Economic and Monetary Union Epistemic communities, 80 EU See European Union EU-Canada Trade Initiative (ECTI), 16, 171, 246 EU-Mexico free trade negotiation, 16 European Atomic Energy Community (Euratom), 10, 231 European Bank for Reconstruction and Development, 164 European Coal and Steel Community (ECSC), 97, 231; and Canada, 232; membership and goals of, 10 European Commission (EU): Agenda 2000, 165; and Canada, 237, 242, 2434; and CFSP, 101, 104; Directorate General II (DC II), 84; Directorate General XII (DG XII), 80; and EMU, 99; and justice and home affairs, 106 European Community (EC): Davignon Committee, 101-2; European Political Cooperation (EPC), 101-2, 242; Exchange Rate Mechanism (F.RM), 77-8, 84, 98; Single European Market (SEM), 96, 97-8, 196; structure of, 10-1; and TBT, 174-5 European Court of Justice (ECJ), 101; Cassis de Dijon case, 174 European Defence Community (EDC), 101, 231 European Economic Community (EEC), 10, 26, 97, 231; British membership, 233 European Free Trade Association (EFTA), 26, 95; goals, 10-1 European integration: history of, 95-7, 231 European Investment Bank, 164 European Police Office (Europol), 105 European Union (EU): banana import regime, 172; and Canada relations (see Canada-EU); Common Commercial Policy, 101; "Community Method," 99, 108; Coreu, 102; and deep integration, 51, 54; deepening versus widening, 280-1; democratic deficit, 106; European Monetary Institute, 84; European Monetary System (EMS), 84, 98, 100; expansion of, 15, 157; and federalism, 101, 102, 105, 106, 107; and GATT/WTO, 167, 168-9; history of, 10-1, 95-7; hormone-treated beef, 172; as a hybrid political form, 17, 107; influence of, 158-9; Intergovernmental Conferences, 98, 102; and intergovernmentalism, 96, 99, 101, 103, 108; Lome convention, 47; monetary and fiscal policy, 77-8 (see also EMU); and multi-level governance, 17, 83-4, 100, 107; and neofunctionalism, 96, 99, 101, 103, 108; and new regionalism, 30, 31; objectives of, 4; Partnership Cooperation Agreement (EURussia), 166; Poland and Hungary: Aid for Economic Restructuring (PHARE), 164; regional development policy, 80; and Russia/CIS relations, 165-7; Index Schengen Agreement, 105; and structural impediments, 45; subsidiarity, 200, 208; and US relations (see US-EU relations) See also CAP; CFSP; EMU; Justice and Home Affairs Evans, Peter, Fast-track negotiating authority, 5, 15, 66, 115, 135n, 190, 281, 289 Foreign direct investment, 29 Frankel, Jeffrey, 142 Free Trade Agreement of the Americas (FTAA), 6, 16, 17, 31, 47, 50, 66, 124; and the US, 112, 115, 119 Calbraith, John Kenneth, 39, 50 Gallant, Nicole, 255 GATT See General Agreement on Tariffs and Trade General Agreement on Tariffs and Trade (GATT): Article XXIV, 26, 27, 48, 49, 57; functions, 9; and globalization, 35, 36; history of, 8-9, 55; and Mexico, 12-3; reform of, 14-6, 31-2; and regionalism, 214; rules respecting tariffs and quantitative restrictions, 40-1 See also Kennedy Round; Tokyo Round; Uruguay Round General Agreement on Trade and Services (GATS): Article V, 48, 49 Global trade reform: and the EU, 289; future of, 288-91; and Japan, 289; and the US, 289; and the WTO, 289 Globalization: defined, 3, 61-2, 71; and multilateralism, 68; and policy communities, 82-3; and regionalism, 29, 68, 282, 287-8, 290-1; and sovereignty, 283; and the state, 6-8, 16, 35-6, 71-3, 87-9, 106-7, 277; and trade liberalization, 70n; and Uruguay Round, 60 Goh Chok Tong, 196 Gore, Al, 256 Governance, 36, 87-9, 107 Graham, Edward, 40 Graham, John, 220 Group of (G-7), 86, 266, 284 Haas, Ernst, 95 Haas, Peter, 80 Hart, Jeffrey, 9, 15 Harvey, David, 71 Hashimoto, Ryutaro, 191 Hawke, Bob, 183 Hegemony, 29, 229, 248, 253; American, 29, 38, 240, 258, 260, 283 Held, David, 88 Helms-Burton Act, 65, 158, 171-2, 203 Henning, Randall, 77 Henrickson, Alan, 