Globalization and Regional Integration in Europe and Asia 9780754676133, 2008052663, 9781315585116

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GLOBALIZATION AND REgIONAL INTEgrATION IN EUrOPE AND ASIA

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Globalization and Regional Integration in Europe and Asia

Edited by NAM-KOOk KIM Seoul National University, Korea

First published 2009 by Ashgate Publishing Published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © N Nam-Kook Kim has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the editor of this work. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data Globalization and regional integration in Europe and Asia 1. Globalization - Europe 2. Globalization - Asia 3. Regional planning - Europe 4. Regional planning - Asia 5. Europe - Politics and government - 1989- 6. Asia Politics and government - 21st century I. Kim, Nam-Kook 327.4 Library of Congress Cataloging-in-Publication Data Globalization and regional integration in Europe and Asia / [edited] by Nam-Kook Kim. p. cm. Includes index. ISBN 978-0-7546-7613-3 1. Europe--Foreign relations--21st century. 2. East Asia--Foreign relations--21st century. 3. Europe--Economic integration. 4. East Asia--Economic integration. 5. Regionalism--Europe. 6. Regionalism--East Asia. 7. Globalization--Political aspects-Europe. 8. Globalization--Political aspects--East Asia. I. Kim, Nam-Kook. JZ1570.A5G56 2009 337.1'5--dc22 2008052663 ISBN 978-0-7546-7613-3 (hbk) ISBN 978-1-3155-8511-6 (ebk)

Contents List of Figures and Tables Notes on Contributors Acknowledgements Introduction: A Framework for Peace in the Era of Globalization Nam-Kook Kim

vii ix xi 1

PART 1: GLOBALIZATION AND THE NEW WORLD ORDER 1

American Primacy and Europeanist Responses Peter Gowan

2

European Integration and the Future of the Nation State Jaime Pastor

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Globalization, Transnational Corporations, and Human Rights Chinsung Chung

41

3

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PART 2: EUROPEAN EXPERIENCE AND ASIAN REALITY 4 5 6

The European Experience: The Millionfold Trauma of the Twentieth Century is Still Virulent Holger Heide

63

Europe and East Asia: Holistic Convergence or Fundamental Skepticism? Nam-Kook Kim

85

Regional Integration and Income Disparities: The Lessons of Europe for East Asia Woosik Moon

105

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PART 3: IMAGINING AN ASIAN REGIONAL COMMUNITY 7 8 9

On an East Asian Community, or Kant’s Cosmopolitan Right Reconsidered Motohide Saji

123

Openness and Inclusiveness: Unfolding Regionalism in Northeast Asia Yongtao Liu

143

Beyond the East Asian Grand Division: Imagining an East Asian Peace Belt of Jeju-Okinawa-Taiwan Islands Samsung Lee

Index

161 181

List of Figures and Tables Figures 6.1a Per capita GDP in Europe as of 2000   6.1b Per capita GDP in accession countries (8 CEE nations) as of 2000   6.1c Per capita GDP in East Asian countries as of 2000   6.2 The pattern of σ for Europe and East Asia   6.3 Regional income disparities of East Asia, EU and the US (2000)   6.4 Variance of per capita GRDP for US, EU 12 and East Asia 10  

107 107 108 109 111 112

Tables 6.1 6.2

Regional policy funds in the EU (2000–2006)   Some basic statistics on European development banks  

116 118

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Notes on Contributors Chinsung Chung is Professor of Sociology at Seoul National University, Korea. Peter Gowan is Professor of International Relations at London Metropolitan University, UK. Holger Heide is Emeritus Professor of Social Economics at the University of Bremen and Director of the Social Economic Action Research Institute, Germany. Nam-Kook Kim is a Senior Fellow at SNU-KIEP EU Center and Research Professor at the Graduate School of International Studies, Seoul National University, Korea. Samsung Lee is Professor of Political Science at Hallym University, Korea. Yongtao Liu is Professor of Political Science at Fudan University, China. Woosik Moon is Professor of Economics at the Graduate School of International Studies, Seoul National University, Korea. Jaime Pastor is Professor of Political Science in the UNED (Public Open University), Spain. Motohide Saji is Professor of Political Science at International University, Japan.

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Acknowledgments This research project was organized by four institutions: the SNU-KIEP EU Center in Korea, the Institute for Gender Research at Seoul National University, the BK 21 Political Science Paradigm Project at Seoul National University, and the Institute for Peace Studies at Cheju National University. The contributors appreciate the financial support provided for this research by the National Research Council for Economics, Humanities, and Social Science in Korea and, for the publication, by the SNU-KIEP EU Center. We also thank Professor Se Kyun Kim for his excellent work as chief organizer for this project, and Seung-Ah Lee, Hannes Mosler and Jeemin Chun, the project’s wonderful staff.

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Introduction

A Framework for Peace in the Era of Globalization Nam-Kook Kim

Globalization is the process of the intensification and expansion of global interconnections as a result of the free movement of capital and labor which crosses the borders of traditional nation states. It thus refers to a shift or transformation in the scale of human organization that links distant communities and expands the reach of power relations across the world’s regions and continents. The globalization of production and consumption was earlier experienced in worldwide colonies during the imperial era of the nineteenth century. However, the current trend of globalization is different from the previous one in at least three respects; first, the speed of changes, second, the volume of changes, and third, the diversity of changes. Globalization is also different from internationalization in the sense that the latter presupposes the validity of the nation state’s borders. While some people expect the emergence of a harmonious world society or the growing convergence of culture and civilization in the era of globalization, others focus on deepseated xenophobia, new animosities, and conflicts which create a divided world and reactionary politics. Globalization is praised as the answer to all the world’s problems while being blamed for everything from pollution to poverty. Increasing the puzzlement are the stereotypes of globalization, including its characterization as American imperialism and as an economic panacea. As such, we can see both the positive and the negative aspects of globalization and its ongoing developments that change our everyday life. Critical topics in the era of globalization include the future of the nation state, global migration, human rights and women, culture and identity, movement to the extreme right, and United States’ unilateralism. All these topics indicate increasing instability and the need, therefore, to broaden our intellectual horizon beyond the paradigm of the modern era in which the territorial nation state dominates our perception. We can see how structural elements, both political and economic, have polarized the world into a minority of “haves” versus a growing majority of “have nots,” and how many of the global issues are connected to or have had their direct counterpart in some very local issues. Regionalization is one way to respond efficiently to the challenge of globalization. Countries in a certain region that share relative national identities and interests form a bloc to tackle increasing instability. The process of integration through

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which these regional agendas and identities are formed and sustained to facilitate cooperation is called regionalization. It is enhanced through the integration of several dimensions including economic, social, and political relations. Economic integration can be classified in four stages according to the degree of cooperation. The free trade agreement (FTA) is the first, in which tariffs are reduced to zero among related parties. The next stage is customs unions, in which no tariff among member states and common external tariffs against outside countries are imposed. The third stage is a single market in which the free movement of goods, services, capital, and people are guaranteed, and finally the fourth stage is an economic union in which legally binding, common economic policy is realized among member states. While economic integration is based on mutual interest, social integration is based on exclusive identity. Therefore, social integration mainly targets regional identity formation through the cultivation of common culture and customs. The increasing volume of economic trade can contribute to enhance social networks and connections among people of different countries in the same region. However, unlike economic integration, social integration takes a long time and the changes occur very slowly. It is therefore common that a newly established regional entity will intentionally foster symbols and cognition through a state top–down approach. As the highest level of integration, political integration includes both institutional arrangement at central and local government levels to ensure efficient government of the regional entity, and coordination of the security agenda to reduce tension and conflicts. Integration in the area of security consists of three stages of development. In the first stage, government officials and civil specialists create a pilot channel to deal with a security agenda. In the next stage, these channels become more stabilized through regular talks tackling a common agenda among member states. In the third and final stage, member states operate a standing committee through which trust building and disarmament, with binding effect, take place. If a region is successful in integrating in all three dimensions, it will have an efficient measure of control over the fluctuation of the market and thus increase stability in the region. In this regard, the European Union is one successful example of such an attempt. It is probably the second most ambitious project to maximize the capacity of human beings’ reason through careful planning since the communist revolution. During the revolution ambitious political elites tried to establish an ideal entity by containing the fluctuation of the market as well as people’s instinct towards self interest. European integration started with ideas of integration as a preventive measure against another war in Europe. This vision, in which Europeans want to create and share through EU integration, is clear to see, as is the subtle fabrication of institutional arrangement and the logical reasoning of institutional procedure. The EU is now rising as a global actor through this grand design of community building. This volume is the outcome of an international conference titled, “War and Peace in the Era of Globalization: Experiences from Europe and Asia” which was held in June 2007 in South Korea. A purpose of the conference was to search

A Framework for Peace in the Era of Globalization

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for a framework of stable peace in the era of globalization by drawing on the experiences of Europe and Asia. The world is observing various regional conflicts which threaten our daily lives. Europe and Asia have their own history of a long route to peace. Especially from the viewpoint of comparative civilization and the experience of European integration, we can find meaningful lessons for the future of the nation state and the possibility of building up a regional community in Asia. The book consists of three parts. The first discusses the current trend of globalization and the main characteristics of the world order, focusing on the destiny of the nation state, threats against human rights, and conflicts between the unilateral hegemony of the United States and European alternatives. The second part examines contemporary European experience and compares it with the Asian reality from the viewpoint of possible implications for the future development of Asia. The third part deals with regional integration as a framework for bringing stable peace and explores detailed principles and specific forms of regional community in Asia. Although this book examines regional integration as a possible framework for stable peace, it is not a eulogy for the European experience and for its unconditional application to Asia. The contributors from Europe and Asia critically review previous literature on this topic and suggest new theoretical and empirical grounds for regional community in Asia. In Chapter 1, “American Primacy and Europeanist Responses,” Peter Gowan explores the relationship between the political dimension of American grand strategy and the orientations of the US’s main allies amongst the capitalist powers of Eurasia, particularly those in Western Europe. He argues that since the collapse of the Soviet Bloc there has been a broad consensus amongst successive US administrations for America’s political goal in both Europe and East Asia to be that of regional primacy. He then suggests that neither realist nor liberal students of world politics have adequately conceptualized the ways in which the US’s allies, particularly in Western Europe, have responded to this drive for primacy. They have neither balanced against the United States, nor counterposed a liberal, co-operative security alternative. Instead, the chapter argues, US allies have used a tactic that can best be described as subversive bandwaggoning for regional goals. This chapter concludes by exploring the limits of this tactic and the possibilities of going beyond it towards a genuine regional collective security system at each end of Eurasia. In Chapter 2, “European Integration and the Future of the Nation State,” Jaime Pastor reviews the history of European integration and the future of the nation state. “European integration” has been a process of building an internal market, with a decisive role for the elites of the major states of Western Europe in a context of “Cold War” against the “communist” bloc. Since 1986, a “new Europeanism,” inspired by neo-liberal ideology, has been implemented giving new competences to the Union in the economic and monetary field. Simultaneously, the process of decentralization of many states has been important, especially where there are internal national conflicts, as in the case of Spain. The collapse of the communist

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bloc and the enlargement of the Union to the East created a new perspective for the project of a more powerful European bloc, with the draft “Constitution” the legal instrument for this goal. After the failure of this draft and in the context of internal geo-economic and geo-political divisions, the executive states continue to play an important role, but the legitimacy of the nation states is weaker because of the crisis of welfare policies, the tensions between center and periphery in different states, and the contradictory relation with “non-communitarian” migration. In Chapter 3, “Globalization, Transnational Corporations, and Human Rights,” Chinsung Chung analyzes the human rights dimension in the international economic agreements in light of the role and benefits of transnational corporations (TNCs). The main mechanisms facilitating globalization are multilateral, regional, and bilateral economic agreements. Multilateral and regional agreements concluded by international organizations, such as the World Trade Organization (WTO), have become an issue of human rights beyond an economic one. However, bilateral economic agreements represented by FTAs are not new in the field of liberalization of trade and investment. During the last 25 years, the free movement of trade and capital has been governed by the terms under the Uruguay rounds of the 1980s and the 1990s. Currently, the Doha round of the WTO seems to be heading towards an inconclusive end. These delays and other pressures have newly encouraged many countries to go in for FTAs. However, the practice of legally and logically linking the discussion of TNCs, inter-state economic agreements, and human rights has rarely been pursued. An apparent fact is that international economic agreements expand the activities and benefits of TNCs themselves, without much regard for the impact on human rights during this process. This chapter explores this new aspect of globalization focusing on the efforts of the United Nations. In Chapter 4, “The European Experience: The Millionfold Trauma of the Twentieth Century is Still Virulent,” Holgar Heide starts with the obvious instability of peace in East Asia that can seemingly be contrasted to the European situation. Before considering the European experience as an example, however, we should ask analytically, what are the interests that are the cause for the present unstable state? The fact that the majority of people in Europe seem to support the policy of capital as a “peace policy” has its roots in the massive traumata of the twentieth century. Being repressed, these traumata have lasting and severe psychological consequences. Like Europe, East Asia has experienced a similarly violent enforcement of modernity and hence capitalism. Today’s precarious security situation is just a consequence thereof. The region is in these times subject to the same societal pathologies as the European example. If there is to be any escape, then this lies in a recovery of society from the deep-rooted traumata and in consequence an overcoming of the paradigm of modernity. The remedy, though, will not be found on the level of politics, not even where this is referred to as “peace policy.” New social movements, provided they are oriented to tangible needs rather than “abstract interests,” may prove to be steps in the right direction towards a peaceful future. This is valid for East Asia as well as for Europe.

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In Chapter 5, “Europe and East Asia: Holistic Convergence or Fundamental Skepticism?,” Nam-Kook Kim traces the possibility of East Asian integration through comparison with the early stage of European integration on three different levels: ideas, national interests, and international circumstance. Judging from the European experience, ideas always come first, followed by national interest contests, and eventually international circumstance conditions the context. Kim compares the multilateral approach in Europe with imperial hegemony competition in East Asia, Adenauer’s regionalization policy in Europe and the Yoshida line of Westernization detouring from Asia, and the United States’ and Russia’s different roles in the two regions as external forces constraining the international order. His conclusion for the future of East Asia is located somewhere between views of procedural divergence and fundamental skepticism. He worries about integration for the sake of integration in which regional integration is presupposed as inherently good. Such discourse will easily be deteriorated and such a blind community simply collapses when the circumstance changes. For these reasons, there needs to be adequate discussion regarding for what, by whom, and through which method integration is achieved. In Chapter 6, “Regional Integration and Income Disparities: The Lessons of Europe for East Asia,” Woosik Moon focuses on the instruments for forging solidarity among possible members or participation countries and argues for the need to supplement the emerging East Asian trade and monetary integration with the establishment of regional developing banks. Indeed, there are three possible ways to forge solidarity: fiscal federalism, regional policy, and development banks. But, given the current situation on regional arrangements in East Asia, characterized by the absence of any meaningful institutions on a regional level, it would be difficult for the East Asian region to dispose of the income transfer through the first two instruments. A new development bank will then be the only available alternative. Helping to reduce the wide income difference that exists among East Asian countries and providing economic and social protection systems to its poorer member countries, it will support and promote economic integration in East Asia. In Chapter 7, “On an East Asian Community, or Kant’s Cosmopolitan Right Reconsidered,” Motohide Saji deals with the idea of an East Asian Community that has lately emerged and been discussed. According to him, three pillars are required to build such a community: a politico-security pillar, an economic pillar, and a socio-cultural pillar. The last one, the least discussed and developed among the three, concerns an East Asian identity among people in Asian countries. Such an identity may be fostered through growing interactions among people and civil society organizations including non-governmental organizations (NGOs) and through increasingly shared ideas, values, and norms thereby developed. An East Asian Community may thus be recognized, supported, and developed by the peoples in Asia. Through a reading of Immanuel Kant’s view on cosmopolitan right in his Perpetual Peace and The Metaphysics of Morals, this chapter attempts to suggest how such a socio-cultural pillar may emerge.

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In Chapter 8, “Openness and Inclusiveness: Unfolding Regionalism in Northeast Asia,” Yongtao Liu adopts a method combining both material and cultural approaches to the issue of a possible new regional order and peace in Northeast Asia. He first provides several imagined scenarios of regional orders that may emerge in the international system of Northeast Asia in the coming decades, and then analyzes corresponding levels of peace in the region by placing them in those imagined scenarios, focusing on interactions among China, South Korea, and Japan in terms of their changing material capabilities and social identities. Finally the scenario of regional order emerges that will provide a longer peace in Northeast Asia and suggested approaches to the social construction of that favored regional order. In Chapter 9, “Beyond the East Asian Grand Division: Imagining an East Asian Peace Belt of Jeju–Okinawa–Taiwan Islands,” Samsung Lee deals with three main themes. The first one deals with the question of how to conceptualize the East Asian regional international order since the end of World War II. The second is concerned with how to visualize in geographical terms the predicament the East Asian international order has been faced with in those post-War decades. The final theme approaches conceptualizing, in visual geographical terms, the alternative international system for the future of the region. This chapter argues that the East Asian regional system of Grand Division can be very well visualized by the fate of the three geographical peripheries that are located precisely along the line of the Grand Divide: Taiwan, Okinawa, and the demarcation line of the Korean peninsula. The tasks of the three islands, establishing a framework for peace in the Taiwan Straits, the demilitarization of Okinawa, and keeping the Jeju Island from becoming another military outpost in the conflict system of Grand Division, are all intertwined and therefore should be contemplated in a comprehensive and interconnected way. These nine chapters are classified under the different titles of the three parts: “Globalization and the New World Order,” “European Experience and Asian Reality,” and “Imagining an Asian Regional Community.” Although this book carefully examines the European experience as one of the most ambitious experiments in modern history, it rejects an unconditional convergence perspective with critical viewpoints on the European experience and its implication for Asia. Of further importance, this book advances strong theoretical and philosophical grounds of integration, which is different from the commonly shared viewpoint of economic interest. Moreover, this book suggests highly detailed new perspectives and political designs for Asian regional community.

PART 1 Globalization and the New World Order

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Chapter 1

American Primacy and Europeanist Responses Peter Gowan

Introduction This chapter seeks to explore the relationship between the political dimension of American grand strategy and the orientations of the United States’ main allies amongst the capitalist powers of Eurasia, particularly those in Western Europe. It argues that since the Soviet Bloc collapse there has been a broad consensus amongst successive US administrations for America’s political goal in both Europe and East Asia to be that of regional primacy. It then suggests that neither realist nor liberal students of world politics have adequately conceptualized the ways in which America’s allies, particularly in Western Europe, have responded to this drive for primacy. They have neither balanced against the US nor counterposed a liberal, co-operative security alternative. Instead, the chapter argues, US allies have used a tactic that can best be described as subversive bandwaggoning for regional goals. The chapter concludes by exploring the limits of this tactic and the possibilities of going beyond it towards a genuine regional collective security system at each end of Eurasia. The Current American Political Concept for World Order The notion of a world order denotes a set of basic rules for inter-state relations which persist over time because they rest on rather solid foundations of political and socio-economic reproduction. In modern capitalist conditions in which capital craves security and predictability, the pressures towards establishing stable international orders with fairly clear rules of functioning are very strong. At the same time, world orders are constructed in an inter-state system marked by extraordinary and growing disparities of wealth and power as between states. And the foundations of world order lie in the arrangements made between the richest and most powerful states. These are by no means necessarily the most populous states: they are the states with the highest productivity of labor at the top of the international division of labor: the core capitalist countries in the contemporary world, concentrated in North America, Western Europe, and East Asia. As the American Defense Policy Guidelines of 1992 made clear, the crucial challenge for

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American grand strategy resides in these core capitalist centers. These are the most important centers from which a challenge to US power could be launched. And the central problem for American grand strategy is how the United States should handle its relations with these core capitalist states. Producing order amongst the core capitalist states requires more than a set of military-political arrangements of the sort that realist scholars typically focus upon. It requires gaining acceptance of fairly stable rules of functioning of the international political economy. And both political and political-economy systems can be sustainable only if they are institutionalized and thus legitimated normatively not only between states but within them at the level of domestic politics. During the Cold War the United States established a distinctive kind of world order which marked a radical break with the pre-1945 world of rival geopolitical centers amongst capitalist powers. It brought all the core capitalist states within its own sphere of influence, directly taking over management of their militarypolitical security through a set of hegemonic alliances directed towards a militarized confrontation with the Soviet Bloc and China. At the same time, the United States organized the international political economy of capitalism in such a way as to assure the flourishing of its core capitalist allies, privileging them over countries of the global South as well as the Soviet Bloc: the rules of the capitalist part of the world economy systematically favored the rich countries at the top of the international division of labor over the rest. The American claim to exercise unipolar primacy in the strategic field during the Cold War applied first and foremost to relations with the Communist states. But America also took upon itself to manage the vital security issues of its allies in relation to countries of the South: ensuring the continued flow of strategic materials to its allies from the South and, as far as possible, protecting their investments and markets in the South.1 While this set of Cold War arrangements was legitimated as a liberal, cooperative order between the US and its allies, it was, in fact, a unipolar order in the military-political field in which the United States claimed the right to unilaterally decide upon the critical security problems of the entire capitalist core. The cooperative dimensions of the order, expressed in the various common institutions of the capitalist world, existed within that unipolar framework. The collapse of the Soviet Bloc may have radically altered much of the context facing the capitalist core, but amongst those who study American grand strategy there is a fair degree of consensus that since the collapse, the American state has sought to maintain the basic features of its Cold War arrangements: a political 1  One exception was Francophone Africa but this exception was tolerated because it was judged a strategic backwater by Washington. The American claim to primacy over the military-political relations of US allies with the South did not mean that the allies had to agree with and follow Washington’s diplomatic line in the South. But they would project their military power into the South against Washington’s wishes at their peril, as the British and French discovered in their Suez invasion of 1956.

