Ronald M. Madrigal 2010-0127

an approach to international trade, the monetary system, international disarmament and security, or the environment, based on the idea that if international cooperative regimes for the management of conflicts of interest are to be effective, they must represent a broad and sustainable consensus among the states of the international system and lends itself to issues where clear common interests in the international community are identifiable. a term in international relations that refers to multiple countries working in concert on a given issue.

One modern instance of multilateralism occurred in the nineteenth century in Europe after the end of the Napoleonic Wars, where the great powers met to redraw the map of Europe at the Congress of Vienna. The Concert of Europe, as it became known, was a group of great and lesser powers that would meet to resolve issues peacefully.

After the Second World War the victors, having drawn experience from the failure of the League of Nations, created the United Nations in 1945 with a structure intended to address the weaknesses of the previous body (League of Nations). UN had the active participation of the United States and the Soviet Union, the world's two greatest contemporary powers. Along with the political institutions of the UN the post-war years also saw the development of other multilateral organizations such as the General Agreement on Tariffs and Trade (GATT), the World bank and the World health Organizations.

Today there are several multilateral institutions of varying scope and subject matter. Many of these institutions were founded or are supported by the UN.

Multilateralism is much more complex and challenging. It involves a number of nations which makes reaching an agreement difficult. There may be no consensus; each nations have to dedicate to some degree, to make the best outcome for all.

Global multilateralism is presently being challenged, particularly with respect to trade, by emerging regional arrangements not incompatible with larger multilateral accords. Unliteral action and bilateral confrontation in trade and other negotiations as a result of frustration with the intricacies of consensusbuilding in a multilateral forum.

It refers to the expression of a common sense of identity and purpose combined with the creation and implementation of institutions that express a particular identity and shape collective action within a geographical region. The European Union can be classified as a result of regionalism. The idea that lies behind this increased regional identity is that as a region becomes more economically integrated, it will necessarily become politically integrated as well

Initiatives towards a closer regional integration date back to the 1880s. The first coherent regionalism initiatives took place during the 1950s and 1960s. During the late 1990s, a renewed interest in regionalism emerged and lead to the rapid emergence of a global system of regions with political and economic parameters.

It is quite difficult to define when the history of regionalism begins, since there is no single explanation that encompasses the origins and development of the regional idea. Criteria such as the desire by states to "make the best of their regional environment" are regarded by certain analyst as as elusive; they prefer to consider the history of regionalism in terms of the rise of modern institutions. If formal organization at the regional as opposed to the international level is to be the yardstick for the onset of regionalism, it is difficult to place its origins much before 1945.

Advocacy of international regionalism was rare in the period between World War I and World War II when the doctrine of collective security was dominant. What did emerge before World War II were a growing number of international public and private associations

an increasing number of influential people had already advocated "escape from a theoretical and ineffective universalism into practical and workable regionalism". The region as a unit of analysis became important not only in the Cold War context, but also as a result of the self-consciousness of regions themselves. Because of the subsequent demands by states that had already made heavy political investments in regional arrangements.

Economic unions and common markets distorted the logic of a universal division of labor, and that regional military planning was made both impossible and obsolete. On the other hand, the defenders of the pattern were invoking the necessities of the cold war. By the 1960s a number of important changes in international politics the easing of the intensity of the Cold War, the independence of new states that had been part of colonial empires, the successful initiation of the European integration experience gave rise to a new range of questions about regionalism.

One other principle the United States traditionally has followed in the trade arena is multilateralism. For many years, it was the basis for U.S. participation and leadership in successive rounds of international negotiations. However in recent years, the United States also has pursued regional and bilateral trade agreements, partly because narrower pacts are easier to negotiate and often can lay the groundwork for larger accords.

Geographic proximity has fostered vigorous trade between the United States, Canada and Mexico. As a result of NAFTA, the average Mexican tariff on American goods dropped from 10 percent to 1.68 percent, and the average U.S. tariff on Mexican goods fell from 4 percent to 0.46 percent. Of particular importance to Americans, the agreement included some protections for American owners of patents, copyrights, trademarks, and trade secrets; Americans in recent years have grown increasingly concerned about piracy and counterfeiting of U.S. products ranging from computer software and motion pictures to pharmaceutical and chemical products.

They seem to be contraditory, but often regional trade agreements can actually support the WTOs multilateral trading system. Regional agreements have allowed groups of countries to negotiate rules and commitments that go beyond what was possible at the time multilaterally. In turn, some of these rules have paved the way for agreement in the WTO. Services, intellectual property, environmental standards, investments and competition policies are all issues that were raised in regional negotiations and later developed into agreements or topics of discussion in the WTO.

The groupings that are important for the WTO are those that abolish or reduce barriers on trade within the group. The WTO agreements recognize that regional arrangements and closer economic integration can benefit countries. It also recognizes that under some circumstances regional trading arrangements could hurt the trade interests of other countries. Normally, setting up a customs union or free trade area would violate the WTOs principle of equal treatment for all trading partners (Most Favoured Nation). But GATTs Article 24 allows regional trading arrangements to be set up as a special exception, provided certain strict criteria are met.

In particular, the arrangements should help trade flow more freely among the countries in the group without barriers being raised on trade with the outside world. In other words, regional integration should complement the multilateral trading system and not threaten it.

The literature on regionalism versus multilateralism is growing as economists and political scientists grapple out what it means and, if it means different things to system. Are regional integration arrangements "building blocks or stumbling blocks," in Jagdish Bhagwati's phrase, or stepping stones toward multilateralism? economists worry about the ability of the World Trade Organization to maintain the GATT's unsteady yet distinct momentum toward liberalism, and as they contemplate the emergence of world-scale regional integration arrangements (the EU, NAFTA, FTAA APEC, and, possibly, TAFTA), the question has never more pressing.

Since we value multilateralism, we had better work out what it means and, if it means different things to different people, make sure to identify the sense in which we are using the term.

Sector-specific lobbies are a danger if regionalism is permitted because they tend to stop blocs from moving all the way to global free trade. In the presence of lobbies, trade diversion is good politics even if it is bad economics.

Regionalism's direct effect on multilateralism is important, but possibly more so is the indirect effect it has by changing the ways in which groups of countries interact and respond to shocks in the world economy. Regionalism, by allowing stronger internalization of the gains from trade liberalization, seems likely to facilitate freer trade when it is initially highly restricted.

The possibility of regionalism probably increases the risks of catastrophe in the trading system. The insurance incentives for joining regional arrangements and the existence of "shiftable externalities" both lead to such a conclusion. So too does the view that regionalism is a should be viewed as parables rather than sources of means to bring trade partners to the multilateral negotiating table because it is essentially coercive. Using regionalism for this purpose may have been an effective well as about the world we live in. Among the strategy, but it is also risky.