215 Herrberg, Antje, 165 Higgott, Richard, 75, 214 Hirschman, Albert O., 18, 121, 144-8 Hirst, Paul, 73 Hoffman, Stanley, 99 Hosli, Madeleine, 173 Hub-and-spoke model, 13, 222, 285 Hufbauer, Gary, 278-9 Hurrell, Andrew, 214, 219, 221 Hybrid political form, 17, 107 Ibraham, Anwar, 271 Import-substituting industrialization (ISI): and Latin America, 113-4 Integration: deep, 30, 51; shallow, 51 International contestability of markets, 36-7, 40, 41 International Monetary Fund (IMF), 35, 36, 79, 87; and Asia, 205-6, 268, 269 International regimes: influence of EU norms on, 173-6 International Trade Organization, 8, 76 Internationalization: defined, 17; and environmental policy, 82; and the state, 74-5; and Uruguay Round, 60 Interregionalism: Asia-Europe (see ASEM); and balance of economic power, 5, 170, 172-3, 194, 203-4, 2834; and global trade liberalization, 4; patterns, 3-4, 19 Iran-Libya Security Act, 158, 171-2 Japan: and APEC, 18, 257, 258, 259, 269, 271; and Asia Pacific, 140, 141-4, 152; and Asian regionalism, 190-1; and North America, 182; and Partners for Progress Fund, 188; and Trade Liberalization and Facilitation Special Fund (TILF), 188 Justice and Home Affairs (EU), 11, 1047, 280 Kennedy Round (GATT), 27, 60, 101 Kikuchi, Tsutomu, 259 Kilgour, David, 219 Kirchner, Emil, 164 Kirton, John, 266 Klima, Vicktor, 245 Kohl, Helmut, 98 Komlofske, Gerald, 61-2 Lambert, James M., 264 Latin America: and Brazil, 115, 127; and 299 300 Index Canada, 136n; costs and benefits of regional integration, 115-20, 133; future integration options, 123-31, 132-3; Latin American Integration Association (LAIA), 115; regional integration in, 113-4; and the US, 114-5, 118, 119, 120, 127, 131-2, 134 Leifer, Michael, 202 Less Developed Countries (LDCs), 37 Maastricht Treaty See Treaty on European Union Macdonald Commission See Royal Commission on the Economic Union and Development Prospects for Canada MacLaren, Roy, 6, 222, 224, 261-2 Macmillan, Harold, 233 Macroeconomic policy: defined, 76 Mansfield, Edward, 214 Marchi, Sergio, 224, 246, 269, 271 Market power, 41 Marshall Plan, 231 MERCOSUR See Southern Cone Common Market Mexico: and Chile, 31, 50; ejido system; and NAFTA, 11-3, 30, 46, 62, 67-8, 121-3; peso crisis, 115, 117 See also NAFTA Milner, Helen, 214 Mohamad, Mahathir, 188, 189, 199, 255, 271 Most favoured nation (MFN) principle, 8, 41, 43, 44, 49, 51, 57, 68, 187, 237, 255, 258, 262, 281, 286 Mulroney, Brian, 12, 68, 240, 261 Multi-Fibre Arrangement (MFA), 55, 59 Multilateral Agreement on Investment (MAI), 7, 277, 282 Multilateralism: defined, 3; force of, 68; and multi-tier trading system (see Multi-tier trading system) See also Globalization: and multilateralism; Regionalism: and multilateralism Multi-level governance (MLG), 17, 83-4, 100, 107 Multinational corporations, 7; and globalization, 65, 290 Multi-tier trading system, 16, 25, 4350, 51; highly integrationist EU model, 43; hybrid liberalization model, 43; preferential liberalization model, 43 Mutual recognition, 44, 45; EU 174-5; US-EU Mutual Recognition Agreement (MRA), 168 NAFFA See North American Free Trade Agreement Nationalism: European, 105 NATO See North Atlantic Treaty Organization Neack, Laura, 216 New International Economic Order (NIEO): and Bretton Woods system, 37; defined, 37 Newly industrializing economies (NIEs): Asian, 142, 143, 144, 148, 149, 150, 151, 152 Newman, Peter C., 282 Nixon, Richard, 235 Non-Governmental Organizations (NGOs), 6, 81, 265, 268 Non-tariff barriers, 44, 57 North American Aerospace Defence Command (NORAD), 217 North American Free Trade Agreement (NAFTA): accession clause, 222; and APEC, 263; Chapter 19, 65-6, 66-7; Chapter 20, 67; and Chile, 124, 134; and common currency discussions, 78; compared to WTO, 57-9; compliance with GATT Article XXIV, 57; dispute settlement, 