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strategy of maintaining US primacy over the capitalist core.2 And a global political economy whose rules systematically favor the core centers over the rest. On the political side of this conception, some scholars use the word “hegemony” rather than primacy and others prefer the terms “unipolarity” or “monopolarity.”3 But in the technical sense in which the concept of primacy is used in American grand strategic discourse it implies something rather precise: an effective American claim of the right to decide on the key military-political security issues facing its core capitalist allies. While there are very many differences between the foreign policies of the Bush Senior, Clinton and Bush Junior administrations, as well as in their legitimation strategies and styles, we agree with those authors such as Paul Wolfowitz who have argued that there has been basic continuity in the goals of American grand strategy in the political field since the triumph of the perspective outlined by Wolfowitz and others in the Defense Policy Guidelines of the Bush Senior administration of early 1992.4 The Clinton administration accented its efforts in the direction of rebuilding American primacy towards the reorganization and expansion of NATO in the West and the US–Japanese security alliance in the East, enunciated the doctrine of conditional sovereignty and the concept of Rogue States, marked out for regime change (as well as vigorously working to impose the rules of the globalized political economy). The Bush administration sought to use the 9/11 attacks as an opportunity to radicalize and speed up the drive to consolidate this primacy order, giving it a new normative framework as an US-led “war against terror” on the part of the “civilized” world. Regionalized Alternatives to American Primacy The US drive for primacy in the post-Cold War world has surprised and shocked many students of international politics. It has also led to debates about possible alternatives to this drive for an American unipolar world order. Amongst these alternatives many have focused on the possibilities of a more decentralized and regionalized global political system and in that context have identified the West European states as the potential or actual bearers of a project for just such a more regionalized arrangement. Perspectives of this sort have been canvassed both by realist and by liberal scholars. Realist scholars have disagreed on the extent to which a unipolar world order built around American primacy may be sustainable, but they have shared common conceptions of the options facing great powers: they can either bandwagon with 2  For a fairly comprehensive summary of elite debates on the military-political side of grand strategy in the United States see Posen and Ross (1996–97). 3  See Layne (1996); Wohlforth (1999). 4  See Wolfowitz (2000).

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the United States or seek to balance against it. And these options concern power strategies with material, military capabilities at their center. Some neo-realist scholars, led by Kenneth Waltz, have argued that American primacy is unstable and unsustainable because it is viewed as too threatening by Eurasian powers. On this view, the dynamic of international politics should be towards the emergence of a coalition of Eurasian powers set upon balancing against the United States. Supporters of this perspective have often identified France and Germany along with other West European powers as pursuing a strategy of seeking to balance against the United States. French President Chirac frequently alluded to the need for a multipolar world. German leaders have supported efforts to build a European Union military arm through the construction of the so-called European Security and Defence Policy (ESDP). The ad hoc coalition of Germany, France, and Russia voicing opposition to the US and British attack on Iraq is viewed by some as clear evidence of the start of such European balancing against the United States. Amongst liberal scholars who see the West European states as potential bearers of an alternative world order to that of American primacy, the source of this alternative lies in the field of political values and/or domestic interest groups rather than material power rivalries. In this field they have identified the origins of the American drive for primacy as lying in various features of the American domestic political system. Some have pointed to the values at the base of the Republican Party under George W. Bush: the Christian fundamentalist right and the American Conservative movement. Others have stressed the role of interest group coalitions such as the military industrial complex and the American international oil companies. And yet others have highlighted the role of elite ideological factions, particularly the so-called neo-conservatives with their commitment to an American Empire. By contrast, such liberal scholars have viewed Western Europe and the EU as lacking these domestic trends and as being much more strongly oriented towards liberal internationalist principles in international affairs. The West Europeans are thus perceived as a liberal vanguard with a commitment to the principles of international law, co-operative security, and the privileging of the resolution of international conflict though multilateral diplomacy with the resort to force being exercised only as a final option in defense of liberal values when all other options have been exhausted. In support of this conception, liberals can point to the centrality of multilateral negotiation centered upon the resolution of disagreements through treaty-based agreements within the EU itself. The EU has also privileged multilateral negotiation on an increasingly wide range of issues in its international operations and during the 1990s it has placed liberal principles of human rights and democracy at the center of its international diplomatic strategy. Opposition to the Anglo-American attack on Iraq not only from West European political leaders but on the part of public opinion across the EU is also viewed as evidence of the strong value-base for liberal internationalism and co-operative security within the EU.

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The Weaknesses of Realist and Liberal Accounts of Regionalism Neither the realist proponents of European regionalist resistance to the American primacy project nor their liberal counterparts have offered compelling accounts of the European responses. As realist critics of Kenneth Waltz like William Wohlforth have demonstrated there is almost no evidence of European balancing against the United States in the sense in which realists use that term. In the face of rising American defense budgets, European defense spending has stagnated or actually declined. And French and German opposition to the invasion of Iraq was of an exclusively verbal-symbolic kind. It did not extend to a refusal to allow the United States to use its logistic resources in Europe for the invasion—something the West Europeans had done in the 1970s and in the late 1980s in relation to US operations in the Middle East. Where an element of balancing can be detected is in the strengthening of security links between China and Russia and in their joint efforts to limit American encroachments into Central Asia through the Shanghai Co-operation Organisation (SCO). But this remains a limited sphere of security co-operation rather than a full-blown defensive alliance between these two powers. Some scholars have responded to the lack of evidence of West European balancing by making a distinction between hard balancing—which implies building material resources against American power—and soft balancing which can be understood as discursive-cum-diplomatic opposition, laying the basis for hard balancing in the future. But this argument also seems unconvincing. In the first place, although the readiness of French and German leaders to link up with President Putin of Russia against the invasion of Iraq was impressive at the symbolic level, it was not sustained once the invasion had taken place. Instead, diplomatic relations between Russia and most of the West European states, including even the Merkel government in Germany, have deteriorated. And instead of the French and German positions on the Iraq war leading to a vigorous diplomatic effort on their part to bring the EU as a whole over to a distinctive diplomatic line against US policy in the Middle East, we have seen, if anything, the reverse: a readiness to endorse UN legitimation of the occupation of Iraq and a swing towards the Bush administration’s stance on the Israel–Palestine conflict. There has also been a very substantial turn in West European diplomacy towards Iran since 2002, a turn which, without endorsing a US military attack on Iran, has effectively backed the American drive to deny Iran its right to develop the full nuclear fuel cycle on its territory under IAEA supervision. None of this suggests a West European turn to “soft balancing.” At first sight the liberal case for a Europeanist challenge to the American primacy project looks stronger. Liberal internationalist and indeed liberal cosmopolitan values have been at the heart of the diplomatic discourse of the EU since the early 1990s and none of the major EU states with the possible exceptions of the British conservatives and Forza Italia in Italy have ideological commitments similar to those of the Republican right. There is also no militarist lobby on anything like the

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scale of the American one in Western Europe. And public opinion in Europe—and not least in Germany—has a far more pacifist international orientation than is the case in the United States. Yet there are strong grounds for arguing that Europe’s political liberalism belongs more in the field of political legitimation than in the field of governing policy at state or EU level. A case in point would be the International Criminal Court (ICC), which had been a rather central project of the EU states since the 1990s. It has also been viewed by many as a touchstone of the EU’s commitment to liberal principles in contrast to Washington’s rejection of the project. Yet the ICC project explicitly excludes military aggression as a crime within its jurisdiction—a rather flagrant break with long-established liberal internationalist traditions. And such major states as France as well as Britain have well-established cultures of Machiavellian realpolitik in their diplomatic and power-projection behavior towards countries of the South. The EU itself endorsed without qualms an aggressive NATO war against Yugoslavia in 1999 despite the fact that the NATO attack lacked any mandate from the UN Security Council. And no steps have been taken at EU level to impose discipline on its member states to prevent their future repetition of the British involvement in US aggression against Iraq. And even in the more narrowly defined field of respecting international norms on individual human rights—a particularly strong theme in the EU’s diplomatic discourse—the main governments of the EU have been shown to have ignored such principles by co-operating with American operations within the EU itself in extraordinary renditions. And the readiness of the EU and its major states to move closer towards the United States in Middle East policy after the invasion of Iraq, referred to above, is surely a further indication that the West European states have not moved in the direction of mounting a sustained, liberal political challenge to the strategy of the Bush administration, far less to the primacy project of the United States. This is not to deny the greater strength of liberal internationalism among the public opinions of many states within the EU or the much less strong constituency for aggressive militarism in Western Europe than in the United States. It is, however, hard to justify the claim that the states of Western Europe have shown an inclination to place a value commitment to political liberalism above their commitment to maintaining their alliance with the United States under a Bush administration. An Alternative Concept: Regionalist Subversive Bandwaggoning We wish to suggest an alternative way of conceptualizing the behavior of the West European states in the face of the American primacy project, one that differs from both realist and liberal conceptions. The term we will use is that of regionalist “subversive bandwaggoning” (SB). For neo-realists the phrase subversive bandwaggoning is a contradiction in terms. There is certainly a tension within the tactics of subversive bandwaggoning, but a contradiction exists only if one

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subscribes to neo-realist theoretical assumptions. At the same time, the concept of subversive bandwaggoning downgrades the importance given by liberals to political values and/or interest group coalitions at the domestic level. It suggests a more pragmatic form of power politics than cognitive liberals would allow. At the same time, the power political basis for subversive bandwaggoning emerges clearly only when we grasp the ways in which power politics is inflected by the capitalist character of social systems in the contemporary world. The term “subversive bandwaggoning” implies real bandwaggoning with American power but it also implies real subversion of some of the ways in which that American power can be articulated as well as an effort to take out an insurance policy on future uncertainty. The real bandwaggoning means that the West European states have accepted their presence within an American security zone in the political-military field. They have not attempted to break up that American zone or sphere of influence in the post-Cold War period: this is true even of the French. They have supported the extension of the American sphere into the former Soviet Bloc, into former Soviet Republics and into the Greater Middle East and Central Asia. European military forces have, after all, been deeply engaged in NATO military action in Afghanistan for a number of years. Thus, the realist concept of power balancing, with its implication of European states seeking to be their own autonomous military-political sphere of influence challenging the United States does not apply. Thus insofar as the realist concept of bandwaggoning refers to military power politics and the construction of military security zones, the West European states have bandwaggoned with the United States. But realist theorists tend to view the choice by a power of bandwaggoning as the option of the weak coerced by the power of the strong into tailing the latter. This is a very one-sided and “negative” explanation for bandwaggoning by America’s allies. It ignores the other side of the American world order project during the Cold War: the commitment by the United States to arrangements which ensured the flourishing of its capitalist core allies and which systematically favored the rich countries over the rest. More, it drew the other core countries into institutions for a considerable degree of joint management of relations between the core capitalisms and the rest of the world: institutions like the EU itself, which the United States promoted in the 1950s and 1960s as well as the IMF, the World Bank, the GATT and the WTO. And it has been in this area of the global political economy that the language of liberalism has been immensely strong, a language and ideology that has systematically legitimated policies favoring the strong capitalisms over the rest.5 But the internal organization of the politics of the US security zone and the way that politics is articulated is not pre-given. And there is a very large swathe of political activity that falls below the threshold of military-security power politics. And it is here that the West European states have acted in ways that could be 5  For a compelling analysis of this reality see Chang (2007).

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described as “subversive” from the angle of American grand strategy since the end of the Cold War. Such subversion has operated along three main lines: first, an effort to strengthen the collective voice of Europe as an influence on Washington on geopolitical issues concerning the security zone and most especially concerning the European theatre; second, to develop a more cohesive West European approach to a whole range of issues both in the field of international economics and in submilitary-security areas of international politics; and third, to raise the threshold at which America’s main resource in international politics, its military capacity, would kick into play. We will look at each of these in turn. To understand the European effort to strengthen its collective influence in Washington on security-zone matters, especially in the European theatre, we must appreciate the internal structure of the NATO alliance in the Cold War period. Within NATO there was no organized European voice at all. NATO was organized along hub-and-spokes lines in which the European spokes related separately to Washington, rather than gathering together as a caucus to try to define their own collective view and to offer it to Washington. And within that structure Washington would lead in a hegemonic way, most particularly on all matters to do with the European theatre (and the confrontation with the Soviet Bloc). With the end of the Cold War, a united Germany in particular was largely liberated from immediate dependence for its survival on American protection and thus from having the status of an American security protectorate. That liberation was also felt across Western Europe to a greater or lesser extent. Divisions over the nature of European strategic interests have persisted amongst the various West European states (and the East European ones as well), but from the early 1990s onwards Germany has joined France in seeking to promote what could be called a European caucus attempting to develop its own sense of security identity and interests within the American-led alliance. That goal was particularly salient for issues concerning Europe itself and its immediate periphery, following the Soviet collapse and the huge retreat eastwards of Russian power. Alongside this effort was the attempt to build the ESDP with military staff discussions and with joint armed forces for so-called peacekeeping tasks on Europe’s periphery. This effort was resisted by successive American administrations from George Bush Senior through Clinton to Bush Junior. Second, the West European states have substantially raised the scope of EU collective policy since the mid-1980s, and particularly since the end of the Cold War. This has been true most obviously in the field of economics, with the arrival of the euro but it has also applied in other fields from human rights, democratization, and good governance diplomacy, through the Kyoto Protocol to voting as an EU caucus in the General Assembly of the United Nations. These efforts to co-ordinate policy in what could be described as “sub-security” fields included even the British and on occasion diverged from the policies of the Clinton administration (and much more strongly in many cases, from those of the Bush administration). The Bush administration in particular took these divergences as symptoms of European subversion, notably on the ICC and Kyoto. Furthermore, this European behavior

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raised a more diffuse concern among American policy-makers that the kind of “fungibility” which the United States’ primacy over its security zone gave it in other areas of policy during the Cold War was being eroded. Third, and in some ways most sensitive, some West European states have sought to build institutional barriers to the unilateral exercise of aggressive military power by trying to insist that the aggressive use of force, even by the United States, should require a UN Security Council mandate. Despite the fact that the EU states themselves had participated in the war in Yugoslavia without such a mandate, some European governments, notably that of Germany, argued just after that war that in future such a mandate would be necessary if US force was to gain German support. And many West European states sought to defend various arms control regimes and sought to resist American efforts—notably those of the Bush Junior administration—to scrap them. These three subversive thrusts by various West European states and by the EU caused considerable tension at an elite level between the West Europeans and the US in the late 1990s when the Clinton administration was still in office. But while the European thrusts along these lines were legitimated in liberal internationalist or liberal cosmopolitan terms these thrusts were not driven by ideological commitments but by an effort to strengthen the political influence of the West European states within the American security zone. But from the moment the Bush Junior administration came into office, it was determined to end these subversive trends in Western Europe. And while the Bush administration’s aggressive drive after 9/11 was manifestly focused on targets outside the European theatre, it was articulated ideologically and politically to make European subversive bandwaggoning impossible: if the West Europeans refused to bandwagon they risked being treated as hostile by the United States. But if they did bandwagon they would be required to abandon all three of the axes on which they had sought to strengthen their role and influence within the American-centered system. This choice split the West Europeans and the EU. The Blair government assumed that when the invasion of Iraq finally took place the French and Germans would bandwagon with the US at the last minute. This did not happen, but their rejection of bandwaggoning occurred only at the symbolic (and at the financial) levels. Yet having achieved this victory over its European allies, the Bush administration sank into the debacle of the Iraq occupation. Both sides of the Atlantic alliance were thus weakened. The Thinness of EU Liberalism Despite the absence of a principled liberal internationalist rejection of the aggressive thrust of the Bush administration and the more general failure of the West European states to campaign vigorously for a collective security order rather than a world order centered upon American hegemonic military alliances, many believe that given the nature of public opinion in Europe, a swing towards a more

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independent and more principled liberal internationalist regional center on the part of the EU. Part of the answer undoubtedly lies in the fact that the elites of the EU remain deeply committed to the political economy structure of the American-centered order and its rules of functioning. And the entire history of these states since World War II has been one of their transformation into states whose overwhelming preoccupation in international policy is commercial and financial, given their loss of empires and their loss of autonomous geopolitical strategic capacity. This shift (along with other profound domestic cultural changes) has made most of the West European states less inclined to support aggressive power projection (although the domestic political base for such power projection using a professional army remains strong in Britain and also in France). But it simultaneously strengthens their commitment to an American-centered global economy which gives the European states both great economic opportunities and great scope for influencing the shape of the markets of the world economy. But there is a further dimension to any explanation of the thinness of official liberal internationalism within the EU states since the end of the Cold War: namely the turn on the part of most of the EU states away from a social-democratic orientation in domestic affairs and towards a neo-liberal order in which states reduce their social commitments to their citizens and in which social life is increasingly shaped by market imperatives. This shift towards a Hayekian brand of neo-liberalism has been in very large part organized through the transformations of the EU since the mid-1980s. Though the macro-economic results of this transformation have been rather poor there has been a powerful consensus for pursuing this neo-liberal agenda through the EU amongst the European business classes and state elites. And that elite consensus on neo-liberal domestic transformation gains powerful support from the American state and business class’s approach to the organization of capitalism. Leadership of the very large movement of public opinion in Europe against the aggressive thrust of the American state has fallen mainly to political forces on the European left which have also been hostile to the EU-wide turn towards neo-liberalism. Conclusion: An Unsettled World Order If the argument in this chapter is well-founded, we have a paradoxical conclusion that both the American state and business elites and those of Western Europe have remained committed to seeking to maintain an American-centered order in the capitalist world, yet have simultaneously failed to harmonize their strategic approaches towards doing so. Yet the global context has changed markedly since the Soviet Bloc collapse making the consolidation of the kind of world order that existed during the Cold War very difficult to reconstruct. The essence of that order’s cohesion lay in the

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fact that the capitalist core was small—the “rimlands” of each end of Eurasia— American power could easily organize it as a cohesive security zone through the militarized confrontation with the Communist world, and the center of world capitalism lay evidently within the Atlantic world, so that the main states of that region could shape market structures and outcomes in the world economy rather easily. All these conditions are disappearing. For the first time in over a century, two major world powers hitherto excluded from the capitalist core are attempting to rise up the international division of labor and enter the core: Russia and China. In their different ways both these states— in the Russian case since the arrival in power of President Putin—have been seeking national economic integration and a strong insertion into both the world economy and world politics. And both offer powerful inducements to states within the core to deepen the economic linkages between the core and themselves. Yet their successful pursuit of their strategies would tend to disorganize the inherited capitalist core beyond recognition. The classical Atlantic response to major powers outside the core seeking acceptance within it has been to exert political (and military) pressure upon them until they open up their economic assets to ownership by Atlantic capitals, a process which has typically resulted in the failure of such powers to maintain their drive to catch up with the core in the industrial field. And this has been the approach of the Atlantic states both towards Russia under Yeltsin and towards China. But in neither case has this effort so far been successful. Both Russia and China have generated centrifugal forces within the core by means of the kinds of economic advantages they can offer core capitalisms without sacrificing control over their own economic strategies. And American efforts to exert strong military-political pressure on both Russia and China has suffered serious setbacks in recent years in various former Soviet Republics including Central Asia, while simultaneously pushing both powers into closer alliance with each other, notably in the Central Asian theatre. And finally the rise of China in the economic field has further strengthened the tendency that was already evident at the start of the 1990s for the center of gravity of dynamic growth in the work economy to shift into East and Southeast Asia. Problems in the American economy after a decade of booms fostered by speculative bubbles in American asset markets seem likely to strengthen this trend. These kinds of challenges as well as others from countries of the South are likely to play a decisive role in shaping the transition to a new kind of world order in the first decades of the twenty-first century. This seems likely to be a more regionalized order, but the relevant regions may include Russia in the West of Eurasia and include China if not being centered on China in East Asia. But neither of these variants would be easily accepted by the United States. Thus an era of turbulence and volatility in inter-state relations seems probable.

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References Chang, Ha-Joon (2007), Bad Samaritans (London: Random House). Layne, Christopher (1996), The Peace of Illusions (Ithaca, NY: Cornell University Press). Posen, Barry R. and Ross, Andrew L. (1996–97), “Competing Visions for US Grand Strategy”, International Security, 21(3) (winter): 5–53. Wohlforth, William (1999), “The Stability of a Unipolar World”, International Security, 24(3) (summer): 5–41. Wolfowitz, Paul (2000), “Remembering the Future”, The National Interest, 5 (spring).

