Actors and Forces Shaping Global Economic Integration

Introduction: The International System and Its Actors

The international system is comprised of many actors, each with its own motivations and goals. In the process of seeking these goals, they exert influence on the process of global economic integration. Some of the major actors are regimes, institutions, states, and regions. Non-actor influences include transnational issues that affect the different actors in different ways.

Trade Regimes and Global Commerce

A regime is defined as an international organization. Regimes can be loose arrangements between nations or more formal ones, such as NAFTA or OPEC. Within the context of international trade, there are several other key regimes, such as the WTO and the various regional trading blocs. Even trade agreements that are not all-inclusive constitute a weak form of regime. Such trade agreements began as a means to reduce trade barriers and expand trade, and they have been demonstrated to have improved the flow of trade significantly since their inception. Between 1994 and 2004, trade between the U.S. and Canada (who already had a free trade agreement prior to NAFTA) improved 140%; trade between the U.S. and Mexico tripled (Wayne, 2004). While trade has improved dramatically between member states of trade agreements, the increase in commerce has also spread to non-member states. The WTO/GATT, for example, has been found to have "boosted trade among non-member participants as much if not more than among countries of the formal membership roster" (Goldstein et al., 2003).

The WTO and other trade regimes set the terms of trade, representing the framework by which the flow of goods is controlled. Since the objective of these regimes has been to reduce barriers, and the result has been improved flow of goods and services, it is reasonable to conclude that trade regimes overall improve global integration. That is not to say there are no moments when they can be used to impede integration. A nation that holds significant power within a regime can use that power to amplify its own interests. Regimes such as OPEC that control key factor inputs can use their influence to restrict trade by limiting the price and/or availability of those inputs. However, it appears clear on balance that since the modern era of international trade regimes began, the overall effect has been to increase global economic integration.

International Institutions and Their Mixed Impact

Institutions include formal international bodies such as the European Union or the International Monetary Fund. These bodies exert considerable influence over global economic integration, and whether that influence is positive or negative depends in part on the objectives of the institution. Some, such as the IMF and World Bank, actively work towards global economic integration. The World Bank is active in building intellectual property rights in the developing world, a key antecedent to sustainable economic growth (UN, 2003). Other institutions, such as the European Union, have enhanced integration within a particular bloc but have not necessarily contributed outside of it, leaving such matters to constituent nations. Bodies such as the United Nations contribute research to help improve policy formation, even if they often have no legislative capacity of their own.

It is difficult to determine the exact impact of institutions on global economic integration. It is clear that some institutions have a strong positive impact on the amount of integration attained. But many other institutions, in the pursuit of their own interests, have little positive impact or may even have a negative impact on global integration. The picture is even murkier looking forward. The European Union, for example, represents an archetype of global governance — a move beyond the nation-state — yet in the pursuit of its own interests the EU impedes trade as much as it promotes it. Further emergence of such global governance institutions could in fact have a negative impact on global economic integration in the future.

Conclusion: The Balance of the International System

Overall, the various aspects of the international system have enabled the expansion of global economic integration. Regimes, institutions, and regional interests bring nations together to meet common objectives. As rational actors, nations sometimes impede global integration, whether over a domestic issue or a transnational one. No aspect of the current international system, however, specifically impedes global economic integration as a matter of design. Only when a nation removes itself from the international system entirely — as has occurred in North Korea, Cuba, Zimbabwe, and a handful of other countries — does economic integration become fully impeded. It is therefore reasonable to conclude that the international system, on balance and with a modicum of cooperation on the part of individual nation-states, enables global economic integration.