57, 58, 65-7, 287; and environment, 81, 82; and EU, 290; as an example of hybrid liberalization, 43; expansion into Latin America, 15, 17, 114-5, 124, 125, 290; Free Trade Commission, 66; goals, 4; history of, 11-3, 62-3; implementation, 65-7; and new regionalism, 28, 30, 31; North American Agreement on Environmental Cooperation (NAAEC), 81; North American Commission on Environmental Cooperation (NACE), 81; provisions, 13; regional costs and benefits, 120-3; and shallow integration, 50, 51; US interests in; weaknesses, 47; and WTO, 57-9 See also Canada: and NAFTA; Mexico: and NAFTA; United States: and NAFTA North Atlantic Treaty Organization (NATO), 10, 103, 157, 158-9, 163, 164, 180, 220, 244, 284; Article II, 230, 236; Bosnia Herzegovina, 159; role of, 247 See also Canada and Europe: and NATO; US-EU relations: and NATO Nossal, Kim Richard, 225 Nuttall, Simon, 197 Nye, Joseph, Obuchi, Keizo, 271 Organization for Economic Cooperation Index and Development (OECD), 7, 26, 34, 54-5, 61, 220, 277; and CEEC aid, 165; and environment, 80; investment codes, 40-1; and Russia and the CIS, 165 Organization of American States (OAS): unit for the promotion of democracy (UPD), 222 See also Canada: and the OAS Organization of Petroleum Exporting Countries (OPEC), 12 Ostry, Sylvia, 55, 175, 259, 278 Paernan, Hugo, 175 Pauly, Louis, 73, 78 Pearson, Lester B., 233 Perez, Carlotta, 34 Piening, Christopher, 166 Pina, Jorge, 195 Policy community, 82, 83, 84, 86, 87, 88, 89 Policy network, 82, 83, 84, 87, 88 Power: Asia Pacific, 140-1; hard, 140; soft, 140 Prestowitz, Clyde, 140 Putnam, Robert, 86 Randall, Stephen, 220 Reagan, Ronald, 12, 112 Region: defined, Regionalism: and APEC, 13-4 (see also APEC); and Asia, 190-2; characteristics of successful regional agreements, 4551; deepening versus widening, 280-2; defined, 3, 214; diversity of, 286-7; and Europe, 10-1, 26-7, 30, 286, 288 (see also EC; EU); European model, 45, 259; exclusion versus innovation, 284-5; and globalization, 68; institutions, 215-6; and internal dynamics, 4-5; and multilateralism, 6, 16-7, 34, 68-9, 194, 215-6, 277, 281, 289-90; and NAFTA, 11-3, 30 (see also NAFTA); new, 3, 4-5, 28-31, 96, 98; North American model, 259; old, 3, 98; open, 55, 181, 187-8, 189, 190, 207, 254-5, 263; predatory bilateralism, 285-6; prospects, 288, 290-1; rise of, 214-5; self-liquidating, 287-8; soft, 259; trade creation versus trade diversion, 278-9 Regionalization, 29; and Asia, 198 Regulatory barriers, 44 Reich, Simon, 73, 139, 141-2 Research and development (R&D), 61 Robertson, Norman, 218, 226 Robinson, Sherman, 121 Ross, Douglas, 261 Royal Commission on the Economic Union and Development Prospects for Canada (Macdonald Commission), 68, 239 Rudner, Martin, 83 Ruggerio, Renato, Sabatier, Paul, 87 Santer, Jacques, 245, 246 Santiago Commitment to Democracy and the Renewal of the International System, 220-1, 226 Sbragia, Alberta, 162 Schmidt, Helmut, 100 Schuman Plan, 97 Segal, Gerald, 200, 204, 208 Senate Standing Committee on Foreign Affairs (Canada): final report, 270; interim report on Canada's role in Asia Pacific, 265-6 Shin, Dong-Ik, 204 Single European Act (SEA), 11, 54, 72, 100, 174, 231 Smith, Andy, 80 Smith, Michael, 160 Sopie, Noordin, 202 South American Free Trade Agreement (SAFTA), 17, 112, 134 South Asian Agreement on Regional Cooperation (SAARC), 31, 50, 54 Southern Cone Common Market (MERCOSUR), 17, 31, 47, 50, 54, 112, 115; and Chile, 115 Sovereignty, 71, 95, 257, 277; and regionalism, 282-3; territorial, 75-6 Sperling, James, 164 Spero, Joan, 9, 15 State: and effects of techno-economic paradigm shift, 35; and environmental policy, 79-82; and EU state-building, 104, 105, 107, 109, 160, 281; and human rights, 7; internationalization of, 17, 74-5; and macroeconomic policy, 76-9; and regionalism and