Chapter 2

European Integration and the Future of the Nation State Jaime Pastor

Introduction The history of European integration began, as is well known, on 25 March 1957 when the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM), for joint research and civil use of nuclear energy, were founded with the signing of the Treaties in Rome. The two Treaties entered into force on 1 January 1958 after being ratified by the six member states (France, Germany, Italy, Belgium, Netherlands, and Luxemburg). Prior to this, the European Coal and Steel Community had been created in 1952 while the attempt of France to establish a European Defence Community failed in 1954. Since 1958 the aim of this process of integration has been to create an internal market of the “four freedoms”—of goods, services, persons, and capital—with five rounds of enlargement to new states having created the largest market in the world in terms of gross product. This process was promoted by the economic and political elites of the founding states against the “Soviet threat” and the risk of political and social destabilization in Western Europe after World War II. The role of “transatlantic solidarity” with the United States was key in this orientation, and the Marshall Plan in 1947 and the building of the North Atlantic Treaty Organization (NATO) in 1949 were the two major pillars of this solidarity: the common project was to defend the “free world” under US hegemony against “communism.” The dominant opinion of the elites was that the progressive advances in the economic integration of different member states would help to create a more advanced political integration. The role of the new political institutions—the European Commission, the European Court of Justice, the European Central Bank—would be important in this evolution, but generally depending of the agreements between executive states. Nevertheless, the European Court of Justice, for example, has been a key actor in creating the principle of “primacy of communitarian law” over the national laws, a principle that would have greater influence in the 1980s and the 1990s when the European Commission approved around three hundred directives in favor of the application of neo-liberal policies in all the economies of member states; recently, the sentences Laval, Viking, Rüffert, and Luxemburg have been new evidences of this role. In any case, the result of this

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process has not been political integration but, as we can see now in the context of the financial and global crisis, the centrality of the intergovernmental level. The “New Europeanism” and the Collapse of the Soviet Bloc The Single European Act in 1986 and the Treaty on the European Union in Maastricht in 1992 were successive expressions of the will to clear the way to a new phase of economic and monetary union, with the transfer by the states of new competences in these spheres to the communitarian institutions, with the aim of a “single market” of free movement of goods, services, and capital and without any “protected” sector of the economy. But it happened in a new historical period after the collapse of the Soviet Bloc and with the crisis still open in Yugoslavia, with the end of the traditional “threat” creating a new challenge for the enlargement of the EU towards the east. Simultaneously, US intervention in the crisis in Yugoslavia and NATO’s enlargement towards Eastern European countries helped the “global superpower” to reaffirm its hegemonic role in the European continent and made visible the absence of a common foreign policy and military autonomy of the Union. The 1990s period developed in a context of “globalism” and neo-liberalism that pushed all the European states to abandon the Keynesian policies of former decades and to assume the criteria established in the so-called “Washington Consensus.” In this process the “lobbies” acting in Brussels played an important role, especially the European Round Table of Industrialists (ERT), formed by representatives of European corporations, and the Union of Industrial and Employers’ Confederations of Europe (UNICE) (Balanyá et al. 1999). For that, in 1993 the ERT proposed to the President of the European Commission, Jacques Delors, a consultative council formed by representatives of different corporations (Unilever, ABB, Nokia, and BP); this council recommended in three rapports the “modernization” of education, the liberalization of the public sector, and the “flexibilization” of the labor market, all of which were welcomed by the Commission and inspired the agreements of the “Agenda of Lisbon” of the European Council in 2000 (Pijl 2006). The project of a new “leap” from the “eurowestern caucus” (Gowan 2005) in the post-war era to a stronger and larger “Europe” in the monetary, political, and military areas was discussed greatly among governments in different meetings during the 1990s and in the framework of new Treaties and Declarations (Amsterdam, Laeken, Nice), but the US feared that this route would lead to an autonomous Europe. In any case, the result was the elaboration by a “European Convention” of a new European Constitutional Treaty at the beginning of the twenty-first century. Nevertheless, after 9/11 and the US-led war against Iraq in 2003 the differences between member states regarding their relations with the US—with the United Kingdom, Spain, Italy, and eastern countries on one side, and France, Germany, and other western countries on the other—became deeper, and a new crisis opened in the European Union.

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There have been many debates about the kind of interaction between governments and European institutions, but generally the state executives were the major player because “generally, we can say that there is a separation between the capability of performing and the order for performing. The capability is already in the European institutions but the order depends on the national governments” (Offe 2000, 258–9). Nevertheless, the nation states have known a real crisis of their centrality because, on the one hand, some competences (trade, currency, and others) have become “federalized” in favor of the institutions of the European Union, and on the other hand, other competences have been decentralized in favor of the regions. Therefore, we can find three levels of cooperation or political intervention in the EU: the intergovernmental level, the level of European institutions, and the level of the regions, but always with an important role of corporative interest groups in the processes. The role of the European Commission and the European Court of Justice cannot be underestimated, because during the history of European integration the more dominant feature has been “negative integration,” that is, the exclusion, through the sanctions imposed by the European Commission or, if needed, the European Court of Justice, of tariffs and other obstacles to the trade and mobility of factors of production and circulation of commodities and capital between the economies of the EU. This “negative integration” has been narrowly linked to a “new Europeanism” which, as Peter Gowan (2006) reminds us, is the accomplishment of the thesis developed by the “father” of neo-liberalism, Friedrich Hayek, at the end of the 1930s: to give an impulse to a federalization of European states as the instrument for the “autonomy of the economy” against class struggles at the state level and the obstacles for the implementation of liberal policies by the governments. A Neo-liberal “Economic Constitution” There is no need to remind ourselves that neo-liberal policies began to be implemented in the US and the United Kingdom and, later, in the European continent. Since the Single European Act in 1986 and the Treaty of Maastricht in 1992, “new Europeanism” was the expression of this turn but the process was unequal in each country, depending of the evolution of class struggles and the strength of trade unions and leftist parties. Preparation of the conditions for the “euro” pushed the 11 member states (later, Greece) in favor of this single currency to adhere to the engagements of the Stability and Growth Pact: fiscal deficit of no more than 3 per cent of GDP, public debt of no more than 60 per cent of GDP, and narrow control of inflation. It was linked to diverse directives and policies of a real “economic Constitution” with these features:

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1. settlement of an internal market with free movement of commodities and capital; 2. neoliberal monetary policy; 3. selection of “regulated sectors”: the Common Agricultural Policy, the Common Fisheries Policy, the Common Transport Policy and a part of Industrial Policy; 4. search for intergovernmental consensus regarding the “general interest services” with the aim of progressive liberalization and privatization; 5. strict control of the policies of expenditure and incomes in the frame of the Stability and Growth Pact; 6. absence of a center of redistribution and of a “federal” capability of incomes and expenditures for a territorial equilibrium, limited to 1.27 per cent of the GNB; 7. absence of a juridical catalog of social rights and the deterioration of social rights recognized by the Constitutions of member states (Cancio 2004). Hence it is not the nation-state in general which is in crisis but, more precisely, the “Welfare Keynesian Nation State.” This state is being replaced by the “Schumpeterian Workfare State,” based on the “interest in promoting the innovation and the structural concurrence in the economic policy, and the interest in promoting flexibility and competition in the social policy” (Jessop 1999, 75). In this process the nation states are transformed “from a shock absorber between the needs of international markets, on one hand, and the (social) interests of citizens, on the other, to a fitter of these last interests to the needs of a market without borders” (Altvater and Mahnkopf 2002, 349). In the case of the EU, we can add that “European integration undermines state competences in matters such as market unity and regulation, the currency, and external security” but, simultaneously, “the response (to the ‘loosening of state control and the externalization of previously centralized functions’) depends on adaptation of states themselves” (Keating 2004, 380). Therefore, the states continue to be strategic players in the EU and, simultaneously, they are increasingly linked to the needs of this kind of “regionalization” in the contest of “neo-liberal globalization” against many social rights and social policies conquered by workers’ movements since the end of World War II. The problem is that this crisis of the “social” state also weakens the degree of internal legitimacy of the states and of the EU among significant layers of working people, victims of the attacks against social rights and public services but also of the large “gap” between the homogenization of economic policies in the EU on the one hand, and the absence of harmonization in social and fiscal policies on the other, opening the way to a social and fiscal dumping in the EU. This deficit of legitimacy is combined with another deficit in some states where their “uninational” self-definition denies the internal plurinational and pluricultural reality of the society, making the movements of federalization or secession in some states a real challenge to their “exclusive territorial sovereignty.” If this double deficit exists at

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the level of nation states, we can observe also an increasing “democratic deficit” in the EU due to the decision-making process at this level being far from the popular sovereignty and from the representative institutions of different states. These “deficits” were recognized by the European Commission and many governments in different documents, concluding that the absence of EU “positive integration” and democratization required the search for a solution. The first response was to adopt the discourse of “governance,” “a central buzzword of political speech in official publications and research papers from the offices of national governments and international institutions” (De Angelis 2005, 229): after the resignation of all the members of the European Commission in March 1999 (before the conclusion of the works of an independent commission on the political corruption inside this institution), in July 2001 the new EC presented the “White Paper on European Governance,” referring to “the rules, processes and behaviour that affect the way in which powers are exercised at European level, particularly as regards openness, participation, accountability, effectiveness and coherence. These five ‘principles of good governance’ reinforce those of subsidiarity and proportionality.” Nevertheless, this document, trying only to institutionalize the formal collaboration of business interests, trade unions, and some NGOs of the “civil society” in the process of deliberation and decision-making of the European Council and the European Commission over economic and social affairs, was a “fuite en avant” of the “eurocracy,” as the debate on the Draft Constitutional Treaty would prove. In short, the problem was that “their legitimation through efficient and apolitical governance appears more and more difficult as they face decisions that affect the lives of citizens in the most delicate (and political) fields, such as the welfare state, pensions, migration and education” (Porta and Caiani 2007). This “new” discourse appears also in a paper presented by the EC in October 2003, titled “Governance and Development,” related to cooperation with other countries, in which this concept is preferred to “democracy” or “human rights,” as is developed in its paragraph 4: “The real value of the concept of governance is that it provides a terminology that is more pragmatic than democracy, human rights, etc. In spite of its open and broad character, governance is a meaningful and practical concept relating to the very basic aspects of the functioning of any society and political and social systems.” During the debate in the 1990s, the problem of the combination of “deepening” and “enlarging” the EU was also central. Some experts have supported the thesis that the second aim would be an obstacle for the first (which is how it was seen by the US), but there are others who defend the alternative thesis because they have observed major progress in other past enlargements in five dimensions: first, in relation with the creation of markets and negative integration (the creation of common trade barriers against other countries in the first enlargement, the Single European Act in the second, and the Economic and Monetary Union in the third); second, on positive integration or amender policies of the market (regional policies, funds of cohesion and structurals, environmentals and

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Globalization and Regional Integration in Europe and Asia of equal opportunities); third, on the budgets of the EU, increasing the wall of expenditures and creating new resources); fourth, in the expansion of the authority and powers of European institutions (extending the vote by qualified majority and increasing the competences of the European Parliament); fifth, increasing the foreign and security competences of the EU. (Torreblanca 2002)

Nevertheless, this optimistic balance-sheet forgot the other consequences of every enlargement, especially the last one towards the east, this having created more economic, social, and geopolitical diversity and inequality in the Union and having made it harder to advance political integration and territorial solidarity because the Communitarian Budget will not be augmented. This view of a more heterogeneous EU is one of the reasons why the US and the United Kingdom favor an EU ever open to new members, after NATO’s enlargement towards the east, because this way of building “Europe” does not help the EU to become more than a “European market.” The enlargement to 27 member states in 2004 was also seen as a problem for France and Germany because they feared having less weight in the institutions of the EU. Therefore, the debate about the vote system in the European Council, the real center of strategic decision-making in the Union, was the key issue of the meeting in Nice in December 2001 and continued to be in the following “summits” and, finally, in the European Convention for the new Constitutional Treaty. The Draft Constitutional Treaty The Declaration of the European Council in Laeken, in December 2001, also recognized the “democratic deficit,” responding by organizing a European Convention with the task of building a large consensus among different governments, parliamentary parties, and lobbies of the “civil society” regarding the “new Europe,” the Draft Constitutional Treaty being the result of this elitist deliberation. The first aim of this text was to make it possible for the EU to take new steps towards a “single market,” with more economic issues adopted by a qualified majority in the European Council, with complete autonomy for the European Central Bank, this becoming the key institution for monetary and macroeconomic policy and for control of the accomplishment of the Stability and Growth Pact by all member states. The goal of this “federalization” of the control of economic policies was to create a better legal framework for competition with other “great powers” in the struggle for hegemony in the new “globalized” world. For all that, the constitutionalization of neo-liberal policies applied since the Single European Act of 1986 was a necessary means to defend against the resistances from below in, at least, some countries. Therefore, the conclusion was to add a third part in which all the treaties of the EU would be included. Another purpose of this draft is to take a new step towards an autonomous military power and to improve military capabilities, while still respecting engagements

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with NATO and, through this, with the US. Finally, the inclusion of a Charter of Fundamental Rights was an acknowledgment of the demands of the European Trade Unions Confederation (ETUC), though these rights would be recognized under the constrictions established by the first and third parts. The European elites were convinced that with this draft they could overcome the “democratic deficit” of the EU and give a “Constitution” to the peoples of “Europe.” Nevertheless, in spite of the support of the European Parliament for the draft, the evolution of public opinion in many countries towards this “eurooptimism” did not seem favorable. Each government, depending on the legal rules of the country, was free to choose the procedure of ratification and the first was Spain. In this case there are historic and specific factors—the historical association of “Europe” with “democracy” against the Francoist dictatorship, and “economic prosperity” against “autarchy”—that could explain the majority support for voting “Yes” in the referendum of February 2005 (but with less than a 50 per cent turnout). After this relative success, the majority “No” in France in May 2005 was a big surprise for the elites, who had not considered any alternative routes, no “Plan B.” This catastrophe, in one of the founding countries of the European Community, deepened the crisis of the EU’s legitimacy and made apparent its sources in the “social malaise” provoked by the crisis of the “European social model” and neo-liberal policies. In June 2005 the negative result of the referendum in the Netherlands was also a new expression of the crisis of the EU, with the consecutive paralysis of the ratification of the draft and the opening of new divisions among its members states. This crisis happened at a time of new economic differences: the Stability and Growth Pact was experiencing relative crisis because France and Germany did not respect the limit of a public deficit of no more than 3 per cent of GDP in the years 2002, 2003, and 2004, and the European Council in March 2005 decided its “flexibilization” of the labor market. Simultaneously, the debate over the new budget for an EU enlarged to 27 (now 29) member states for 2007–13 did not conclude with a substantial increase. In this context the asymmetries in the EU will become stronger in the next period. Crisis of the “New Europeanism” and “New Threats” The evolution of discussions among the European elites since the “No” result in France has resulted in a greater diversity of propositions for a solution to this crisis. The summit in Berlin in March 2007, on the occasion of the celebration of the fiftieth anniversary of the Treaty of Rome, provided a clear example of the present differences, with ambiguities over the new steps (“through the democratic interaction of the Member States and the European institutions”), but a proclamation regarding the need of the Union because “we are facing major challenges which do not stop at national borders. The European Union is our response to these challenges. Only together we continue to preserve our ideal of

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European society in future for the good of all European citizens. This European model combines economic success and social responsibility. The common market and the euro make us strong” (European Council 2007). In this declaration—with the single market and the euro as the core—it is not hard to verify again that the goal of the EU continues to be common competition with the other economic great powers in the struggle for control of different areas of the world. The problem is that the governments try to present this project as compatible with maintaining the “European social model” in a moment when this model is in crisis and its consequences are more visible, as is illustrated by the results of an official survey: since 2000 the inequalities of income between rich and poor in the EU are increasing, except in the Nordic countries. These deeper social inequalities are a real cause of disturbance among the elites: for instance, the German Minister of Finance, Peer Steinbrück, expressed the fear of “a loss of legitimacy of the market,” and the European Commissioner of Economy, Joaquín Almunia, qualified as “unsustainable” the unjust model of distribution of salaries and profits in the EU (El País, 26 March 2007). The contribution of the European Commission, “European Values in the Globalised World,” to the Meeting of Heads of State and Government in October 2005, acknowledged that there are 19 million unemployed in Europe and that this is … unacceptable. The combination of low employment rates and unacceptably high and persistent levels of unemployment in many Member States is the number one social problem we face. Young people, women, migrants and older workers (between 55–64) are the hardest hit – the employment rate for women, for example, is on average 13% lower than the rate for men …. The gap between the rich and the poor in the EU is considerable, both within Member States and between them. Over 25% of EU citizens live in regions whose output is below 75% of the EU average. For Europe as a whole, the gap between the richest fifth and the poorest fifth of the population is growing. One in five children live at risk of poverty and the risks are higher for the children of lone mothers and households where parents are unemployed.

Nevertheless, the solutions proposed for this problem are to “complete the internal market, including for services, telecoms, energy, and financial services …, to open third country markets for European producers,” and to implement at the national level “the agreed structural reforms and policies within the renewed Lisbon Strategy for growth and jobs,” that is, more liberalization and privatization, and “flexibility and adaptability” of people through active labor market policies. This orientation has been heavily criticized by the working group “European Economists for an Alternative Economic Policy” (EuroMemorandum Group 2006). We can read in the same way the paper “Global Europe: Competing in the World,” approved by the European Parliament in May 2007, with its aim of “the improvement of market access abroad for European exporters as a key part of

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increasing European competitiveness.” It is in the frame of this project that the EU is negotiating an “Economic Partnership Agreement” with the ACP (African, Caribbean, and Pacific) countries, though, now in discussion, many governments of the ACP do not accept the conditions established by the EU. The rhetorical proclamations in defense of the “social European model” are compatible not only with neo-liberal and neo-colonial policies but also, after the collapse of the Soviet Bloc and the events of 9/11, with the definition of new “threats.” How these “threats” are to be dealt with has been developed in a document titled “A Secure Europe in a Better World. European Security Strategy,” approved by the European Council in December 2003. The introduction of this document begins with the recognition of the role of the US: “The United States has played a critical role in European integration and European security, in particular through NATO. The end of the Cold War has left the United States in a dominant position as a military actor.” Only the addition—“However, no single country is able to tackle today’s complex problems on its own”—expresses the claim for European participation in this global domination because “As a Union of 25 states with over 450 million people producing a quarter of the world’s Gross National Product (GNP), and with a wide range of instruments at its disposal, the European Union is inevitably a global player.” The same document denounces the critical situation of hunger and malnutrition suffered by millions of people in the world, but its real interest emerges when it states that Europe’s energy dependence is a special concern because its imports come from the Gulf, Russia, and North Africa. Finally, there are many “key threats”: “terrorism,” “proliferation of weapons of mass destruction,” “regional conflicts,” “state failure,” and “organised crime” (including in this: “cross-border trafficking in drugs, women, illegal migrants and weapons accounts”). In this official agreement can also be found an adaptation of the “pre-emptive global war”: In an era of globalisation, distant threats may be as much a concern as those that are near at hand …. The first line of defence will be often be abroad. The new threats are dynamic …. Conflict prevention and threat prevention cannot start too early.

In this context The transatlantic relationship is irreplaceable. Acting together, the European Union and the United States can be a formidable force for good in the world. Our aim should be an effective and balanced partnership with the USA. This is an additional reason for the EU to build up further its capabilities and increase its coherence.

