Old Alliances, Changing Times?

With the rise of East Asian economies and the proliferation of free trade agreements (FTAs) in recent years nations are increasingly competing for a share of the Asian ecomic ‘miracle’ within a complex set of regional, transregional and bilateral trade agreements often described as a ‘spaghetti bowl’. The current global economic crisis is changing the topography of capital flows and investment often with significant impacts on local economies, communities and international relations. This is the context into which the new WUN Asia-Pacific International relations research group held their inaugural workshop at the University of Gaudalajara (UdG) in Mexico. Mexico has amongst the highest number of FTA partners in the world, is on the doorstep of the world’s most powerful economy but where shifting trade flows forces has led to unease especially at the problematic pace of economic integration with East Asia.

The 2 day workshop ‘Asia-Pacific Foreign Direct Investment (FDI) In Mexico And Competing Regions: The Impacts Of The Global Economic Crisis’ drew together eminent scholars representing various disciplines from the Universities of Leeds, Sydney and Alberta and, associate partner in this project and host, the University of Gaudalajara alongside participants from five other Mexican Universities.

During the lively event prominent speakers questioned the growth of free trade agreements; highlighting the apparent evolution of regional organisations such as the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Co-operation (APEC) often disguised the undiminished significance of bilateral relations and the historical and political complexities of these relationships. Conversely, it is possible that FTAs are ‘enemies of free trade’ by embedding preferentialism and subverting global trade multilateralism. Mexico, a key member of NAFTA, has become over reliant on trade with its wealthy northern neighbours therefore neglecting links with China and other big Asian players. This overdependence which has led to a declining growth rates as the US economy has contracted in the current recession.

On the other hand, capital, labour and culture all now exist in a complicated globalised web so looking ’beyond asymmetry’ in terms of economic and power imbalances may reveal a more nuanced understanding. Economies achieving a high level of integration with China were examined and factors such as a Chinese diaspora, trust and historical and political contexts were noted as major factors. The current case of Google and its troubled relationship with the PRC can be seen as a failure of the company to gain market share, Chinese protectionism exacerbated by a cooling of political relations between the PRC and the Obama administration rather than issues around data integrity.

Wider implications of global trade flows were considered including the impact of FDI on environmental regulation especially in the Mexican agricultural sector. It was posited that environmental regulation could be strengthened through FDI in less robust local regulatory frameworks due to the higher ethical and quality bar set by the end market. However, the recent H1N1 pandemic is believed to have originated in a foreign invested pig farm in Mexico where regulatory controls were lighter.

The project will now go forward building up a major Asia-Pacific inter-disciplinary International relations cluster drawing on the strengths of the existing WUN Contemporary China centre and the ‘Managing Globalisation’ Global Challenge. The next workshop will take place in May 2011 at the University of Leeds on the topic of ‘Regionalism and Global Governance’. If you are interested in finding out more or joining this collaboration please contact Kirsty Mattinson: k.a.mattinson@adm.leeds.ac.uk