03 April 2008

"Open" and "Closed" Regionalism Theories

(Apr. 3, 2008) The terms "Open" and "closed" regionalism refer to the degree in which regional blocks allow nonmember nations to access their markets. In this sense, an "open region" is one with few, if any, external trade restrictions while a "closed region" can be defined as one whose external trade policies seek to restrict commerce with nations outside the region.

Closed regionalism as practiced in Latin America grew out of the policy suggestions made by UN ECLAC/CEPAL school of dependency theory in the early 1960s. As discussed earlier, proponents of this policy argued that states should form regional alliances with a series of trade barriers against foreign products to foment regional industrialization and assure captive local markets for these manufactured goods. The failure of this system of integration to meet Latin America's economic goals became apparent during the 1980s and was further highlighted by the strong economic performance of developing Asian states who had favored the free "open" trade policies of the Washington Consensus.[1]

The counterpoint to closed regionalism, open regionalism, can be seen as a process through which nations hope to achieve greater insertion in international markets. Its practitioners try to harvest the most from regional cooperation while not limiting themselves in the type or number of other commercial partners they can pursue. Open regionalism blends earlier ideas of seeking strength through regional alliances with the more neoliberal model of global trade barrier elimination. This is also the trade policy endorsed by the presidents of South America who, in 2000, went on the record as saying that the union they envisioned would be an open region that would not try to limit the trade agreements independent nations choose to seek.[2]

By Nathan Gill - Southern Affairs

Painting by Hung Liu, The Trophy, 2001, oil on canvas

[1] Ortiz, Benjamín. Personal Interview. Quito 5 Feb. 2008 [2] Comunicado de Brasilia: Reunión de Presidentes de América del Sur. Brasilia 31 Aug. to 1 Sept. 2000 "En la línea de los principios del "regionalismo abierto", los Presidentes registraron la meta compartida de formación de un espacio económico-comercial ampliado en América del Sur – basado en la articulación entre el MERCOSUR y la Comunidad Andina, y con plena participación de Chile, Guyana y Surinam –, dirigido hacia la liberalización progresiva del intercambio de mercancías y servicios, la facilitación de inversiones y la creación de la infraestructura necesaria."