In short, we can conclude that the goal of being “the more competitive economy in the world” is combined with defining different threats from the non-Western

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world. All this is pushing for the need of a stronger Europe in political and military areas (we should note that article I-41 of the Draft Constitutional Treaty includes the engagement of member states in the development of their military capabilities) and also in its borders, building a “gated Europe” (Houtum and Pijpers 2007), especially ready for the strict control of “non European migration,” making the entry of non-Europeans into the Union dependent only on the demands of the European labor market. This is also the reason for progress made in justice and home affairs against people related with the “new threats.” The risk is, therefore, to build a European identity as a “counter concept” to the new “others,” the peoples of the “Muslim world” and of the “South.” This is illustrated also by the narrow link established in the mass media between “international terrorism” and the “Islamic world,” a key problem resulting from the drive to a restriction of basic rights in the EU and to new expressions of racism and xenophobia among the European peoples. As Zygmunt Bauman writes, “the continuum ‘migration-crime-security’ is giving to the states of Europe a new strong legitimacy in a new mixture of ‘surveillance’ and policy of migration” (2006); and the consequences are the expression of a “culture of fear” towards migrants and Muslims inside the EU, the erection of new walls of control in North Africa, and the militarization of the Mediterranean Sea as symbols of “fortress Europe’s” policy on the more unequal borders of the world. In any event, the efforts for building a common European identity continue to be confronted with divisions and incertitude about the future of a more heterogeneous and unequal EU and without a definition of its borders for its enlargement. The old metaphor that “Europe is an economic giant but a political turtle” is now only nuanced by some steps forward made in other areas. Hence the limits of the EU as a global power, because, as David Harvey notes (2003), its capacity to challenge the US continues to be confined to the spheres of production and finances, because the diversity of interests of different states inside the EU does not help to make greater progress in building a stronger European political power. Exemplifying these difficulties was the questionnaire sent by Angela Merkel, the President until the end of June 2007 in the Council of the EU, to the governments of all member states about how to re-open the constitutional debate. There were 12 questions in this document: the first was about returning to the classical method of treaty changes; the second, on maintaining part one of the Constitutional Treaty in a new treaty; the third, about changing terminology “without changing legal substance”; the fourth, on excluding the symbols of the EU; the fifth, on the proposal “not to include an article that explicitly restates the primacy of EU law”; the sixth, about replacing the Charter of Fundamental Rights by “a short cross reference having the same legal value”; the seventh, on maintaining the institutional provisions of the Constitutional Treaty; the eighth, on what other elements could be indispensable; the ninth, about including some “improvements/clarifications” in the fields of “energy/climate change or illegal immigration”; the tenth, about highlighting or not the Copenhagen criteria in the article on enlargement; the eleventh, on how “to address the social dimension of

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the EU in some way or the other”; and the twelfth, on the problem of “applying optin/out provisions to some of the new policy provisions set out in the Constitutional Treaty” (Merkel 2007). As we observe, this questionnaire addressed simultaneously different opinions existing among member states about the future of the EU. One of the key member states involved in the search for a new consensus is, of course, France: the election of Nicolas Sarkozy in France helped to open a new period of debate before the European Parliament elections in 2009, resulting in the “Treaty of Lisbon,” a new version of the Constitutional Draft but without the symbolic word “Constitution” and other secondary aspects. Nevertheless, the defeat in the referendum over this new Treaty in Ireland in June 2008 is opening a new crisis in the EU, deepening its “democratic deficit” because there is now no “Plan C.” If we add to this panorama the effects of the financial and global crisis since August 2007 on a more heterogeneous EU, the divergent views about the future of “Europe” will continue and the inequalities between different countries will be stronger. Therefore, other governments could support the route that British Prime Minister Gordon Brown, with his “hardheaded proeuropeanism,” is defending. As his economic adviser Ed Balls wrote: “Pro-European, because we recognise that we are stronger by cooperating with our partners. Hardheaded because we have the confidence to put our national interest first, to say ‘no’ sometimes and to argue our case where we believe Europe risks taking the wrong course” (2007). The risk of “neoprotectionist” alternatives to the financial crisis, in spite of the efforts of the EC and the ECB, is very real and the crisis of the euro is not excluded (Artus and Virard 2008). We must refer also to the “Framework for Advancing Transatlantic Economic Integration between the European Union and the United States of America,” adopted by US President George W. Bush and President of the European Council Angela Merkel in April 2007. In this document there is a common belief that “deeper transatlantic economic integration and growth will benefit our citizens and the competitiveness of our economies” because they are “each other’s most important economic partners, reflecting historical ties as well as a wide range of common fundamental values.” The document also refers to the creation of a Transatlantic Economic Council, apart from many details about the Work Programme of Cooperation, including an annex about “reducing regulatory burdens.” It is not hard to regard this new step as a common answer to the “Asian dynamism” through integral “liberalization” (Iñiguez 2007) between both partners, in spite of the problems with the dollar and the euro as competitors now and, more, in the future. In any case, the perspectives are of a “variable geometry,” having in the “Euroland” states (that is, the member states having the euro as the single currency) the core of the EU and, around them, different states and methods of cooperation. The EU would continue to exist as a “composite polity” with “multilevel governance”: the intergovernmental level; the European institutions—European Commission, European Central Bank, European Court of Justice, European Parliament, and

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the Foreign Minister; the transversal cooperation among regions, and the lobbies organized at the European level (ERT, UNICE, ETUC, ONGs), but with different ways of cooperating and building new consensuses about how to be stronger in a globalized world. Nevertheless, the role of the executive states and the business interests in the Union will probably continue to be the more decisive. In this context, after the experience of France, the Netherlands, and Ireland, and with the crisis of the “European social model,” the democratic deficit and the legitimacy problems of the EU would not be resolved. All that will make the crisis of the EU deeper, leaving it, inside, as a “single market” against social rights and, outside, as an association of nation states, associated for their common trade interests against the rights of the peoples of the South and for competition with the other “great powers” in the world. The paper “Global Europe: Competing in the World” is a clear indicator of this triple goal. Regions and Nations The existence in the EU of a process of decentralization within many of the states is an undeniable fact. The Treaty of Maastricht recognized this by creating the Committee of Regions, composed of representatives of regions and local entities from all the member states, and with the ambiguous principle of “subsidiarity.” The Committee does not have a major political major role but it is the “agora” of dialogue between parties searching for new ideas of federalism and sovereignty. Different forms of transborder cooperation between regions are also developing, the network of the “Four Motors of Europe” (Baden-Württemberg, Catalonia, Lombardy, and the Rhône-Alpes region) being one of the more well known processes; other experiences are related to cultural or national affinities, as in the case of Euskadi and Aquitaine. In the 1990s in Belgium and the United Kingdom, and recently in Germany, there have been new processes of federalization and constitutional reforms, linked to national and cultural diversity or to regional demands for more participation in the decisions of the EU. These debates have developed simultaneously with the creation of new states in Eastern Europe, the new period of autonomy in Northern Ireland, and the process of reunification of Cyprus. Many of these reforms do not challenge the sovereignty of nation states, but some, such as the Basque or the Scottish, do. The plurinational and pluricultural reality of many states, particularly the Spanish state—where there is a strong nationalist movement in the Basque Country—is an additional problem for the historical nation states of Europe. The answer to this issue in the Draft Constitutional Treaty was negative towards any secessionist alternative, as was exposed in article 5.1: The Union shall respect the equality of Member States before the Constitution as well as their national identities, inherent in their fundamental structures, political

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and constitutional, inclusive of regional and local self-government. It shall respect their essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security.

This article has been included in the new Treaty of Lisbon because the preservation of “territorial integrality” as a central feature of the formal sovereignty of the states is a deeply-rooted principle of the EU. Nevertheless, it did not restrain the involvement of some member states in the evolution of the crisis of Yugoslavia and their support for the constitution of new states, as in the case in Kosovo and its “supervised independence,” based more in geopolitical arguments than in international norms respecting the rights of national minorities (Kymlicka 2007). In any case, the existence of the EU continues to be seen by nationalist movements in the Basque Country, Catalonia, and Scotland as a political opportunity providing a structure that weakens the centrality of historical nation states and that could help in the future in the constitution of new states without them leaving the Union. This has been explicitly defended by the Nationalist Basque Party, the nationalist Republican Left of Catalonia and the Scottish Nationalist Party (Dardanelli 2005). Through this, there is an evolution from the discourse of a “Europe of Regions” to another of the “Europe of the Peoples” including nations without a state. As Michael Keating writes: States remain the obstacle to utopian visions of a Europe of the Peoples, but some have adapted to the new pluralism more than others …. Europe creates spaces for more diversity, but many of its institutional and policy initiatives assume a homogeneous sub-state level of authority and identity. An intergovernmental EU, with the states taking a restrictive line on what their sub-state governments can do, will place a premium on becoming states even if this should be the second choice of the nationalities themselves. (2004, 383)

Another problem in the EU continues to be the absence of consensus about its borders and the limits of its enlargement because, historically, the idea of “Europe” has been developed in relation with “others”: the “Orient,” the “Soviet Bloc,” or the “South.” Turkey and Russia are now the symbolic issues of this debate: the former asked to be a member of the European Community in the same year as Greece, in 1959; since then, much has changed: after the collapse of the Soviet Bloc and the strength of “Muslim culture” in the country, added to its demographic magnitude, Turkey has become for some European elites an obstacle to political and “cultural” European integration. The latter continues to be seen as a threat by Eastern European countries and as a rival by the United Kingdom, France, and Germany. The public position of the new President of the French Republic, Nicolas Sarkozy, on these two countries is clear: he does not consider Turkey to be part of the continent and he continues to see Russia as exterior to Europe in the east (Sarkozy 2007). This opinion will probably be a majority one in the future in the EU, in spite of differences between this and the US view of Turkey (a member

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of NATO and an ally of the US in one of the more unstable geopolitical regions of the world) and of the energetic dependence of the EU on Russia, a state which is rebuilding its economic, geopolitical and military power. Finally, there is another big challenge to the EU and its member states: the presence of an increasing number of migrant workers coming from “non communitarian countries” which have been living for many years in Europe but do not have all the basic rights as citizens. There are, of course, different legislations in relation to these people but, generally, they are excluded from the political life and, when and where they are citizens, they are not necessarily “integrated” in the society: the convergence of political and cultural marginalization with the “precarization” of their working and living conditions and, in many cities, their spatial segregation, can be regarded as the origins of the riots by young people who were born in Europe but are still members of migrant families and often seen as “foreigners” by the “natives,” as happened in France in November 2005 (Pijl 2006). This is another example of the crisis of the “Welfare Keynesian National State” in its different dimensions: social, national, and cultural; we can add to the increasing “cleavage” of Europeans versus “non communitarian” people the efforts of the militarization of the borders of the EU that “engender what they are supposed to control, namely illegal or semi-legal irregularities” (Houtum and Pijpers 2007, 302), as well as the long list of deaths in the Mediterranean. The “return” directive against illegal immigration, approved by the European Parliament in June 2008, in the context of the economic crisis, is a new critical step in the wrong direction. Conclusions Following this account of the different phases of European integration and of the factors influencing the evolution of the role of nation states in this process, we may draw some provisional conclusions. First, “European integration” has been a conscious project of the elites of the major countries of the present European Union, linked to rebuilding capitalism in this continent after World War II and to the need to oppose a strong internal solidarity against the “soviet threat.” Second, this entire process was developed in the context of Western political and military dependence on the United States as the new hegemonic Western power since the 1940s and becoming in the 1990s the only “global superpower.” Third, the “new Europeanism” emerging in the middle of the 1980s was the expression of the will of greater autonomy in relation to the US in a period of global neo-liberalism. That project, supported by European business interests and the major parties, helped to confound many people identifying the “unity” of Europe with the needs of neo-liberal policies against social rights, public services, and workers in general. After the Single European Act in 1986 and the Treaty of Maastricht in 1992, the adoption in 1997 of the Stability and Growth Pact and

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of the single currency, the euro, in 1999 were successive steps forward in this project. Fourth, the collapse of the Soviet Bloc opened the EU to new member states and to the extension of neo-liberal policies towards the East but, at the same time, these events made the EU more heterogeneous and asymmetrical in relation to its political integration. These inequalities made more visible the distance between “negative integration”—through the adoption at the European level of neo-liberal economic policies—on the one hand, and the absence of “positive integration” through overcoming the “democratic deficit” of the EU, on the other. Fifth, the US-led war in Iraq, initiated in March 2003, provoked great division in the EU over differing views regarding its relation to the “American friend’s” strategy of “preventive war”: some governments, such as France and Germany, were against the decision, and others, such as the governments of Britain, Spain, Italy, and the eastern countries, were in favor. After this crisis, the geopolitical differences remained but, as the final agreement on the installation of the “antimissile shield” in Eastern Europe by the US and the French contribution to the NATO military intervention in Afghanistan proves, a new transatlantic consensus is coming together. Nevertheless, the financial crisis and its “domino effect” could open new geo-economic differences, not only with the US but also inside the EU: the “national-state” neo-protectionism is a real risk in this context. Sixth, the Draft Constitutional Treaty was the expression of the need for new steps forward in the political management of the process of building a “consensual European imperialism” (Tombazos 2004), and being able to compete better with the other great powers in the domination of the world. This draft respected the engagements with NATO and the US in geopolitical and military areas, in spite of the differences of some countries with the American neoconservative right. The aim of this draft was the relative enforcement of European institutions and, overall, the federalization of monetary policy by the European Central Bank, as well as the agreement over the double vote system (states and population) in the European Council among all member states in an uncompleted enlargement. The result would not be a “super state” but a “federalization” in some pillars related not only with the monetary, commercial, and economic goals or justice and home affairs, but also with foreign and security policies, introducing progressive consensus by a majority of member states. Seventh, the ”No” result in the referenda in France and the Netherlands created a major crisis among the elites of the EU because they had not been able to prevent this result: furthermore they had no “Plan B.” This provoked a debate over the reasons for the majority “No,” making more visible the democratic deficit and the crisis of legitimacy of the EU, identified by many European citizens as the cause of the crisis of the welfare state and attacks against social rights. The new Draft Reform Treaty (maintaining the old Draft Constitutional Treaty, but with more “variable geometry” and an “economic government” for the “Euroland”) was a means to avoid new referenda in France and the Netherlands, but the defeat of this

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new Treaty in Ireland in June 2008 exemplified the increasing democratic deficit of the EU. Eighth, the role of the European Council is key in the process of European integration, which means the intergovernmental level is central to the future of the EU. The roles of the European Commission, the European Central Bank, and the European Court of Justice will also be important, and tightly linked to business interest, but the European Parliament will continue to play a secondary role as will the national parliaments. The EU, therefore, is a “composite polity,” in which its member states would in some areas accept the “constitutional discipline” characteristic of federalism, without becoming federal states (Weiler 2000). The geo-economic, geopolitical, and military divisions are real but the need to achieve a single market, with more “consensual” political institutions being able to protect their common commercial interests against other economic powers in the context of the financial and global crisis, would probably result in some “enforced cooperation,” at least between the members of “Euroland.” Ninth, the cession of sovereignty upwards (to the EU in economic, trade, and currency areas; to NATO in the military area) and downwards (to regions, by decentralization or federalization) by some nation states introduces a process of loss of centrality for this “model” of state. At the same time, the democratic deficit of the institutions of the EU and the weakness of a European identity associated with a “social model” now in crisis, on the one hand, and the resistances of the nation states to the recognition of different national and cultural identities, on the other, do not help in offering better “plurinational” alternatives to the crises of these states. Therefore, the “nation-state” identification for many people in the EU continues to be stronger than with “Europe” and regions, except in the cases of strong nationalist movements as in the Basque Country, Scotland, or Belgium, where the international recognition of the independence of Kosovo is seen as a contradiction with the refusal to respect the right to self-determination inside the Western states. In any case, the “nation-state” identification will probably be reinforced by xenophobic and racist movements and parties in many countries of the EU against migration, associated many times and in many cases with “international terrorism,” “delinquency,” and the loss of jobs; the financial crisis and its internal effects could be another factor in promoting this process. Tenth, if there is no alternative in the EU to the replacement of the nation states, that does not mean that the “European identity” could not make some progress in the future, especially as an answer to new threats, as the document “A Secure Europe in a Better World” proposes, and with regard to a new consensus over the exclusion of Turkey and, of course, Russia. The risk is that this “Europe,” in spite of its “soft power,” would continue to be linked to a “Western” identity (as the “Framework for Advancing Transatlantic Economic Integration between the EU and the USA,” adopted by the presidents of the EU and the United States in Washington in April 2007, attests) and, implicitly, to the discourse of the “clash of civilizations” directed towards the “Orient” and the “South.”

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In short, the future of overcoming or not the crisis of the nation states in the EU is related to the difficulties for building European capitalism and a European state through the “Hayekian way,” as Peter Gowan notes (2006), and also with the evolution of resistances to more federal and pluralist alternatives inside these nation states. In any case, the traditional association between nation, state, and citizenship as a condition for the recognition of all fundamental rights is a nondemocratic model and an obstacle for building a European “demos” and diverse “demoi” in all the states of the Union, because it does not recognize the millions of people who are not identified with the historical nation states but who are living and working in Europe. Hence the proposal made by the network for the “Charter for Another Europe,” in the framework of the European Social Forum process, of another way of building a concept of European citizenship based on the recognition of all fundamental rights for every person living in Europe. References Altvater, E. and Mahnkopf, B. (2002), Las limitaciones de la globalización. Economía, ecología y política de la globalización (México: Siglo XXI). Artus, P. and Virard, M.P. (2008), Globalisation, le pire est à venir (Paris: La Découverte). Balanyá, B. et al. (1999), Europe Inc. Regional: Global Restructuring and the Rise of Corporate Power (London: Pluto Press). Balls, E. (2007), “Britain and Europe: A City Minister’s Perspective”, available at . Bauman, Z. (2006), Europe: An Unfinished Adventure (Cambridge: Polity Press). Blackburn, R. (2005), “Capital and Social Europe”, New Left Review, 34. Cancio, J. (2004), “La Constitución económica en el proyecto de la Convención”, in X. Pedrol and G. Pisarello (eds), La ilusión constitucional (Barcelona: El Viejo Topo). Dardanelli, P. (2005), Between Two Unions: Europeanisation and Scottish Devolution (Manchester: Manchester University Press). De Angelis, M. (2005), “The Political Economy of Global Neoliberal Governance”, Review, 28(3): 229–57. EuroMemorandum Group (2006), “A Democratic Economic Policy Alternative to the Neo-liberal Transformation of Europe”, available at . European Commission (2001), White Paper on European Governance, available at . — (2003), “Governance and Development”, available at . —— (2005), “European Values in the Globalised World”, available at .

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—— (2006), “Global Europe: Competing in the World”, available at . European Council (2003), “A Secure Europe in a Better World: European Security Strategy”, available at . —— (2007), “Declaration on the Occasion of the Fiftieth Anniversary of the Treaty of Rome”, available at . Gowan, P. (2005), “Los orígenes del malestar atlántico”, Viento Sur, 79: 81–99. —— (2006), “La Europa de Hayek y su deriva hacia la incoherencia, in F. Duque et al., Buscando imágenes para Europa (Madrid: Círculo de Bellas Artes). Harvey, D. (2003), The New Imperialism (Oxford: Oxford University Press). Houtum, H. van and Pijpers, R. (2007), “The European Union as a Gated Community: The Two-faced Border and Immigration Regime of the EU”, Antipode, 39(2): 291–309. Iñiguez, D. (2007), “Hacia una Asociación Económica Transatlántica”, Real Instituto Elcano, Documento de Trabajo, 22 (30 May). Jessop, B. (1999), Crisis del Estado de Bienestar: Hacia una nueva teoría del estado y sus consecuencias sociales (Bogotá: Siglo del Hombre editores). Keating, M. (2004), “European Integration and the Nationalities Question”, Politics and Society, 32(3): 367–88. Khalfa, P. (2007), “Traité modificatif de l’UE: inaceptable par sa méthode et par son contenu”, Europe solidaire sans frontières, available at . Kymlicka, W. (2007), “The Evolving Basis of European Norms of Minority Rights: Rights to Culture, Participation and Autonomy”, in Omid Payrow Shabani (ed.), Multiculturalism and Law: A Critical Debate (Cardiff: University of Wales Press), pp. 235–62. Merkel, A. (2007), “Questionnaire in View of the Bilateral Meetings with Focal Points to be Held between 23 April and 4 May”, available at . Offe, C. (2000), “Democracia y Estado del bienestar: un régimen europeo bajo la tensión de la integración europea”, Zona Abierta, 92–3. Pijl, K. van der (2006), “A Lockean Europe?”, New Left Review, 37. Porta, D. della and Caiani, M. (2007), “Europeanization from Below? Social Movements and Europe”, Mobilization: An International Quarterly, 12(1): 1–20. Samary, C. (2003), “La ‘nueva Europa’ aspira a ‘otra Europa’”, Viento Sur, 71: 29–36. Sarkozy, N. (2007), “Making France a Power for the Future”, National Interest, April 17, available at . Tombazos, S. (2004), “L’Union Européenne et le nouveau défi américain”, Contretemps, 9: 55–64.

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Torreblanca, J.I. (2002), “La Unión Europea : entre el activismo judicial, la globalización económica y los procesos de ampliación. ¿Un tren a ninguna parte?”, in J. de Andrés, P. Chaves, and F. Luengo (eds), La ampliación de la Unión Europea (Barcelona: El Viejo Topo). Weiler, J.H.H. (2000), “Epilogue: Fischer: The Dark Side”, in C. Joerges, Y. Mény, and J.H.H. Weiler (eds), What Kind of Constitution for What Kind of Polity? Responses to Joschka Fischer (San Domenico de Fiesole: Robert Schuman Centre for Advanced Studies).

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Chapter 3

Globalization, Transnational Corporations, and Human Rights1 Chinsung Chung

International Economic Agreements, Transnational Corporations, and Human Rights It is difficult to link the responsibilities of transnational corporations (TNCs) with discussions regarding multilateral economic agreements, such as those monitored and administered by the World Trade Organization (WTO), regional/sub-regional organizations, and bilateral economic agreements, which after all, are signed by, and therefore solely bound on states. In other words, the practice of legally and logically linking the discussion of TNCs, inter-state economic agreements, and human rights has rarely been pursued. However, an apparent fact is that international economic agreements expand the activities and benefits of TNCs themselves, without much regard for the impact on human rights during this process. This paper aims to analyze the human rights dimension in the international economic agreements in light of the role and benefits of TNCs. The main mechanisms facilitating globalization are multilateral, regional, and bilateral economic agreements. Multilateral and regional agreements concluded by international organizations, such as the WTO, have become an issue of human rights beyond an economic one.2 Bilateral economic agreements represented by free trade agreements (FTAs) are not new in the field of liberalization of trade and investment. During the last 25 years, the free movement of trade and capital has been governed by the terms under the Uruguay rounds of the 1980s and the 1990s. Currently, the Doha round of the WTO seems to be heading towards an 1  This chapter is a revised version of “Bilateral and Multilateral Economic Agreements and their Impact on Human Rights of the Beneficiaries”, a working paper submitted to the United Nations Sub-Commission on the Promotion and Protection of Human Rights in 2006. 2  In 2006 the Working Group on the Right to Development stated that a state’s international human rights obligations in all its multilateral and bilateral trade and development engagements is a central prerequisite of the right to development. The Working Group continued to state that the necessity to develop further a rule-based, open, and non-discriminatory trading system is a vital step for the implementation of the right to development (United Nations Commission on Human Rights 2006a, Paras 41, 46).

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inconclusive end. These delays and other pressures have newly encouraged many countries to go in for FTAs.3 The International Monetary Fund (IMF) and the World Bank (WB) are considered as specialized agencies of the UN system, even though they have their own independent and autonomous governance. On the other hand, the WTO as a rules-based trade regime with its own dispute settlement mechanisms is not a part of the UN system. Furthermore, many regional and bilateral economic agreements do not have their own control mechanisms. There is little space for human rights in these arrangements. Particularly, FTAs are especially free from any international regulation, as they are part of neither the WTO nor the UN. In other words, they do not have a regulatory mechanism of an institutional nature.4 Given the lack of discourse regarding these issues as well as their remoteness from public scrutiny, this report will focus on the ever-expanding FTAs with the larger question of the WTO. TNCs are undoubtedly at the forefront of globalization. The rights of these firms—their ability to operate and expand globally—have increased greatly over the past generation as a result of international economic agreements and domestic liberalization (United Nations Commission on Human Rights 2006b). While acknowledging the contributions made by the TNCs, the globalization of these non-state actors and the various economic agreements in which they are involved, are not met with proper attention regarding their legal accountability as well as their obligations to ensure respect for human rights. These include, among others, the rights to work, livelihood, food, health, water, and preserving traditional knowledge and women’s rights. Despite the efforts of the UN to clarify the fundamental principle of nondiscrimination in the fields of human rights laws and trade laws and to decide the norms of TNCs in the context of globalization, the gaps between these two legal regimes have not been bridged and the legal responsibilities of the TNCs are yet to be determined. In this situation, instead of strict legal discourse, a more holistic approach from not only a legal but also political, economic, and social viewpoint is needed.

