North-South Regionalism

North-south regionalism refers to the creation of a regional arrangement between developed and developing countries. As with other examples of economic regionalism, the level of integration in a north-south regional project can vary from the loose ties of a preferential trading agreement to the deep linkages that point toward an European Union-style union. The particular point of interest in a north-south regional project is the question of power asymmetry between the member countries. Where a north-north or south-south regional project is likely to see a certain degree of imbalance in the relative power of countries negotiating an agreement, this imbalance is markedly heightened in a north-south region. The northern country generally occupies a clearly predominant position and, as such, is able to substantially dictate the terms of the regional agreement.

There are a number of reasons why north-south regional projects have emerged over the last fifteen years, which can generally be grounded in the changes in the international political economy caused by the end of the Cold War and the acceleration of globalization in the early 1990s. In the late 1980s and the early 1990s, the dominant thinking in international economic relations posited the rise of three megablocs centered on Japan, Europe, and the United States. Within the context of the Cold War, developing countries had been able to play on global ideological tensions to obtain preferential access to one of these markets, a strategy which became obsolete after 1989. A central policy concern preoccupying leaders in developing countries thus became one of locking in guaranteed and preferential access to developed-country markets, ensuring that they were not ignored in the rise of competition between the three industrialized megablocs. The need to do this was magnified by changes in multinational corporation production techniques, which saw the transnationalization of just-in-time production techniques and the distribution of manufacturing processes across the north-south divide, particularly through maquiladora-style export processing zones. A concomitant transformation in the domestic political economy of developing countries took place, leading to the rise of new, export-oriented policy coalitions grounded in locally owned export assembly firms and agro-industrial combines. The result was a shift in the external context for many developing countries, making the formation of a region with a northern country a logical strategy for proactively defending the market access necessary to maintain the new patterns of national economic growth.

The imperatives pushing developed countries into a north-south regional project differ substantially from those seen in developing countries. A need for guaranteed market access is significantly less important given the preexisting patterns of economic dependence that continues to mark north-south relations. Instead, the ambition is one of exporting particular conceptualizations of the neoliberal model of globalization and using the carrot of region membership as a device for addressing the new security issues that dominate the north-south frontier. A particularly notable aspect of the north-south regional projects highlighted by U.S. policy is the expansion of northern trade laws and regulations into the south, in this case Mexico, Central America, and the Caribbean basin. While this does provide a high degree of regulatory homogeneity amenable to transnational U.S. [Page 629]firms, of greater importance is the subtle dissemination of a particular pattern of addressing global trade liberalization, pointing to a new ideological element in the region formation process. This becomes especially important in the context of hemispheric and world trade talks, where a principle of one country, one vote operates in consensus-driven negotiations. In this context, north-south regionalism becomes a strategy for propagating a “commercial fifth column,” creating a natural alignment of national interests by binding the economic elite in the developing country to firms in the developed country. The result is the formation of an implicit consensus on how the neoliberal model should be conceptualized and pursued. Active acknowledgement of the competing version of the neoliberal ideology does play a role in interregional talks seeking the formation of north-south regions, with Mercosur's parlaying of U.S. and European Union (EU) attentions emerging as an example of developing countries seeking a better agreement by playing one side against the other.

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