multilateralism, 282-3 See also Globalization: and the state Stewart, Christine, 219 Structural impediments to international exchanges, 45 Stubbs, Richard, 255 Suharto, 186, 258 Summit of the Americas, 16 Sustainable development, 80, 81-2 Sustainable diplomacy, 81-2 301 302 Index Taiwan Straits Crisis, 181 Takashi, Sadahiro, 202 Technical assistance program (TACIS): EU to Commonwealth of Independent States (CIS) and Russia, 165-7 Techno-economic paradigm shift, 34-7; defined, 34 Thompson, Grahame, 73 Tokyo Round (GATT), 27, 56, 57, 60, 174 Toner, Glenn, 81 Trade diversion, 27, 49, 55, 68, 119, 277; and the EU, 279; versus trade creation, 278-9, 289 Transatlantic Business Dialogue (TABD): 158, 163, 168 Transnationalization, 73 Transversal coordination, 80, 82 Treaty of Amsterdam (EU), 106, 160 Treaty of Montevideo, 27, 115 Treaty of Rome (EEC, Euratom), 10, 97, 98 Treaty on European Union, (TEU): and CFSP, 103, 159; and EMU, 98; goals, 11, 54, 72, 84, 97; and Justice and Home Affairs, 106 Triple play, 15, 187, 197, 203-4 Trudeau, Pierre, 12 Two-level game, 86, 207 United Nations (UN): Agenda 21, 80; Chapter VII, 218; Chapter VIII, 215; and environment, 80; and regionalism, 214-5, 216; UN Commission for Sustainable Development, 80; UN Conference on Environment and Development (Earth Summit), 80 United States: and APEC, 14, 18, 184-5, 186, 255-6; and Asia Pacific, 140, 1413, 150, 152, 182-5; and Canada (see Canada-US relations); and creation of liberal economic trading order, 8; and Latin American integration, 114-5; and NAFTA, 11-3, 30, 62-3, 65, 131-2; and Nixon surcharge, 235 Uruguay Round (GATT), 14-6, 29, 37-8, 46, 54, 55, 58-61, 64, 73, 114, 169; agenda, 32; and APEC, 270; implementation of, 63-5; improvements to WTO regime, 33, 55-7; problems, 5960; provisions, 15; single undertaking, 56-7; US goals for, 59 US-EU relations: agreement on the liberalization of telecommunications, 169; disputes, 169-70, 171-3; economic bipolarity, 280; economic relations, 160-1, 162, 167-76, 245-6; and FDI, 162; global context, 163; interdependence, 161-3; and MFN exemptions, 169-70; and NATO, 159-60; Transatlantic Agenda and Action Plan, 16, 167-8, 243; Transatlantic Declaration, 167; Transatlantic Economic Partnership (TEP), 16, 168, 246; US-EC, 15; US-EU, 16, 18, 62-3, 103, 157, 158 US-Israel Free Trade Agreement, 34 US Trade Act, 171 van den Broek, Hans, 166 van Waarden, Frans, 82 Wanandi, Jusuf, 198 Watanabe, Akio, 259 Waters, Malcolm, 71 Webb, Michael, 76, 77 Western European Union (WEU), 102, 103, 159 World Bank, 80, 84 World Commission on Environment and Development (Brundtland Commission), 80 World Trade Organization (WTO), 3, 16, 33, 36, 42, 46, 50, 54, 116, 158, 16971, 246; and APEC, 259, 261-2, 264, 271; creation of, 56; dispute settlement, 56-7, 64-5, 175-6, 287; Dispute Settlement Understanding (DSU), 56-7; and EU banana import regime, 172; evaluation of, 63-7; Financial Services Agreement, 169; hormone-treated beef dispute, 172; implementation of, 63-5; Information Technology Agreement, 187; memberships, 41; and NAFTA, 57-9; and regionalism, 6, 25; TRIPS, 42, 175 Wrong, Hume, 217, 226 WTO See World Trade Organization Yannopoulos, G.N., 278 Yeltsin, Boris, 160 Zemin, Jiang, 258 ... and the Netherlands The purpose of the ECSC was to coordinate the production and use of coal and steel in those countries The four institutions of the ECSC (the High Authority, the Council of. .. is the result of the inexorable logic of economic globalization While the critics of globalization have often focused on how it is eroding the internal democratic processes of the state and the. .. response of governments to the changing patterns of international trade and investment The remainder of this introduction, therefore, highlights the evolution of the multilateral trade system and the