3  Especially after the failure of the WTO to successfully negotiate in Cancun, the European Union (EU) and the United States have publicly announced that they would proceed with FTAs and regional economic regimes if the WTO could not make any progress in Hong Kong. 4  The 2005 World Summit Outcome under Trade affirmed; “27. A universal, rulebased, open, non-discriminatory and equitable multilateral trading system as well as meaningful trade liberalization, can substantially stimulate development worldwide, benefiting countries at all stages of development. In that regard, we reaffirm our commitment to trade liberalization and to ensure that trade plays its full part in promoting economic growth, employment and the development of all.” The outcome document makes no direct reference to FTAs (United Nations General Assembly 2005, Para. 27).

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Analyzing human rights issues in the international economic agreements related with the responsibilities of the TNCs, this chapter refers to reports and working papers submitted in the various parts of the United Nations, and the written statements of the related non-governmental organizations (NGOs) as well as the books and articles on the issues. Before beginning the discussion, it is necessary to define international economic agreements. There are no multilateral contracts between governments and companies, but some bilateral contractual agreements between a company and a government. In this chapter, however, both multilateral and bilateral economic agreements are defined as forms of treaties between states, and the international economic agreements include both trade and investment agreements. Globalization and Multilateral Economic Agreements Globalization and Human Rights Globalization is defined as a process which embodies a transformation in the spatial organization of social relations and transformation (Held et al. 1999, 16). Regardless of ample debates over the effects of globalization, and one over its benefits versus its harmful aspects, the present chapter is based on the following premises; (i) current globalization has the characteristics of unevenness, which benefits some and disadvantages others; (ii) globalization is a “process,” the future of which is not determined; (iii) globalization is a purposeful project, which is the product of human agency, historical contingency, and contestable political choice (Marks and Clapham 2005, 180–84). This means that globalization has serious consequences for human rights on the one hand, though international communities could transform the process of globalization on the other. Human rights can be tools for this transformation of globalization. Globalization has generated numerous positive effects in terms of higher living standards and in some parts of the developing world it has provided opportunities for unprecedented rates of poverty reduction (United Nation Commission on Human Rights 2006b, Para. 13). However, it has also brought negative effects such as inequities, impoverishment, disharmony, marginalization, exploitation, and dependency. It has continued along the existing fault lines of class, gender, and community while widening the gap internationally between countries. Globalization has resulted in gross human rights violations for millions of workers, peasants, and small farmers, Dalit people, ethnic minorities, and indigenous people. There is another unequal aspect of globalization to be considered. The global market, especially, the financial market, has accelerated instability among the people of small countries and has even affected the autonomy of governments. In this globalization of finance, production, and trade in goods and services, labor markets remain closely guarded, especially in the richer countries, resulting in mass populations of irregular migrant workers, and thus, various forms of human

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rights violation against them. Most multilateral and bilateral economic agreements with a highly inclusive nature, covering vast numbers of human lives, do not discuss the liberalization of labor markets. One of the characteristics of contemporary globalization, in addition to its magnified extension, intensification, acceleration, and impact (Marks and Clapham 2005, 180–81), is the growing importance of non-state actors. Among them TNCs are the main beneficiaries of international economic agreements. The General Agreement for Tariffs and Trade (GATT) and WTO In the aftermath of World War II, the international community pushed for a new world economic era by expanding effective economic activities transbordering country barriers. As a result, the General Agreement for Tariffs and Trade (GATT) was established in 1947 in order to reduce tariffs and bring down international trade barriers. The agreement was based on two principles of non-discrimination: the most-favored-nation (MFN) principle and the national treatment principle. The principle of non-discrimination, while initially aiming to provide a level playing field on which developing countries would have ample opportunity for economic development, has been utilized rather as a protective measure to ensure certain economic activities for the developed nations. There is an increasingly large debate over such instances within WTO negotiations. The creation of the WTO represented a veritable revolution not only in the scope of issues but also with regard to the ramifications of failure to conform to this regime through its binding dispute settlement mechanisms. While the GATT was provisional and only applied to goods, with the focus of the agreement for most of its existence largely on border measures, the WTO began to treat new issues such as intellectual property rights (IPRs), government procurement, and investment measures. In bringing these issues within the purview of the international tradeenforcement regime, not only did the WTO assume tremendous powers, it also raised broad questions about human rights (Oloka-Onyango and Udagama 2000). Civil societies pointed out environmental, social, and human rights deficits, and discussions on the negative impacts of economic globalization on the enjoyment of human rights began at the various UN agendas. The WTO Ministerial Conference in Seattle in 1999 eventually showed that the trading regime of the WTO produced negative effects on the poor, especially in developing countries and that the WTO legal framework to a certain extent restricts economic and social policies (Zagel 2005, 27). The Doha Round (2001) was stalled, and in Cancun in 2003 the developing countries critically challenged the system demanding far greater concessions than were being offered. As negotiations for the full implementation of the WTO system remained slow and complicated, many countries turned to alternate, less time-consuming, and more effective means of establishing open trade relations with other nations. These efforts have paved the way for the creation of various regional economic arrangements, such as the North Atlantic Free Trade Arrangement (NAFTA), the

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Central American Free Trade Agreements (CAFTA), the Free Trade Agreement of the Americas (FTAA), and the US arrangement with Africa. As a more effective route to free trade, nations have taken up the practice of establishing bilateral economic arrangements, widely known as free trade agreements (FTAs), most of the terms of which abide by the same principle of non-discrimination. Bilateral Economic Agreements Bilateral Treaties for the Promotion and Protection of Foreign Investments (BTPPIs) BTPPIs are agreed between states but confer rights on individuals and include mechanisms for the solution of disputes arising between foreign investors and the state receiving the investment. Failure by a state to comply with any obligation entered into is liable to make it responsible for any damages caused to an investor. The principle elements of BTPPIs include: (i) foreign investments enjoy the most favorable treatment; (ii) national treatment; (iii) most favored nation clause; (iv) absence and even prohibition of performance requirements; (v) compensation in case of expropriation or other measures of equivalent effect, and so on.5 All these elements are applied to FTAs. Bilateral Agreements on Intellectual Property The trade-related aspects of intellectual property rights (TRIPS) agreement defines how products can be protected from piracy. A major criticism then has been that in its current form, intellectual property rights regimes like TRIPS serve to stifle competition and protect one’s investments and profits from it in that way. For poor nations it makes developing their own industries independently more costly, if at all possible. The Working Group on the right to development, 2006, recognized that the protection of intellectual property should minimize its negative impact on individual or national access to research and development (United Nations Commission on Human Rights 2006a, Para. 52). The impact of the TRIPS agreement on increasing poorer communities’ access to medication continues to be controversial. Furthermore, indigenous knowledge that has been around for hundreds, if not thousands of years in some developing countries has been patented by large companies, without consent or prior knowledge from indigenous communities. People then find that they have to “buy” back that which they had already known and used freely. All these problems are worsened in most of bilateral agreements dealing with the same matter. For example, bilateral 5  Alejandro T. (2006), “Transnational Corporations and Regional, Sub-regional and Bilateral Free Trade Agreements”, pp. 2–3. This article was provided to the authors by email.

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treaties remove the remaining rights of states adhering to TRIPS to exclude plants and animals from their patent laws (United Nations Commission on Human Rights 2006a, 7–8). Bilateral Free Trade Agreements (FTAs) FTAs had initially been proposed by mostly European countries as exceptional clauses from the GATT system which included most-favored-nation and national treatment.6 These bilateral economic agreements have recently come to prevail anew. While the WTO and regional agreements appear to have been stalled, as a continuation of the process initiated by the BTPPIs, a number of developed countries have changed direction to take up bilateral FTAs. While the FTAs decided at “GATT 1947” liberalized “trade of the products,” which focused on the removing tariffs, the new FTAs of the 1990s cover almost all economic activities including not only access to the products’ markets but also agricultural products, medicines, services, education, intellectual property rights, and more. They also include deregulation measures, the liberalization of trade in services, and the implementation of competition policies. In this sense FTAs are agreements for inclusive economic integration rather than just free “trade” agreements. FTAs can often impose more stringent requirements across a wide range of areas than WTO agreements. The Working Group on the right to development emphasized in 2006 that bilateral and regional trade agreements should be consistent with TRIPS and other WTO agreements, and that they should not impede the ability of states to make use of flexibilities and safeguards provided in TRIPS and other WTO agreements (United Nations Commission on Human Rights 2006a, Para. 54). In addition to this inclusive nature, FTAs also have political, military, and security implications. In many cases FTAs arise from political commitments entered into by the governments. Especially after 9/11, FTAs began to prevail where neo-conservative economic policies are closely related with security issues.7 With which states the FTAs would be made, or the priorities among the states in establishing the agreements became serious concerns for Governments in many countries dealing with complicated diplomatic relations. Each FTA is different, but mostly all the benefits that the foreign investors enjoy from BTPPIs are applied to FTAs, furthering inequality between the richer and poorer countries. Because of the inclusive nature of FTAs and economic inequality among the countries, the influence of FTAs is enormous and the room for overlap and conflict between trade laws and human rights concerns increases.

6  Article 24, Para. 8(b) of “GATT 1947” includes “free trade zone,” where all trades are liberalized by removing all barriers of tariff and “other trade restrictions.” 7  The United States government has tried to establish FTAs with militarily allied nations, which would strengthen political and military alliances (Ikenberry 2004).

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As was the case with the WTO, TNCs have a considerable amount of influence within various forms of bilateral economic arrangements. Transnational Corporations in International Economic Agreements As with globalization as a whole, TNCs have both positive and negative aspects in terms of human rights. They may induce change and contribute to an enhanced human rights environment in the states where they operate, and they may raise living standards and create better social and economic conditions in the host countries through investment, employment creation, transfer of technology, just and equitable working conditions, and stimulation of economic growth and community development (Reinish 2005, 63; United Nations Commission on Human Rights 2006a, Para. 56). However, in many cases the practices of TNCs have generated various human rights violations, which have become the focus of much recent human rights discourse. Despite the importance of the role of TNCs in globalization and their enormous influence, the question of whether non-state actors are more than just indirect addressees of human rights norms which are directly addressed to states is not settled. In traditional international law only subjects of international law can be addressees of international obligation, and TNCs would be excluded from the obligation. However, in many cases the international legal order wants to confer a certain status upon non-state actors by directly giving them rights and obligations (United Nations Commission on Human Rights 2006a, 69–70). In this situation, TNCs have not been seen in the formal process of international economic agreements, even though they are the most important beneficiaries. The fact that TNCs are the most important beneficiaries can be traced indirectly to the manner of the TNCs’ informal participation and their rights in the contents of the agreements. Participation of TNCs in the Negotiation Process The most direct way in which TNCs can advance their interests is through participation in “expert meetings” which are integral to negotiations, or through attending WTO ministerial conferences as part of a national delegation. More informally, lobbyists of sectoral business associations and TNCs meet negotiators before and after WTO negotiation sessions, and representatives of individual TNCs often meet with trade officials. There are also many indirect contacts and influences between business and politicians which can facilitate support for TNC positions. The boundaries between government and big business can become blurred by the participation of politicians on company boards and advisory committees. In the reverse, former employees and entrepreneurs who engage in a political career can, by doing so, create a channel of informal influence. TNCs also have the capacity to engage in expensive public relations and advertising. Donating to political parties

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and election campaigns is another lobbying method which can have a direct influence on voting and, therefore, policy outcomes (Stichele 1998). Rights of TNCs in the Agreements While the trade principles have traditionally dealt with discrimination against goods, the inclusion of rules concerning trade in services and intellectual property protection has extended such protection to individuals and corporations (Report of the High Commissioner 2003, Para. 25). Thus, international economic agreements are agreed between states but confer rights on individuals, as discussed before. It is commonly stated that investment agreements establish a set of investors’ rights (Report of the High Commissioner 2003, Para. 24). TNCs acquire all the favors from investment rules. The High Commissioner summarized those rights as: protection against discrimination, market access, prohibition on some state actions, and protection against expropriation of an investment. More specifically: (i) TNCs acquire benefits from two forms of non-discrimination—most-favorednation treatment and national treatment; (ii) once TNCs have entered the domestic market, states undertake to treat them without discrimination; (iii) despite these favors, there is no performance requirement for protecting the local economy from the foreign investors such as protection of the environment, limitation of exporting foreign currency earnings, incorporation of technology, and so on, and in some cases they are expressly prohibited. While Trade Related Investment Measures within the WTO forbids performance requirements only in the trade of goods, most of FTAs are more inclusive in this matter where the receiving states are in worse condition;8 (iv) investment agreements protect investors against expropriation unless expropriation is subject to compensation by the host government for the loss of the investment (Report of the High Commissioner 2003, Para. 24). A breach of these treatments, including expropriation, produces liability on the part of the receiving state. There are two forms of mechanism for resolving disputes: a state-to-state mechanism and an investor-to-state mechanism. Investors are allowed to bring a complaint against a state party through recognized arbitration processes such as the International Center for the Settlement of Investment Disputes (ICSID)9 or the UN Commission on International Trade Law (Report of the High Commissioner 2003, Para. 26). Increasingly investors are claiming expropriation 8  For example, the Uruguay–Canada agreement extends the prohibition of performance requisites to services and the transfer of technology (Europe Center–Third World and American Association of Jurists 2004a, 3). 9  Since the ICSID was created by the World Bank in 1965, the number of member states has increased. The number of disputes registered has also been growing, and in 2004 alone 31 new cases were registered. An increasing number of investors have become aware of new international remedies that are available, allowing them to bypass local courts and take control of their own international proceedings (Sand 2006, 128–9). The WTO also has a Dispute Settling Body.

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of an investment when the government introduces new legislation (for example to protect the environment) which lessens the value of the investment.10 Challenges to the Process of Negotiation The Needs of Investment of the Poorer States Because of the eagerness for attracting foreign investment, poorer states have mostly conducted negotiation processes in a rushed manner without carrying out systematic and comprehensive studies on the impact of the FTAs, especially from social, environmental, cultural, and even human rights perspectives. There are criticisms that parts of the agreements are unconstitutional in some countries. In this “race-to-the-bottom” to attract investment (Report of the High Commissioner 2003, Para. 41), FTA processes are often dominated by the party of the developed countries. For instance, an investor from any country could buy a piece of land and use it even as a nuclear waste dump, and the government of the host country could do nothing to stop it for fear of being accused of covertly restricting trade or international investment (Europe Center 2004a). In a bilateral setup, the bargaining power of the developing countries, especially the least developed countries, is less than if they were to negotiate under the WTO as a larger bloc. Lack of Democratic and Transparent Procedure There is a lack of participation by all stake-holders in negotiations; consultation is usually limited to private businesses without sufficient consultation and participation of public-interest civil society groups. A lack of access to draft negotiating texts in all sectors creates difficulties for people to access the potential impacts from negotiations. Sometimes there is no translation of the agreement into the local language (FTA Watch Thailand 2005). In some cases governments proceed with the agreements without the participation of even the parliament. Many civil society groups and NGOs have pointed out that these negotiations take place in an undemocratic and non-transparent manner. These groups are denied information and access to negotiations. Yet the movements against such forms of corporate-led trade is growing, demanding public scrutiny of FTAs under the right to information and participation. Those participatory rights are important not only at the national level but also at the global level. International economic agreements are formally agreed between governments, and governments are clearly the primary duty bearers of human rights. However, people are affected by decisions taken in international institutions, and their voice should be reflected in decision-making processes. 10  This was exactly what happened in the case of Metalex in the context of NAFTA. Information provided by Simon Walker by email in 2005.

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Recently, the participation of individuals and groups has increased at the global level, as seen in various international campaigns for promoting some forms of human rights such as public health, but this is not realized in decision-making. For example, people have no access to WTO meetings and decision-making processes. Decision-making should be open to public scrutiny, with special attention given to the poorest people of the least developed countries (Report of High Commissioner 2005, Paras 39–46). Legal Difficulties of the Extraterritorial Application of National Standards to TNCs Even though there is some possibility of the application of international human rights laws towards non-state actors including TNCs (see the section “Transnational Corporations in International Economic Agreements” above), the extraterritorial application of home country jurisdiction over TNCs is highly problematic. A government cannot take a TNC to arbitration under current treaties, although a government can take another government to arbitration. The possible extension in the extraterritorial application of some home countries’ jurisdictions for the worst human rights abuses committed by their firm abroad is to be considered first (United Nations Commission on Human Rights 2006b, Para. 71). The Human Rights Dimension There is only a very weak mechanism for protecting human rights in international economic agreements. The most frequently discussed fields of human rights are considered below. Right to Work Globalization through FTAs has caused instances of violation over the fundamental right to work. This has affected both developed and developing countries. Many TNCs have taken up the popular practice of realigning their manufacturing facilities. As a result, there have been tremendous layoffs of workers in developed countries. TNCs, in pursuit of cheaper labor, rely on FTAs to deregulate the strict employment regulations of developing countries. While TNCs may contribute more work places and thus provide support for the economic development of rising nations, within this process are serious concerns over violations of human rights of the workers themselves. This phenomenon is known as the casualization and informalization of labor. The impact of this leads to further complications over human rights issues such as child labor, sexual abuse among female workers, human trafficking, absence of labor protection, and low wages (Centre Focus 2005). The recent UNDP Human Development Report (2006) on the Asia-Pacific region reported that trade liberalization led to “jobless growth,” particularly among

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young people and rural communities. It has widened enormously the urban–rural gap. Rights to Livelihood The elimination of tariffs on goods imported from countries that are parties to FTAs, which is the main feature of all bilateral FTAs, may bring grave consequences for the livelihoods of small domestic producers and traditional farmers. The effects of FTA rules and policies may have direct economic or regulatory effects but the impacts on human rights might not be apparent. The lowering of a tariff might have immediate effects on tax revenue and food prices. However, on closer examination, the trade measure might reduce local production of crops formerly subject to a higher tariff as local producers can no longer compete with cheaper imports. This in turn could exacerbate existing stresses on rural infrastructures, destabilizing further rural food security, clean water, rural livelihoods, and the enjoyment of the right to food (Walker 2004, 3). In 2006 the Special Rapporteur of the Commission on Human Rights on toxic, dangerous products and wastes pointed out that hazardous chemicals are not well treated by many private companies, which has a direct adverse effect on the enjoyment of human rights by individuals and communities, and that TNCs operating in weak governance zones should ensure not to engage in such behavior (United Nations Commission on Human Rights 2006c, Paras 44–7). Right to Medical Treatment and Health Trade-related intellectual property rules in FTAs risk undermining national governments’ ability to look for and obtain cheap medicines and medical resources. These prevent governments from moving flexibly and may have devastating consequences on human rights aspects in FTA-party countries. Since such patent protection through FTAs is usually stronger than required under WTO rules, they restrict governments from taking action to protect the right to health in the future (FTA Watch Thailand 2005). Paul Hunt, the Special Rapporteur of the UN Commission on Human Rights on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health pointed out the risks to the health rights of the poorest people represented by an opening of the health sector to foreign investment in his 2003 report (Hunt 2003). He continued to state in 2004 that “any standards introduced under the FTA on intellectual property protection—and patents more specifically—should include an express safeguard recognizing the right and duty of countries to protect human life and health.” He warned that the availability of generic medicines could be gravely limited by the FTA (Hunt 2004, Paras 47–51). The Working Group on the right to development considered in 2006 that intellectual property protection should not result in the weakening of the enjoyment of the human right to the highest attainable standard of health or in limiting access to

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essential medicines (United Nations Commission on Human Rights 2006a, Para. 52). Most case studies show instances where FTAs in epidemic-struck countries have further difficulty acquiring effective and yet affordable vaccines and medical treatment resources due to their patent obligations under FTAs. Right to Preserving Traditional Knowledge The issue of traditional knowledge has come up in a dozen or so FTAs over the last couple of years. In numerous cases, specific provisions on traditional knowledge were signed. FTAs are categorizing traditional knowledge as intellectual property—a commodity to be bought and sold on the global market. For some people, traditional knowledge can be bought and sold, so it should have everything to do with it. For others, it is something to keep out of the market, so it should have nothing to do with it. Yet a lot of people are trudging around the middle grounds and ambiguities of this conflict. While trying to promote some sort of “rights” to traditional knowledge, they stay within the dominant framework of private property and usually end up proposing an adapted form of intellectual property rights (Cervantes 2006). At the international level, governments have been debating whether and how to set up globally agreed rules on traditional knowledge for many years. This has been playing out at various institutions like the WTO, the World Intellectual Property Organization (WIPO) and the Food and Agriculture Organization (FAO), with occasional instances at UNESCO, the UN Commission on Human Rights and elsewhere. While the debate itself seems technically insignificant and highly unrealistic, it is actually fundamental. At the core is an ideological and cultural conflict between looking at traditional knowledge as “intellectual property,” thereby privatizing it to serve corporate economic and development strategies, and looking at it as a collective heritage of peoples and communities that states have no business regulating, much less governing. Women’s Human Rights Women are affected negatively in the process of trade liberalization for the same reasons that they bear the greatest burdens of poverty. The distribution of the benefits and burdens of trade liberalization reflects and often reinforces gender power dynamics. Women in the agricultural sector in rural communities have been severely hurt by the importation of cheap food and goods, and dumping. Women’s employment has become more vulnerable due to the increased “flexibilization” and “casualization” of work. They have also been adversely affected by the cuts in social protection and basic services. These have cumulatively affected many communities and families, particularly in rural areas. In general, women too often bear an unacceptable portion of the adjustment costs of trade liberalization. Under such circumstances, besides the Human Rights Impact Assessment (HRIA),

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there should also be a gender impact assessment of FTAs that fall under trade liberalization (Centre Focus 2005). Human Rights Enforcement Mechanisms: Recommendations As the severity of this issue is now apparent, we now review the various methods the international community can utilize in order to counter the negative effects upon human rights. The core of the matter is that the international corporative legal system made up of international, regional, sub-regional, and bilateral economic agreements, and international human rights laws run parallel and do not bridge each other. Moreover, while the corporative legal system has somewhat coercive measures such as fines and economic sanctions to ensure its compliance, the binding force of human rights laws is weak. This has allowed the actors of the former freedom of movement. Already there have been numerous attempts and efforts made to implement regulations and norms for the human rights obligations of states and responsibilities of TNCs. This section will further elaborate on various methods that can be incorporated to ensure the success of future efforts to apply possible solutions. This involves a potential merging of international norms and regulations that should be followed by states, and those followed by TNCs, for the promotion and protection of human rights. Recommendations for enhancing the consideration of human rights in the process of international economic agreements are raised as a conclusion to the chapter. Invoking State Responsibilities Decided by the UN Human Rights Mechanisms such as the Universal Declaration of Human Rights, and the UN Human Rights Bodies and Agencies It should be remembered that the Universal Declaration of Human Rights and UN Conventions are to be conformed to by member states. Thus, even though the WTO and FTAs exist outside the UN framework, states which enter into those international economic agreements are required to observe the UN human rights mechanisms as long as they are members of the UN. International civil societies have raised the pre-eminence of those higher norms, based on Article 53 of the Vienna Convention on the Law of Treaties.11 The Universal Declaration of Human 11  It states that “A treaty is void if, at the time of its conclusion, it conflicts with a peremptory norm of general international law. For the purposes of the present Convention, a peremptory norm of general international law is a norm accepted and recognized by the international community of States as a whole as a norm from which no derogation is permitted and which can be modified only by a subsequent norm of general international law having the same character” (Europe Center–Third World and American Association of Jurists 2004a and 2004b).

