Regionalism in the Global Economy:Trends, prospects and Opportunities

The "regionalism trend" has been an important feature of the global economy since the mid-1980s and is becoming increasingly important at the turn of the century. The plans for free-trade areas in the Americas, the Asia-Pacific, Latin America, as well as the intensification of economic integration in the EU and its Eastward expansion will no doubt have extremely important implications for the global economy in general and developing countries in particular. Certainly, regions that are largely excluded from these developments, such as the Middle East, may be the most affected by this trend if it leads to the creation of inward-looking blocs. The object of this paper is to review and assess the regionalism trend, consider its future as an integral component of the emerging global system, and analyse its implications for developing countries in general and the middle East in particular. The main conclusion of the paper is that the regionalism trend will likely be supportive of the global system. However, there will be some potentially deleterious effects on developing countries throughout the world, including the Middle East and North Africa. The paper concludes with a discussion of strategies to avoid these negative effects and, indeed, take advantage of these new developments in the global system.