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Assignment on Political Economy

   

Added on  2020-03-16

14 Pages3387 Words56 Views
Running head: POLITICAL ECONOMYPOLITICAL ECONOMYName of the StudentName of the UniversityAuthors Note

1POLITICAL ECONOMYTable of ContentsIntroduction......................................................................................................................................3Weakness in the EU’s approach to economic regionalism that were exposed by the globalfinancial crisis and its aftermath......................................................................................................3Conclusion.....................................................................................................................................11References......................................................................................................................................12

2POLITICAL ECONOMYIntroductionThe objective of this study is to focus on the EU’s approach to economic regionalism thathave been exposed by global financial crisis and its aftermath. Economic regionalism refers toinstitutional arrangements that are designed to aid free flow of commodities as well as servicesand to organize international economic policies among the nations. It has viewed as an attempt inmanaging the constraints as well as opportunities that is basically formed by huge rise in foreigneconomic ties (Acharya and Amitav 2012). Few examples of economic regionalism include- freetrade, economic unions, customs unions etc. Different schemes of economic integration weremainly founded in Europe in that period of World War II. It mainly includes European Union,EFTA (European free trade association) and European communities. Weakness in the EU’s approach to economic regionalism that were exposed by the global financial crisis and its aftermathEconomic regionalism initiated in Western parts of Europe and extended to East Asia,North as well as Latin America and in other nations. Different types of economic regionalism aremainly differentiated by integration level in which the countries were involved (Gilpin andRobert 2016). One of the basic forms of economic regionalism is EFTA that facilitates inreducing customs duties among their members. The currency as well as economic Union mainlyintends in economic integration with the help of general economic policy and removal of tariff aswell as non-tariff barriers. Institutional integration level is one of the economic regionalismforms and is also known as tight regionalism (Beeson and Mark. 2014). One example of tightregionalism is European Union (EU) that has been evolved from free trade sector to customsunion. However, incorporation within EU helps in creating spillover effects in political as well as

3POLITICAL ECONOMYsocial arenas. In addition, another method that has been used for classifying economicregionalism forms is the method by which their non-members are treated. Non –members are notdiscriminated in case of open regionalism. The APEC and EU contain different institutionalarrangements, which facilitates in promoting open regionalism (Haastrup and Toni 2013).Similarly, closed regionalism inflicts protectionist measures for limiting non-members entrée tothe market of member states. There are few global factors that influence EU’s approach ineconomic regionalism includes- multilateralism evolution, statement of WTO rules andliberalization in global trade. In fact, these factors also complicate the foreign policy of EU.The modern theory on economic regionalism is solely based on inter-governmental aswell as inter-states cooperation on issues in trade. This cooperation refers to expression of vitalchanges that took place since 1990s. Firstly, they are the economic consensus expression thatpraises promotion of exports rather than substitution strategies. Developed as well as lessdeveloped nations shares the specific vision of economic policy (Lenz and Tobias 2012). Thisvision relies on the basic concept that economic activities that do not represent the way forsuccessful development. Secondly, the necessity expression aids in reducing the multilateralnegotiation complexity in liberalized trade. Negotiations among the regions help in reducingcomplexity through several problems and simplify agenda. Thirdly, this expression of need is topreserve cultural or social peculiarities that are generally perceived as homogenizing process ofglobalization. Economic regionalism has been basically featured by negative integrationstrategies. Regional authority is mainly used for reducing national barriers to trade. However,economic regions follow market supporting strategies and have splits its relations of governancebetween national polity as well as trans- national marketplace. In addition, the members of EU

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