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Rights, the International Covenant on Civil and Political Rights (ICCPR), and the International Covenant on Economic, Social and Cultural Rights (ICESCR) and other conventions referring to human and environmental rights have the status of peremptory norms of general international law and cannot be violated by other treaties without nullifying the latter (Europe Center 2004a and 2004b). The ICCPR defines the right to life, the rights of the child, the right to participation, and so on, and the ICESCR and Convention on the Rights of the Child also define these rights.12 The Commission on Human Rights passed several resolutions on “Access to medication in the context of pandemics such as HIV/ AIDS, tuberculosis and malaria” (Commission on Human Rights Resolutions 2004/26, 2003/29, 2002/32 and 2001/33). The World Health Organization recently stated that “Patents are by no means the only barriers to access to life-saving medicines, but they can play a significant, or even dominant, role in that they grant the patent holder a monopoly on a medicine for the number of years the patent is in force.”13 Developing Human Rights Impact Assessments Human Rights Impact Assessments (HRIAs), aiming to support governments, businesses, civil society, individuals, and groups to improve their understanding of their rights and obligations with a view to creating sound policies, on the basis of non-discrimination, participation, transparency, and accountability, should be more actively incorporated in the process of negotiating international economic agreements. The High Commissioner has already recommended that states undertake HRIAs of trade rules both during the process of the negotiation as well as post negotiation (Report of High Commissioner 2004, Para. 55). However, although international institutions, donor countries, and civil society organizations have developed a range of methodologies in the context of the assessment of global development planning, less progress has been made in trade negotiation (Report of High Commissioner 2005, Paras 24–7). Fairly sincere efforts to establish a methodology for undertaking HRIAs of trade and investment-related rules and policies are now being made (Walker 2004), but there is as yet no consistent approach or methodology. The characteristics of HRIAs include, utilization of the main international human rights treaties as a framework for the assessment and comparison of 12  These obligations include the need to take all possible measures to reduce infant mortality and to increase life expectancy, especially by adopting measures to eliminate malnutrition and epidemics. Right to participation includes the obligation to respect access to information, and to ensure every citizen’s right to participate in the conduct of public affairs (FTA Watch Thailand 2005). 13  Press document, “US–Peru Negotiation on a Free Trade Agreement: Special Rapporteur on Right to Health Reminds Parties again of Human Rights Obligations”, 5 July 2004.

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existing trade measures in trade agreements and potential measures in ongoing rounds of negotiations against those internationally agreed norms and standards, and utilization of the norms and standards of human rights treaties as the framework for designing and undertaking the assessments. Given that the nature of international economic agreements, especially FTAs, are highly inclusive, and challenges to human rights are comprehensive, HRIAs should cover a broad range of inter-linked issues not only in the economic aspects but also in the cultural, political, and social aspects. With these, HRIAs aim to help people identify and assess their rights, to understand how trade reform can affect the enjoyment of those rights, to identify ways in which governments can improve trade policies to fulfill human rights obligations, and to identify ways in which the international community can cooperate with national governments to fulfill human rights obligations. The High Commissioner especially recommended that poorer states consider seeking financial and technical assistance in undertaking HRIAs (Report of High Commissioner 2004, Para. 55). In order to enhance and promote state obligation for human rights in relation to the responsibilities of TNCs, HRIAs should incorporate various norms of TNCs with their progressive interpretation. It is further recommended that HRIAs be made a mandatory requirement for all levels of negotiations related to free trade arrangements. Active Application of the General Exception Clauses of the WTO, and the Generalized System of Preferences Parties to FTAs may apply some exceptions in multilateral economic agreements, recognizing that equal treatment will not always be fair in all cases. Therefore it should be recommended that necessary measures be taken to incorporate the general exception clauses of the WTO, and the Generalized System of Preferences in FTA negotiations. The general exception clauses provide a mechanism by which important state interests and obligations that are not otherwise compatible with WTO agreements can find expression. They recognize “the importance of a sovereign nation being able to act to promote the purposes on the list of exceptions, even when such action otherwise conflicts with various obligations relating to international trade” (Jackson 1989, 206). This does not mean that governments have the right to take any decision they wish domestically, as such interpretation could render the entire WTO system unenforceable.14 These clauses can be used in the process of establishing FTAs and in the relevant negotiations. These clauses will apply to the exceptions of allowing states 14  Office of the United Nations High Commissioner for Human Rights, Human Rights and World Trade Agreements: Using General Exception Clauses to Protect Human Rights, 2005 (HR/PUB/05/5).

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to take measures for the protection of public morals, measures for the protection of human, animal, and plant life and health, and measures for the protection of public order (Report of High Commissioner 2003, Para. 25). Though there may be discussion and possibly confusion and debate over the range in definition of “life and health,” “public order” and “public morals,” efforts to incorporate these exception clauses in FTAs should be actively promoted, with the inclusion of these debates. The Generalized System of Preferences allows developed countries to implement generalized preferences in favor of developing country imports. A developed country can apply tariffs to products from developing and least developed countries that are lower than the most-favored-nation (MFN) level. This exception to MFN treatment has been a means of improving market access for developing and least developed countries, and is particularly relevant to agricultural trade (Report of High Commissioner 2004, Para. 23). In 2006 the Working Group on the right to development supported WTO decisions (2003, 2005 and other) to extend the transition period for least developed countries to provide protection for trademarks, copyright, patents, and other intellectual property under TRIPS (United Nations Commission on Human Rights 2006a, Para. 53). All these general exceptions of the WTO should be developed for FTAs. Incorporating Norms of TNCs Raised by the UN Human Rights Mechanisms in International Economic Agreements It is obvious that states have the primary responsibility to ensure that TNCs respect human rights.15 It should be highlighted, however, that even though states are clearly the primary addressees of human rights obligations, the language of core human rights instruments does not narrowly restrict itself to states. The Universal Declaration speaks of the duty of “every individual and every organ of society,” and the ICESCR (General Recommendation 14) states that “while … States are … ultimately accountable for compliance with it, all members of society – individuals … as well as the private business sector – have responsibilities regarding the realization of the right to health” (Reinish 2005, 71). In this sense all business entities, including TNCs acting within the context of international economic agreements, remain subject to the UN human rights regime (Baxi 2006, 281). There have been serious efforts to establish codes of conduct intending to regulate corporate, in particular TNC, behavior by various international organizations including the UN, OECD, ILO, and others since the 1970s.16 The UN showed renewed interest with initiatives such as the Global Compact in 1999. Recently “Norms on the Responsibilities of Transnational Corporations and Other 15  Working Group on Transnational Corporations (2003), Para. 1. 16  On the development of the efforts, see Weissbrodt and Kruger (2005, 315–21). On the list of the codes and norms, see United Nations Commission on Human Rights (2005), Annex II.

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Business Enterprises with Regard to Human Rights” was submitted by the SubCommission on the Promotion and Protection of Human Rights.17 These codes of conduct or norms provide either mandatory requirements or voluntary guidelines for TNCs to follow, by encouraging contribution to the development goals and objectives of the countries in which they operated. The UN Code of Conducts for TNCs attempted to facilitate co-operation with and among states on issues relating to TNCs. Intended to establish soft law, the norms set forth basic implementation approaches.18 However, due to intense controversy the UN abandoned its efforts to create a code of conduct for TNCs in 1993, the draft of which had been made public in 1984. In 2004, the Sub-Commission’s Norms were submitted to the Commission on Human Rights. While there are some relatively successful efforts, such as the United Nations Global Compact with more than 2,300 participating companies (United Nations Commission on Human Rights 2006b, Para. 40), they have weak supervisory or enforcing structures (Reinish 2005, 43–5). Thus, steps “beyond voluntarism” for effectively increasing TNC human rights accountability are needed (International Council for Human Rights 2002, 52). With these efforts to go beyond voluntarism, there should be studies on methods for incorporating all the responsibilities of TNCs discussed inside and outside the UN framework into the contents of international economic agreements. Highlighting the Calvo Doctrine It is recommended to restore the territorial competence of national tribunals through highlighting the Calvo Doctrine. This is a foreign policy doctrine which holds that jurisdiction in international investment disputes lies with the country in which the investment is located, which is based on the principles of national sovereignty, equality among national and foreign citizens, and territorial jurisdiction. The Calvo Doctrine thus proposed to prohibit diplomatic (or armed) intervention before local resources were exhausted. An investor, under this doctrine, has no recourse but to use the local courts, rather than those of their home country.19 The Calvo Doctrine precluded arbitration and instead required disputes to be resolved in national courts. Latin American countries and state-owned companies put a Calvo clause in their investment contracts and agreements with foreign investors (Cremades 2004). Further, the Calvo Doctrine is included in the Charter of Organization of 17  Working Group on Transnational Corporations, Sub-Commission on the Promotion and Protection of Human Rights, “Commentary on the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights”, 2003 (E/CN.4/Sub.2/2003/38/Rev.2). 18  Human Rights Library, University of Minnesota. Available at . 19  Wikipedia: The Free Encyclopedia. Available at , accessed 22 July 2006.

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American States, the Bogota Covenant, Resolution 3171 of 17 December 1973 of the UN General Assembly, and several national constitutions (Europe Center 2004c, 4–5). Other Measures In addition, the following measures could be considered: asking the WTO to adopt UN human rights norms; drafting model FTAs with principles and guidelines including non-discrimination, transparency, accountability, and participation; establishing a separate part within the UN human rights machinery for FTAs and TNCs. References Baxi, U. (2006), The Future of Human Rights (Oxford: Oxford University Press). Centre Focus (2005), Center of Concern, 167 (June) (Washington, DC). Cervantes, S.R. (2006), “FTAs: Trading Away Traditional Knowledge”, available at , accessed 22 July 2006. Cremades, B. (2004), “Disputes Arising Out of Foreign Direct Investment in Latin America: A New Look at the Calvo Doctrine and Other Jurisdictional Issues”, Dispute Resolution Journal, May–July. Europe Center–Third World and American Association of Jurists (2004a), Bilateral Treaties on Free Trade and Promotion and Protection of Investment (E/CN.4/ Sub.2/2004/NGO/10). —— (2004b), Joint Written Statement to the Commission on Human Rights: FTA Dangers and the Urgent Necessity of an Alternative for Development (E/ CN.4/2004/NGO/121). —— (2004c), Joint Written Statement to the Sub-Commission on the Promotion and Protection of Human Rights: Bilateral Treaties on Free Trade and Promotion and Protection of Investment (E/CN.4/2004/NGO/10). FTA Watch Thailand (2005), Thailand’s Free Trade Agreements and Human Rights Obligations, March. Prepared for Submission to the 84th Session of the UN Human Rights Committee. Held, D., McGrew, A., Goldblatt, D. and Perraton, J. (1999), Global Transformations (Cambridge: Polity Press). Hunt, P. (2003), “The Right of Everyone to Enjoy the Highest Level of Mental and Physical Health”, Special Rapporteur of the United Nations Human Rights Commission (E/CN.4/2003/58). —— (2004), “Report of Country Visit to Peru”, Special Rapporteur of the United Nations Commission on Human Rights (E/CN.4/2005/51/Add.3). Ikenberry, J. (2004), “American Hegemony and East Asia”, Australia Journal of International Affairs, 58(3).

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International Council for Human Rights (ed.) (2002), Beyond Voluntarism: Human Rights and the Developing International Legal Obligations of Companies. Jackson, J. (1989), The World Trading System: Law and Policy of International Economic Relations (Cambridge, MA: MIT Press). Marks, S. and Clapham, A. (2005), International Human Rights Lexicon (Oxford: Oxford University Press). Oloka-Onyango, J. and Udagama, D. (2000), Preliminary Report on Globalization and its Impact on the Full Enjoyment of Human Rights (E/CN.4/ Sub.2/2000/13). Reinish, A. (2005), “The Changing International Legal Framework for Dealing with Non-State Actors”, in Philip Alston, Non-State Actors and Human Rights (Oxford: Oxford University Press). Report of the High Commissioner (2003), Human Rights, Trade and Investment (E/CN.4/Sub.2/2003/9). — (2004), Analytical Study of the High Commissioner for Human Rights on the Fundamental Principle of Non-discrimination in the Context of Globalization (E/CN.4/2004/40). —— (2005), Analytical Study of the High Commissioner for Human Rights on the Fundamental Principle of Participation and its Application in the Context of Globalization (E/CN.4/2005/41). Sand, P. (2006), Lawless World (London: Penguin books). Stichele, M.V. (1998), “Towards a World Transnationals’ Organisation?”, WTO Booklet Series 3, Transnational Institute, available at , accessed 30 April 1998. United Nations Commission on Human Rights (2005), Report of the United Nations High Commissioner on Human Rights on the Responsibilities of Transnational Corporations and Related Business Enterprises with Regard to Human Rights (E/CN.4/2005/91), Annex II. —— (2006a), Report of the Working Group on the Right to Development on its Seventh Session (E/CN.4/2006/26). —— (2006b), Interim Report of the Special Representative of the SecretaryGeneral on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises (E/CN.4/2006/97). —— (2006c), “Adverse Effects of the Illicit Movement and Dumping of Toxic and Dangerous Products and Waste on the Enjoyment of Human Rights”, Report of the Special Rapporteur by O. Ibeanu (E/CN.4/2006/42). United Nations General Assembly (2005), 2005 World Summit Outcome (A/ RES/60/1). Walker, S. (2004), “Human Rights Impact Assessments of Trade-Related Policies”, Sustainable Development and Trade Law (The Hague: Kluwer). Weissbrodt, D. and Kruger, M. (2005), “Human Rights Responsibilities of Businesses as Non-State Actors”, in Philip Alston (ed.), Non-State Actors and Human Rights (Oxford: Oxford University Press).

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Working Group on Transnational Corporations, Sub-Commission on the Promotion and Protection of Human Rights (2003), “Commentary on the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights” (E/CN.4/Sub.2/2003/38/Rev.2). Zagel, G.M. (2005), “WTO and Human Rights: Examining Linkage and Suggesting Convergence”, Voices of Development Jurists, 2(2) (International Development Law Organization).

PART 2 European Experience and Asian Reality

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Chapter 4

The European Experience: The Millionfold Trauma of the Twentieth Century is Still Virulent Holger Heide

Introduction One of the main ideas behind the Jeju Peace Conference was that the regional integration of nation states can be a framework for bringing stable peace. With the European post-World War II experience in mind I will question this idea. The obvious absence of war within (Western) Europe over more than six decades has rather been a consequence of the economic and military US strategy of roll-back against the Soviet Bloc and of the resulting fragile dynamic balance of power between East and West than of the political will to keep peace. The starting point is the obvious instability of peace in East Asia seemingly contrasting the European situation. Before considering the European experience as an example, however, we should ask analytically, what are the interests that are the cause for the present unstable state of East Asia? Is it really “integration” that is needed? What about the role of the nation state in a globalizing world order? Can we speak of a state autonomy? Hence, can integration at all be an autonomous decision of nation states? As the integration of Western Europe arose as part of a strategy in the Cold War and had practically to be forced upon most of the peoples that had suffered under Germany’s warfare only a couple of years earlier, it can hardly be interpreted as an indication for a peacekeeping effect. Moreover, since the defeat of “real socialism,” the frontier of the former Western Europe has been systematically moved eastward, which is among other things obviously a hostile strategy towards Russia. In particular the haste with which the Eastern European states were admitted to the European Union, despite their grave deficits with regard to the official conditions for entry,1 clearly reveals how the EU bodies parallel to their own economic interests willingly made themselves the vicarious agents of US policy.

1  To be compared with the protracted treatment of Turkey’s motion of inclusion.

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It was also as a consequence of the defeat of the socialist bloc that Europe— and for the first time with the new Germany participating—could play a leading role in the war in Yugoslavia in Southeast Europe. Meanwhile, European civilization and human rights are allegedly being defended in Central Asia2 and in the Indian Ocean. Justification for the presence of troops in Afghanistan, which has been condoned by the UN Security Council—albeit not as a “blue-helmet” peace mission, but as “enforced peacekeeping”—is based on the notion that “in order to maintain peace (in Europe), peace must be secured in Afghanistan.” This has the ring of being a purely “humanitarian” involvement. And to keep up this appearance, the propaganda machine draws a clear distinction between the war the US troops fight in the south of Afghanistan and the ISAF deployment in the north of the country. The latter contingent comprises NATO as well as non-NATO troops, among them German as well as Swedish. In 2007 Germany officially dispatched six Tornado fighter aircraft to Afghanistan: their mission virtually amounted to a battle order, and the distinction between ISAF and combat troops is thus becoming increasingly blurred. A plan from the same year, proposed by the Swedish military goes even farther: they wanted to offer their JAS Gripen fighter-bomber for direct bombing raids. The openly voiced justification was that the JAS Gripen, despite being one of the world’s most advanced military aircraft, has not achieved the desired export success as it has not yet been tested in real battle. This is only to present some examples that lead me to hesitate to believe in a peaceful Europe. At the same time, in connection with the second US-led war against Iraq, Europe has shown itself to be by no means united but, on the contrary, severely split—the “old Europe” (in the terminology of the George W. Bush administration3) opposing the war and questioning the alleged reasons, and the seemingly “new Europe,” joining the combat troops. This provides a particularly clear indication of how important it was—particularly from the US strategic point of view—to integrate the former Eastern Bloc countries in the Western alliance: Poland responded immediately by sending troops to Iraq, and together with the Czech Republic declared its willingness to have the newly proposed US military defense systems stationed on its territory, a wish both could realize in connection with the Russian–Georgian armed conflict. Another aspect, not really new, but until now only a theoretical one, is the connection between military strategies and the European energy supply. For example, safeguarding the transport routes for oil and gas has been seen as one of the major tasks of the German armed forces since the end of the Cold War. And the “reliability of Russia as an energy supplier” is a central issue in the debates about a common energy policy of the European Union (Nassauer 2007, 13). In 2  Another flank of the Russian territory. 3  See US Defense Secretary D. Rumsfeld’s statement from January 2003 and the subsequent discussion, BBC News [Europe] .

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addition, in recent strategic studies the security-related problems of climate change (particularly in relation to the supply of water) has been dealt with. Thus there is no end in sight for Europe’s entanglement in war, especially in connection with the “war against terror.” Thus the only argument for peace that remains is indeed that of the absence of war on European soil itself. This fact may not astonish if we look at it more in general and in a more analytical manner. The destructiveness of capitalism is not limited to the past, nor to times of open war. Capitalist production itself always occurs as destruction of the productive forces. In his analysis of capitalism as an antagonistic mode of production, Marx points out (e.g. 1973 [1857–58]) that capital and living labor are mutually alien: in the same way as objectified labor appears to living labor to be an “alien power,” from the perspective of capital, living labor appears as something alien, something threatening, yet upon which it knows itself to be completely dependent. This forms the basis for capital’s “built-in” fear (no matter who represents it in person) of its abolition. This statement is a prelude to an argument I wish to elaborate on later. It is my opinion that any debate on the subject of peace must remain senseless in the absence of an analysis of capital. Moreover, the peace debate must not contemplate the state as being an entity separate from capital and in contrast to it, awakening the impression that if needs be it can somehow be “reigned in.” The Marxian analysis can also be of use here, helping to perceive the state as a value form, i.e. as an “aspect” of capital.4 Furthermore, in view of the role played by the supposedly “peace-loving” nations and the anguishes and repeated defeats of the peace movement throughout history, it will be necessary to redesign our analysis of capital. If the results of analysis are to have any effect on our future action, capital is to be located on the subjective level of action. My hypothesis is: the fact that the majority of people in Europe seem to support the policy of capital as a “peace policy” has its roots in the massive traumata of the twentieth century. Being repressed, these traumata have lasting and severe psychological consequences. Yet, more generally we can go deeper into the violent history of (capitalist) modernity and discover modernity itself as a post-traumatic society (Heide 2002). The Meaning of “Post-traumatic Society” The process of civilization has never been a continuous process of “habituation.” As the triumphant advance of industrial capitalism demanded a hitherto wholly unknown abstract discipline, the process was only possible as a strategy against the masses, a never-ending story of violence.5 In the European history of modernity the first periods of open terror, the “bloody legislation”—as a result of which masses 4  In order to do this we must also relinquish our perception of the state as being “capital’s executive body,” a concept originally developed by Engels. 5  More in detail in Heide (2000a), based on Marx, Ure, Thompson, Dreßen, et al.

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of people were beaten, whipped, crippled, and murdered in a particularly brutal fashion6—were followed by periods of pedagogical punishments and of work and industry schools, penitentiaries, and, last but not least, psychiatric wards. It was during the nineteenth century that a disciplined working class developed step by step in all Western European countries—a working class that had really learned to fight, that is true, but already on the ground of capitalist society. This was the late consequence of hundreds of years of violence. This historical process can psycho-analytically be described in terms of collective introjective identification with an overwhelming force. Originally hostile principles conceived as extraneous had finally been internalized. European capital in the era of high imperialism was able to expand its brutal force to the greater part of the not yet capitalist world.7 If we try to understand the modern history of East Asia, we have to recognize it as a consequence of the violent clash with the “West” in the second half of the nineteenth century (see Heide 2003; 2000b). Until shortly before the beginning of World War I there had still existed a broad peace movement rooted in parts of the organized working class with its—at least rhetorical—internationalism. But after the large majority of the social democratic party in the German Reichstag had approved the war, the peace movement in almost all European countries was swept away by a vast wave of national chauvinism. In the period between the wars the workers movement, being already deeply split from the experience of World War I, was driven into the dualism between Stalinism and fascism and finally almost wiped out—physically and psychically—at least in Germany and the countries most involved, by Nazism and World War II. Attempts to reconstruct a revolutionary labor movement after the defeat of fascism ended in a new dualism between Stalinism on the one side and US sponsored unionism on the other. In this way it was again the defeat of the labor movement that formed the solid ground for the success story of economic rise—and so for European integration. This development appears so far, paradoxically enough, to be the consequent continuation of the process of “the making of the working class” in the sense of E.P. Thompson (Thompson 1966). This may bring us nearer to an explanation of the fact that on the one hand the experiences of war with umpteen millions of dead had created the insight that war must not be repeated, whereas on the other hand the undigested fear led to an inability to act in accordance with this insight—neither collectively nor individually. If it were merely a case of a cognitive learning process, then the entire twentieth century in Europe (and later) would have turned out quite differently.

6  In order to get rid of the superfluous as well as to force on to the rest the preparedness to do disciplined work. 7  As may have become clear from the foregoing, capitalism as a mode of living always comes “from outside”: it was as alien to the Europeans at first, as it later became to the peoples in other parts of the world.

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The next section, therefore, will attempt to elucidate severe collective traumatization as a consequence of the bloody history of modernity, with particular emphasis on the twentieth century, and by this to reinforce my argument, that we have to look beyond the level of politics and economics, and that all our arguments remain questionable as long as we—both individually and collectively—are not really ready to face our own past. Collective Trauma as a Consequence of Violence The Concept of Trauma Over the past decades there has been a great deal of empirically founded and theoretically highly elaborate research on the effects of mentally traumatizing acts of violence. In particular, Dina Wardi has presented some impressive research results on the effects on directly afflicted persons, as well as on their children and grandchildren. These insights were gained whilst working as a psychotherapist on the personal stories of survivors of the Holocaust and their descendants (Wardi 1997, 63 and passim). Her research clearly illustrates how the consequences are not only grave for the survivors’ entire lives, but also and because of that for their children and children’s children (Herman 1993; Wardi 1997; Schmidbauer 1998). A trauma occurs when a person is rendered completely powerless by an overwhelming force (Herman 1993, 53). Often, victims can only mentally overcome extremely serious traumatic aggression by means of the introjectiveidentificatonary acceptance of subjection to this overwhelming force. As no action can feasibly be induced to resolve the situation, the only “help” can come from a dissociative change of consciousness (Herman 1993, 65). The identification constitutes a separation from the Self, a “Betrayal of the Self” (Gruen 1986). Judith Herman speaks of a “destroyed self” (Herman 1993, 79). The introjection of the alien identity results in alien needs appearing to be one’s very own. What may once help to ensure survival in a concrete individual situation can result in a lifelong pattern of a victim’s behavior. As the fear is only repressed, not really coped with, this impedes the ability to abandon the “protective wall” of constriction (Herman 1993, 65). Especially in times when the violence is not experienced as an isolated case, but is lasting or is repeated systematically, when all the desperate attempts at retrieving one’s Self end in defeat, the subsequent numbness eventually becomes chronic, and thus results in a pattern of behavior. Every process of aliveness, i.e. every uncontrolled, uncontrollable feeling, is perceived as filled with fear and as threatening. As a consequence of the attempts to regain control, all genuine feeling is repressed, possibly for the rest of one’s life; all the alternatives are systematically blended out.

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Globalization and Regional Integration in Europe and Asia After Trauma this centralisation leads to psychic hardening – defence structures which are intended to prevent the painful experience once again overwhelming the ego. Repression, silence, irritable morose mindset and general social withdrawal are characteristic for the depressive pole of this defence strategy, idealisation of war and combat, unrestrained overestimation of one’s capacities, ruthlessness and fantasy of grandeur are the manic pole. (Schmidbauer 1998, 71)

As already pointed out, the crucial factor here is fear, even though as a result of being repressed it is no longer consciously experienced. Ultimately, a “fear of fear” constitutes itself, a vicious circle which binds up increasingly greater amounts of life energy in repression and control. In cases where the traumatic experience stems from wars or other events of mass violence, the place of the personally identifiable aggressor (person) is taken by an anonymous overwhelming force whose “logic” remains utterly obscure to the victim. The original system of values and norms can be completely set aside; the subsequently arising state is one of instability and disconsolateness. This exerts an extremely aggravating effect on the post-traumatic syndrome (Schmidbauer 1998, 84). Through identification with the anonymous aggressor the victim loses his original identity, which has been virtually “proven to be worthless”; “but as reward for his subjugation he gains the illusion of being all-powerful which comes from the immersion in a total institution” (Schmidbauer 1998, 89). What remains after such profound defeats is the fear of fear of weakness and inadequacy, and therefore the deep-rooted existential necessity of its repression. But this means that one’s own feelings, thinking, and action—which were the cause of the defeat—must be repressed too. Often this takes the form of contempt and aggressiveness against the (weaker) minority of those who, whether rightly or wrongly, are brought into connection with such feelings, thoughts, and actions. The auto-aggressiveness, which manifests itself in self-sacrifice for the system, is simultaneously accompanied by contempt for the weaker members of society. Part of this manifests as widespread aggression against children, the aged, handicapped persons, and so on, but in the same way sexist and racist aggression, even if it often remains latent and, so to speak, “invisible.” What can be psychologically described as a separation from the Self, from the insufferable feelings,8 corresponds at societal level to the separation (or alienation) from one’s own history, or as Marx put it: “Individuals have alienated their own societal relationship from themselves, so that it takes the form of a thing” (Marx 1973, 160). Once the belief in an alternative has been thoroughly destroyed, individuals develop an interest in participating in capitalist society to whatever extent that entering into competition appears to be a prerequisite to their survival. In other words, they eventually develop a “private interest” that “can be achieved only within the conditions laid down by society and with the means provided by 8  As the separation cannot occur selectively, this implicates separation from one’s own feelings in toto.

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society; hence it is bound to the reproduction of these conditions and means” (Marx 1973, 156). This corresponds with the aforementioned banishing of all alternatives from one’s consciousness. The actual recurring contradiction between living labor and the system is then reduced to either an obsessive search for reforms within the system, or a flight into blind aggressiveness. Passing the Traumatization on to the Next Generation On the basis of the foregoing it would be possible to explain the deep formation of a society when a whole generation is affected by a traumatic experience. But even if we were to assume the possibility or, more likely, probability of the lifetime effect of the described introjective identification, this would still only explain a temporary effect which would gradually die out with the afflicted generation. But when we assume identification with alien will and a substantial loss of spirituality in the initially directly afflicted generations, this must also have an effect on the socialization of the following generations. As socialization is a cumulative process in which all effects leave behind lasting impressions—whether consciously or unconsciously—the development phase of early childhood is of absolutely crucial significance. The fear experienced in childhood can exercise a decisive influence over a whole lifetime. And it is this deep-rooted fear which is, in turn, passed on to the next generation. Frequently, the fear traumatized adults have of being confronted with their carefully repressed feelings leaves no room for anything other than defense. In this case the child does not receive the love and attention it needs in order to feel part of this world’s great whole: that is, in order to learn to live.9 It is in this way that “the parents … become a trauma for their children” (Schmidbauer 1998, 288ff.; see furthermore 131ff.). In such cases, what we see in the following generation are probably above all forms of secondary identification, as described by Anna Freud (1980), since the directly experienced acts of aggression appear to be less severe and are generally not acts of anonymous aggression. Admittedly, in many cases this does not exclude acts of brutal violence against children on the part of their traumatized parents; this may lead to new cases of individual primary identification processes. As I mentioned before it is of course also possible to imagine cases of severe traumas in children which are not the result of visibly brutal violence. What is more, “mere” lovelessness can also be fatal (Gruen 2000, 54). One of the central 9  “If children are never given cause to feel that they are loved and respected for their own sake, the helplessness with which they are confronted at every stage of their development elicits uncontrollable fear. Children’s tiny size, their powerlessness, their insignificance—except as objects that make others make feel significant—in short, their inferiority, make it impossible for them to discover their own self … They will then either experience psychic disintegration or find coherence in the structure provided by their parents” (Gruen 1986, 70–71).

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causes is to overload children with excessive demands and expectations, starting already in the womb (Wardi 1997, 63, 105). This kind of projection onto their own children is to be expected especially of very young traumatized adults in the wake of their own humiliation, distress and unfulfilled yearning for love and attention. The fate of the children and even grandchildren of survivors of the Holocaust or American Vietnam veterans have thus been well documented (Wardi 1997; Herman 1993; Schmidbauer 1998). Still relatively young in contrast to that is the scientific—but also public—interest in the consequences of World War II on the so-called “civilian population,” especially women and children (Bode 2005, 15 and passim). Millions of children were directly exposed to the brutality of the bombing raids, refugee flight and displacement (homelessness), rape, and to top it all the subsequent lack of support on the part of their totally overtaxed mothers and their fathers returned from war, and even later from war imprisonment. Addiction as an Individual Consequence of Trauma I would like to examine the consequences of trauma yet more precisely by introducing the phenomenon of addiction. It is possible to say that severe traumatization creates a predisposition for addiction. The term “addiction” stands first and foremost for a psychosomatic illness. It describes a state which is experienced as compulsion, an urge, or being driven in the futile attempt to consign to oblivion the pain caused by the reality of life.10 The following general definition is the result of my theoretical and practical work with work addiction: “Addiction is a reaction to insufferable feelings, by which we manipulate our feeling, thinking, and acting – be it via the consumption of substances, or via drugs produced naturally in the body.” This broad concept of “addiction” expressly precludes any narrowing of the topic to the “drug problem”—this itself being construed as defense—and the ultimately derived “war on drugs.” The resulting patterns of behavior can be termed “addictions” or forms of addiction, taken to include both substance as well as non-substance behavioral or process addictions. As seen in the foregoing, it is a “change in consciousness” that “protects” us from the fear-filled contact with our feelings. At the cost of self-destruction, however, which we must constantly carry out because the hitherto accomplished destruction elicits additional fear, which in turn must also be repressed. It is above all these pathological dynamics which can expand our understanding of the consequences of severe trauma: addiction is an escalating disease. As the chosen means of compensation can never satisfy the true needs—precisely because

10  “We need to remember that we live in a cul­ture that demands dysfunction. The purpose … is to keep us from fully experiencing the pain of the isolation, dis­honesty, illusion, and self-centeredness of living in the world we have created” (Wilson Schaef 1998, 183).

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these are being constantly repressed—a permanent state of “insatiability”11 and insufficiency results. This often results in a long-term “higher dosage” of the addictive drug or the addictive behavior (“tolerance”), in order at least to survive somehow. This increase in dosage is thus a further aspect of the escalating illness entailing mental and/or physical decline. The latter as a consequence of the direct physical effects of the drugs taken, or the permanent and excessive effects of bodily produced natural substances. When as new-born babies we are met with expectations in place of unreserved love, we soon absorb the message that the things we need in life come at the price of reciprocity, of giving something in exchange. Success becomes our yardstick in life. That means we will be either winners, or losers. When the opportunity arises for us to become the former we may develop pronounced “performancerelated addictions”; if we are less successful, we might perhaps try to dampen our exasperation via passive forms of addiction. Notwithstanding, in the end both amount to an orientation to performance.12 A Glance at the Characteristics of Performance-related Addictions Compulsivity, i.e. the incapacity for abstinence, is an expression of loss of control, which in turn nurtures the tendency towards denial, and thus the illusion of control. The latter can assume the form of an across-the-board blanket denial of “problems”; at a minimum, the refusal to link accompanying bodily consequences with an addiction to anything. All attempts to cope with addictions without recognizing them as such almost inevitably results in dishonesty, self-isolation, and ruthlessness—the latter against one’s own person and one’s health—and by assuming the role of the victim increasingly interferes with the social environment. This aspect is the connecting factor for the “infectious” destructiveness of addiction; that means a repercussion on the social environment, or in other words, society.

11  This applies literally to “addiction to eating.” The affected persons are never “satiated and satisfied.” 12  This is the reason for Wardi’s considerable surprise at the results of her investigation, namely that many members of the second generation of Holocaust survivors suffer from fear of failure, whereas others distinguish themselves through “their exceptional competence, their talent and their achievements in intellectual, social and public fields.” In both groups she had observed “elementary difficulties in the interpersonal sphere” (Wardi 1997, 119). It seems reasonable to assume that the affected persons developed this orientation to performance (in both cases!) for compensation not “despite emotional deprivation” (ibid., 120, emphasis added), but precisely because of their emotional deprivation during their childhood.

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Some Considerations for Individual Recovery from Addiction Since addiction is a societal disease one should not attempt to seek any blame in the persons it afflicts. On the other hand it would simply amount to a cruel dualism to point out the need for changing society instead. And even if in most cases the pathologic state has its roots in early childhood, it is evident that the way out cannot be to try to change the past. Focus must instead be laid on the present. We are not the helpless child any longer, we are able to take responsibility for our own lives. We can try. As we may have lost social contacts and destroyed our ability for communication, recovery will not be possible as isolated individuals. Recovery is, instead, living in process with others affected, for example in a self-help group which works along the lines of the 12-step program. As long as a predisposition exists only in the individual, it is possible to recover from addiction in this way. However, when a predisposition must be assumed as a consequence of the described mass traumatization of the entire society, then we have to include the necessity and possibility for organizations to recover collectively.13 The Difficulty of Coming to Terms with the Past in Post-World War II Europe In summary, one may say that in the post-war years in Europe, especially in those parts previously affected by the war itself and by Nazism,14 there has been an enormous escalation of orientation to performance. In the political sphere, the ground for this was laid by means of a combination of persecution of the left (“communists”) and capitalist restructuring via the European Recovery Programme (the so-called “Marshall Plan”). Considering the almost total destruction of towns and a great part of the infrastructure, it was hardly necessary to propagate justification for the “roll up your sleeves” mentality. The evolving compensatory orientation to consumption—and, as it turned out, elicited victim role15—in turn elicited cumulative repercussions on people’s willingness to perform, which was subsequently justified by arguing it was in one’s “own interest.” When we speak of politics in Europe during the second half of the twentieth century we must remind ourselves that the first phase of these politics was dominated—with respect to the political leadership—by the active participants of two world wars (among them people who had experienced World War I as children) and perpetrators as well as surviving victims of the Nazi dictatorship. And their voting base (naturally, on average somewhat younger) belonged to the 13  To be discussed in the next section. 14  In this context, it is of no import whether the victim or the perpetrator role prevailed. 15  This is expressed inter alia in the widespread racist-related fear that in the wake of self-inflicted poverty, immigrants came to Europe to take part in “our” hard-earned wealth.

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same generation. Eventually these societal players were replaced by the—as it were, doubly affected—generation of “wartime children” investigated by Sabine Bode (2005). In the meantime those generations who were born after the war have dominated, so that politicians can speak of the “end of the post-war period.” This gives the appearance—also for Germany, who due to its wartime legacy had officially politically been banished to the back row for five decades—that we have at last enabled the transition to “normality.” After the considerations above, the question may be asked: What kind of normality can that be?16 Why Germany in particular is applauded (within the country itself as well as abroad) is the capacity and the readiness to accept responsibility for Nazism and starting the war. This may rest on a misapprehension, though. Through consistent acceptance of the “atoner role” one can turn oneself in one’s own mind into the victim. The memorials for the victims of the Nazi regime, the repeatedly uttered affirmation of the special relationship to the state of Israel, and such like, can also be interpreted in the sense of Arno Gruen as stagings of emotions with no basis in actual feelings and by means of which power is exercised (Gruen 2000, 60). We can take as an example the then incumbent Foreign Minister of Germany and uncontroversial leader of the peace party “the Greens,” Joschka Fischer’s justification for Germany’s leading role in the war in Yugoslavia by using of all things the emotionally loaded catch-phrase “Never again Auschwitz!” (Fischer 1999). Another reaction comes from a general feeling that after such a long time the Germans may be forgiven for at last casting off their role of atonement. This has led to the paradoxical situation whereby on the one hand it remains a criminal offence to make use of Nazi symbols—expressly when in the pursuit of spreading Nazi propaganda—(so far so good, this taboo remains intact), but on the other hand, leading politicians are able to refer to certain persons who participated in war crimes as “Nazi opponents.”17 In other European countries, the failure to come to terms with the past varies in accordance with their degree of involvement in the war. In some countries, like France or Norway, the fact that on the one hand there was the Resistance, and on the other so many people collaborated with the German army of occupation and the Nazi secret police, has played an important role. Even Sweden, which officially remained “neutral” throughout World War II, but not only rejected Jewish refugees, but even went so far as to refuse the Norwegian King entry to the country on his flight from the German military—although German troops were permitted without hindrance to deploy on Swedish territory— has only just officially begun piecemeal to come to terms with this chapter of its history. The implications for individuals can hardly be overestimated.

16  One of Arno Gruen’s books is entitled The Insanity of Normality (Gruen 2007). 17  The Prime Minister of the Federal State of Baden-Württemberg, Oettinger, during the funeral service for one of his predecessors in April 2007.

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East Asian societies (particularly their governments and politicians) show a similar inability to come to terms with their violent past. But it is not only politics that counts. Many aspects of everyday life can still be seen as consequences of deep traumatization, for example the almost addictive attitude towards work and to learning, the seemingly ineradicable anti-communism, even called “red complex,” in South Korea, the collective reaction to the IMF bailout in 1997–98, and so on (see Heide 2000b). In Europe as well as in East Asia, the trauma of war which has affected more than one generation continues to be repressed. Instead of believing in “political” solutions such as the integration of nation states, the question has to be answered as to how any collective recovery can be achieved. New Solidarity in New Social Movements Problem and Chance To talk of trauma can be seen as more of a psychological approach than a political one. However, this false impression is due solely to the fragmentation of our thinking. Judith Herman illustrates the connection quite well. Based on her own experience as a psychotherapist and trauma researcher, she states that from the very start of her research work on psychic traumas she constantly had to fight against the general tendency shared by her colleagues to lend the sufferers too little credence. Researchers who engaged themselves supposedly “too intensively” with traumatized persons inevitably attracted suspicion, “almost as though they could be infected through the contact” (Herman 1993, 19). She depicts both trauma research as well as the cure as an emphatically “political” problem: Research on war traumas is only legitimate within a context that questions the sacrifice of young men in war activities … In the absence of a strong civil rights movement, active suppression inevitably gains the upper hand over attempts to actively come to grips with the past. Denial, suppression and dissociation exist in the collective consciousness just as in the individual. It was not until the growing political movement against the Vietnam war, the moral persuasiveness of the anti-war movement and the national experience of defeat in an unjust war that it became possible for psychic traumas to become recognised as lasting and inevitable remote damage. (Herman 1993, 20)18

18  For instance, it was not until 1980 that the diagnosis of “post-traumatic syndrome” or “post traumatic stress disorder,” respectively, appeared in the official Diagnostic and Statistical Manual of Mental Disorders (DSM) published by the American Association of Psychiatrists, and the International Statistical Classification of Diseases and Related Health Problems (ICD) of the World Health Organisation.

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Herman also stresses the necessity of a social movement for creating conditions which first enable the individuals to overcome their trauma. Individual recovery is always uno actu a social process. On the other hand, the various social movements (the “old social movements,” like the labor unions, as well as the many new ones), as radical as they may perceive themselves in their fight against the societal mainstream, are themselves part of this post-traumatic society. This means that the movements themselves must not only be “morally irreproachable” and “politically correct” or even “sufficiently militant,” but also that they, too, have to work on their own recovery. For the destroyed contact to the Self is not merely the individual and collective “disease” described in the foregoing, it is also the core of what binds us to capital. We must not only seek analytical clarification of this: we must also seek to deal with it in our Self and in our social action. Not until then will it be possible to talk of resistance in the sense of system transcendence. We must therefore transcend the limitations of the old working-class movement.19 This is not only due to the fact that the post-Fordist phase of capital accumulation has finally surpassed the “centrality of the working class.”20 Nor is the problem the tendency toward changing all activities into “productive work.”21 The problem lies much more in the fact that all these developments, including the resistance to them—and this independent of the degree of “militancy”—still take place within capital. This necessarily calls for a completely different revolutionarity. This notion is not—as far as I know—elaborated on by Holloway (2002), even though his “scream” could indeed be taken as an indication of the type of underlying antagonism; nor is it included in the critique of Holloway by the Wildcat-Group (1997), not to mention the Hardt/Negri philosophical-theoretical notion of the “Multitude” (Hardt and Negri 2004). Resistance in the absence of dealing with our own past and coping with the accompanying fear which lies deeply buried in our subconscious is ultimately doomed to lead us back into the lap of capital, no matter with what degree of resolve, intensity, and irreconcilability it may be pursued. It is no coincidence that many of today’s new social movements, in order to break through the “fear of fear” taboo, begin with the express formulation of their own fear. This could indeed serve as a tenable basis for moving the focus onto genuine needs rather than abstract interests. The practical central issue boils down to the question of how strategies for dealing with our own inner barriers can be realized by the movement. Here, on the basis of the antithetical courses of two historical examples (see Heide 2007b), I will make an attempt to outline the 19  We must keep in mind that in Marx the final goal is the Selbstaufhebung of the working class. 20  Centralità operaia is the lynchpin of operaistic theory. 21  This has nothing to do with joining in a “song of praise for productivism,” which the critics of Negri and Hardt constantly refer to (e.g. Hauer 2000); it is concerned rather with the visible actual intensive and extensive broadening of the notion of work.

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crucial problems of a new solidarity for organizing resistance in the post-Fordist era and propose ways in which the solution may be found. Historically, the “classical” cooperatives which evolved in Europe (especially in Germany) during the nineteenth century often played an important role,22 in particular as organizations of self-employed producers in a hostile capitalist environment. We must not inquire into merely why and through what the “old” cooperatives failed, but also whether—and if so what—lessons can be learned from this today. It may at first sight seem rather inappropriate to quote Alcoholics Anonymous (AA)23 as another example in this context. Not only does AA lack an open system of transcending political objectives, they even expressly exclude political debate in their communication. What does make them such a relevant example, though, lies in the object of their engagement; namely that they address directly (not politically) the basic problem of modern man having been socialized in capitalism: that is, addiction as an expression of separation from the Self. They develop concrete steps and adequate communication to support the process of overcoming the entanglement in addiction,24 and to this end are a non-hierarchical and unbureaucratic form of organization. This is what makes AA relevant and worthy of critical appraisal as an example for social resistance initiatives. The Classical Peasants’ Cooperatives in Germany In the wake of industrialization, the small peasants as non-capitalist self-employed producers found themselves increasingly caught in a tight vice between their capitalist oriented suppliers and purchasers. The first impact was on the commodity market, where pressure was exerted mainly via market prices. This was followed by growing indebtedness to moneylenders. Around the middle of the nineteenth century in Germany, small peasants set up a number of self-help associations, by means of which they mutually sought to defend themselves against economic ruin. These associations appeared at different locations and comprised trade cooperatives (procurement and sales) and credit cooperatives.

22  Under the important consideration that in the current phase of capitalism there is a dominant tendency towards “autonomy,” a sensible hypothesis would appear to be that this not only means an increase in the number of formally self-employed, but also more autonomous working conditions for salaried workers to assume a growing significance of cooperative forms of organization. 23  Based on the same model as and in close cooperation with Alcoholics Anonymous, today there is a large number of anonymous self-help groups offering assistance for substance and behavioral or processual addictions. In the following I continue to use the abbreviation “AA” when referring generally to “anonymous self-help groups.” 24  And therewith—as I have attempted to show—in capitalism as an “addiction society” (on this terminology see Niebling 1997).

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It should be pointed out that this focus on the farm producers’ dire economic situation should not detract from the fact that the background idea went qualitatively much farther. In essence it was about imparting in members of cooperative societies a feeling of inner security through the experience of a functioning community, and via this to arrive at solutions for economic problems.25 From this idea the following principles have been developed: first, the cooperative is open to all local peasants; second, the members of the society act in mutual cooperation; they are responsible jointly and severally; third, the governing body is the general assembly, in which all those members present are entitled to vote;26 fourth, the economic purpose of the cooperative is not to achieve profits, but via pricing to achieve direct benefits for its members. However, in any union of persons or entities operating in an economic (i.e. capitalist) context, “responsibility” translates into “liability,” and “mutual responsibility” then means “unlimited liability.” Thus, the cooperative needs a state guaranteed foundation in law. As the government on socio-political motives wanted to protect the by nature financially weak cooperatives, the first law governing cooperative societies was passed in Prussia in the year 1860. And this is precisely where the problems arose which were to lead to a systematic erosion of the principle of self-help cooperative societies: if we leave out those who in any case have nothing to lose, in a capitalist environment with unlimited liability the risk to the individual is too great, so that the peasants perceived that in consequence of the cooperative societies’ own experience with their capitalist environment their liability had to be limited. Due to negative past experience, many potential members—especially the more wealthy—held back from joining the movement because they were too afraid of the accompanying strict rules of liability and subsequent potential loss. Yet, these were precisely the people which “economically thinking” cooperative societies needed to bolster their capital base. For this reason the cooperatives appealed to the state to limit their liability further by limiting creditors’ rights to arbitrarily seize the assets of individual members. This “pragmatic” position succeeded over the “fundamentalists” (as one would say today), so that present-day cooperative societies do not differ from other joint stock companies with regard to their equity base. This also applies—regarding the benefits for the members—to the transition from the reimbursement via the price for the purchased commodities to the shareholders’ dividends, and from equal voting rights to voting rights based on the number of shares held. This further applies to the growing independence of the executive bodies and the resulting bureaucratization, and eventually the transformation of the cooperative society from a community group into a service enterprise whose members merely pursue specific situational interests.

25  See e.g. Compart (1977). 26  The principle of “one man, one vote” was adopted from the North American cooperative movement.

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Anonymous Self-help Groups (AA) In times of so-called “crises” of capitalist accumulation, the fear which under “normal” conditions remains tolerably repressed threatens to break out of the unconscious. This phenomenon is underscored by the increased demand for addictive drugs during such periods, for instance the Great Depression of the 1930s, with its mass material as well as mental deprivation, during which inter alia widespread alcoholism became a serious problem. In 1935, two recently “dry” alcoholics in the United States founded the selfhelp group Alcoholics Anony­mous (AA). The background was their experience of “capitulation.” They had come to realize that it was erroneous to believe they could ever “manage” their lives and that everything could be considered “achievable.” Simultaneously they gained insight into the destructiveness of their self-isolation. Behind this stood an important characteristic of their addiction, a fear-induced incapacity for open communication. They set out to regain their inner autonomy on the basis of open dialogue in a cooperative organization of self-help groups. Self help means there are no therapists, no external “experts.” This in turn means firstly: it is the individuals concerned who are the specialists for their own problem. And secondly: the objective is not oriented to a therapeutic “normalization” in the sense of adaptation to the social environment. This lays the groundwork for an open dialogue. Openness means open participation and an open result for the dialogue. Dialogue in this instance means an invitation to everyone to speak about themselves, about their own feelings, without attempting to evaluate the statements of others or proffering advice. This type of dialogue also means that everyone has their own truth, in the sense that there is no weighing up of what might be true or not. It is the sum of the individual truths that add up to the whole truth. There is no struggle for recognition. Each participant in the dialogue is per se recognized. In this way, it becomes possible to develop solidarity on the basis of empathy (Moeller 1990). Anonymous self-help groups recommend to their members 12 steps towards overcoming addiction. A plain and simple confession of the futility of continuing down the same path constitutes the “first step” on the way to recovery. It is not possible to move on to the other steps before this first step has been taken. The following “steps” go on to deal with the individual’s experiences made within and outside the group on their subsequent way to recovery. In order to regain selfresponsibility over one’s actions, it is essential that addicts take a “sober,” i.e. no longer mystifying, appraisal of the reality. This has less to do with the external reality, rather it is one’s own inner reality and one’s hitherto feeling, thinking, and action. Following a decade of manifold experiences, the principles of “organization” of the group emerged in the so-called “12 Traditions.” These could be considered to be something like the “statutes” of the community. I would like to outline27 the 27  For a more detailed study see Heide (2007b).

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central contents of these “Traditions,” as they can contribute towards understanding the core principles of self help. First, recovery is perceived as a collective process rather than an individual one. The 1st Tradition emphasizes the primacy of the group: “Our common welfare should come first …” (AA 1991, 123). Second, recovery is perceived as a process which implies an overcoming of fear. The 2nd Tradition constitutes rules that make it possible to communicate free of fear: There are no hierarchies tolerated within the group (AA 1991, 126 et seq.). The 4th Tradition (AA 1991, 140 et seq.) regulates non-hierarchical relations between the groups within the larger AA-community. It is even explicitly stated that “every group is entitled to make mistakes” (AA 1991, 141), a statement which aims at diminishing fear. The same goal is even pursued by the principle of openness. The 3rd Tradition says: “The only requirement for membership is the desire to stop drinking,” so everyone is welcome: “We are not afraid that you may cause us harm, no matter how distressed or aggressive you may be” (AA 1991, 133). Third, recovery has to be sheltered from being engulfed by the (capitalist) system. The 7th Tradition therefore constitutes financial independence, the 8th and 9th Traditions are to prevent bureaucratization, and the 10th Tradition to prevent any politicization. This means that everyone seeks recovery primarily within him or herself, instead of going outside and hurling themselves into political altercation. Similarly the 11th Tradition forbids any promotion. The principle is that the way to recovery must not be submitted to competition between providers of consumable goods. Fourth, recovery is a process of overcoming separation from the self. The 12th Tradition with its spiritual grounding of the principle of anonymity tries to counteract any temptation of “feeding” the ego, which once again would be a gateway to value orientation and capitalism. Interim Conclusion In both examples presented the objective is self-help. The aim of the rural cooperatives was to secure the survival as small peasants. This equates to a notion of solidarity in the traditional corporatist sense, namely reciprocal help within the community against the outside. As opposed to this, for the anonymous selfhelp groups, solidarity (the term is not expressly used as such) is not based on reciprocity. The groups are open to everyone with the “desire” to recover from addiction: everyone can come and go as they please, and no-one is under any kind of obligation. Hence, it is not interests that unite the anonymous self-help groups, rather it is needs. The old established cooperative principle of “one man, one vote” may well be just: it satisfies the call for equality, and so on; and it is born out of the fear of

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being disadvantaged in the absence of such a rule.28 Ultimately, it is precisely this fear which prompted the financially weak cooperative societies to woo well-to-do members, and it is that same fear which caused the wooed to impose the condition that their investment be better safeguarded by limitation of their liability and by a more favorable voting representation. The anonymous self-help groups are different: they have discovered a way in which they can welcome all and sundry into their midst—without fear. The crucial question remains as to how the social movements can learn from these examples, in what way are they relevant, and are they at all transferable. The first reaction when contrasting the existing system-transcending aim of the social movements with the “limited” aim of the anonymous self-help groups is to conclude that they are not transferable. However, this would be erroneous. Having once realized that capitalism has long ceased to be something outside us and rather that we have internalized it, that we daily reproduce it with our feelings, thinking, and action, we must necessarily go on to assume that in our future planning, our struggles, and our repeated attempts at organization, due to our entwinement in the existing situation we cannot really free ourselves if we do not first face up to our fear and attempt to cope with it. For fear—as we have seen—creates a deep-rooted pathology that impairs our power of judgment29 to such an extent that it must necessarily restrain us from any kind of system-transcending practice. The first lesson to be learnt by the new social movements from the practice of self-help groups, especially when contrasted against the experience of the old cooperative movement, is that the admission of one’s own fear and undertaking productive steps to overcome it brings about a significant gain in autonomy. Moreover, AA has successfully shown how a non-hierarchical, non-bureaucratic, cooperative organizational framework is capable of realizing such a program: it is both necessary and possible to develop an organization which fosters and even carries the necessary process of connecting with one’s own feelings and thus one’s own needs. Being carried on by “recovering” members it can remain a living organization. Many of today’s emerging self-organized initiatives—even on the “quintessential” terrain of labor unions—have come to realize that it is not enough to “defend jobs” in the outdated way; the participants increasingly come up against the barrier of their fatigue. They feel animated, though, when in the networks and organizations instead of abstract “interests” their own needs and their own wellbeing is made the starting point and yardstick of social activity,30 and when this is subordinated neither to a central bureaucracy nor to some kind of imagined far-off objective. 28  This is based on the experience that society is unequal and that the votes of the rich and therefore powerful bear more weight, an experience which is indeed being constantly reconfirmed. 29  This is the meaning of “not sober” in the terminology of AA. 30  See NCI-Network (Wanzek 2007).

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The decentrally organized candlelight demonstrations in Korea in the early summer of 2008 were a similar experience, which released people’s creative energy in an almost unprecedented manner, just because they found a way to express their own needs. Summary and Perspectives The geopolitical situation is clear: Europe can only remain united for as long as it identifies with the global capitalistic world order and hence with the hegemony of the United States. Any even marginal attempt to change this will lead—as history has shown—to immediate sanctions on the level of trade policy and then—in increasingly large doses—on the diplomatic level. This means that the truce of Fortress Europe can be maintained solely by means of continued complicity with the power politics and thus war policy of the United States. In view of the exceedingly unstable “security situation” in Northeast Asia, looking on such a scenario as an example to refer to may seem understandable. By no means, though, can it be considered as providing a firm foundation for lasting peace. Eastern Asia has experienced a similarly violent enforcement of modernity— and hence capitalism—as Europe. Today’s precarious security situation is just a consequence thereof. The region is in these times subject to the same societal pathologies as described in the European example. If there is to be any escape, then this lies in a recovery of society from the deep-rooted traumata and in consequence an overcoming of the paradigm of modernity. The remedy, though, will not be found on the level of politics, not even where this is referred to as “peace policy.” New social movements, provided they are oriented to tangible needs rather than “abstract interests,” may prove to be steps in the right direction towards a peaceful future. It is crucial that we take these “first steps.” Giving way to the urge to argue that we do not know what is to follow the first steps would merely constitute an, albeit understandable, characteristic for the state which we want to overcome. That is valid for East Asia as well as for Europe. References AA Services (1978), Twelve Steps and Twelve Traditions, 17th edition (New York: Alcoholics Anonymous World Services). In this text quoted from the German edition: Zwölf Schritte und zwölf Traditionen, 6th edition (1991) (N.P.: Selbstverlag, Anonyme Alkoholiker deutscher Sprache). —— (1980), Alcoholics Anonymous: The Big Book (New York: Alcoholics Anonymous World Services). Bode, S. (2005), Die vergessene Generation: Die Kriegskinder brechen ihr Schweigen (München: Klett-Cotta).

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Compart, E. (1977), Kapitalistische Entwicklungswege bei der Genossenschaft (Frankfurt am Main: Haag+Herchen). Ehrenberg, A. (2000), La fatigue d’être soi : Dépression et société (Paris: Odile Jacob). Fischer, J. (1999), “We have To Win This” (Interview), Newsweek, 19 April 1999 . Freud, A. (1936/1980), “Das Ich und die Abwehrmechanismen”, Die Schriften der Anna Freud, Vol. I (München: Kindler). Gruen, A. (1986), The Betrayal of the Self: The Fear of Autonomy in Men and Women (New York: Grove Press). —— (2000), Der Fremde in uns (Stuttgart: Klett-Cotta). —— (2007), The Insanity of Normality: Toward Understanding Human Destructiveness (Berkeley, CA: Human Development Books). Hardt, M. and Negri, A. (2004), Multitude: War and Democracy in the Age of Empire (New York: Penguin Books). Hauer, D. (2000), “Auch große Würfe gehen mal daneben: Antonio Negri und Michael Hardt zu Globalisierung, Arbeit und Befreiung”, analyse und kritik, 442. Heide, H. (1997), “The Creation of Individual and Collective Strategies of Survival as a Pre-condition for Capitalist Development: The South Korean Example”, Proceedings of the Fifth International Conference on Korean Studies (Osaka). —— (2000a), “Arbeitsgesellschaft und Arbeitssucht: Die Abschaffung der Muße und ihre Wiederaneignung”, Massenphänomen Arbeitssucht: Historische Hintergründe und aktuelle Entwicklung einer neuen Volkskrankheit (Bremen: Atlantik Verlag). —— (2000b), “Schumpeterian Dynamics in Crisis? The Case of Korea”, in T. Hozumi and K. Wohlmuth (eds), Schumpeter and the Dynamics of Asian Development (Muenster, Hamburg, London: LIT-Verlag). —— (2002), “Die Moderne als posttraumatische Gesellschaft”, Erwägen Wissen Ethik, 13(4). —— (2003), “Some Observations on the So-called ‘Creative Destruction’ in the Development of Japanese Capitalism”, in T. Hozumi and K. Wohlmuth (eds), After the Asian Crisis: Schumpeter and Reconstruction (Muenster, Hamburg, London: LIT-Verlag). —— (2007a), “Angst und Kapital: Warum Widerstand im Postfordismus so schwierig ist”, in S. Bologna et al., Selbstorganisation … Transformationsprozesse von Arbeit und sozialem Widerstand im neoliberalen Kapitalismus (Berlin: Die Buchmacherei). —— (2007b), “Selbsthilfe als Widerstand: Gedanken über einen neuen Umgang mit geschichtlichen Erfahrungen”, in S. Bologna et al., Selbstorganisation … Transformationsprozesse von Arbeit und sozialem Widerstand im neoliberalen Kapitalismus (Berlin: Die Buchmacherei).

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Herman, J.L. (1992), Trauma and Recovery (New York: Basic Books). Here quoted from the German edition Die Narben der Gewalt (1993) (München: Kindler). Holloway, J. (2002), Change the World without Taking Power: The Meaning of Revolution Today (London: Pluto Press). Marx, K. (1969), Resultate des unmittelbaren Produktionsprozesses (Frankfurt: Neue Kritik). —— (1973 [1857–58]), Grundrisse: Foundations of the Critique of Political Economy (London: Penguin). Moeller, M.L. (1990), “Sie wollten nichts von mir und wussten alles. Leistung und Wirkung der Anonymen Alkoholiker.” Manuscript of a lecture delivered at a continual medical education course in Hamburg, 21 November 1990. Niebling, G.G. (1997), Die Suchtgesellschaft: Zur Soziogenese eines Phänomens “individueller” Pathologie (Aachen, Mainz: Wissenschaftsverlag). Nassauer, O. (2007), “Der Ruf nach Energiesicherheit – Herausforderung für eine neue Sicherheitsolitik?” Manuskript zur Rundfunksendung “Streitkräfte und Strategien” im ndr info (Norddeutschen Rundfunk) am 10.03.2007. Available at . Schmidbauer, W. (1998), Ich wusste nie, was mit Vater ist: Das Trauma des Krieges (Reinbek: Rowohlt). SOLIKOR – Solidarity with the Korean Unions (2000), Dialogue out of Solidarity – Solidarity through Dialogue (Berlin). Available at . Thompson, E.P. (1966), The Making of the English Working Class (Harmondsworth: Penguin). Thompson, E.P. (1967), “Time, Work-discipline, and Industrial Capitalism”, Past and Present, 38: 56–97. Wanzek, I. (2007), “Netzwerker. Neue Formen von Arbeitskampf und Organisation bei Siemens”, in S. Bologna et al., Selbstorganisation … Transformationsprozesse von Arbeit und sozialem Widerstand im neoliberalen Kapitalismus (Berlin: Die Buchmacherei). Wardi, D. (1992), Memorial Candles: The Children of the Holocaust (New York: Routledge). Here quoted from the German edition, Siegel der Erinnerung (1997) (Stuttgart: Klett-Cotta). Wildcat (1997), “Open Letter to John Holloway”, Wildcat Zirkular, 39, available at . Wilson Schaef, A. (1998), Living in Process (New York: Ballentine Wellspring).

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Chapter 5

Europe and East Asia: Holistic Convergence or Fundamental Skepticism?1 Nam-Kook Kim

What Kind of East Asian Community? The possibility of building up an East Asian community has recently become a salient academic issue. Scholars often borrow from European experience to predict the possibility of regional integration in East Asia (Holland et al. 2007; Welfens 2007; Kim and Ruffini 2007; Webber and Fort 2006; Kim and Schmitter 2005; Moon and Andreosso-O’Callaghan 2005; Min 2005; Choi 2004; Jo 2004; Koo 2002; Kim and Koo 2000). There are at least three different viewpoints on East Asian integrations: holistic convergence, procedural divergence, and fundamental skepticism (Kim and Schmitter 2005). Many scholars presuppose an optimistic view in which an East Asian community can be created if it follows the incremental or functional approach of European integration. They also believe that the European path represents a universal route to regional integration, so assume it can be applicable to any other region. According to this kind of “holistic convergence” view, the economic spillover effect is important. For example, if East Asia succeeds in reducing large exchange rate fluctuation and wide income disparity, today’s Europe can be the future of East Asia (Moon 2009; Ogawa and Junko 2007; Dieter 2003; Park 1999). By contrast, some scholars argue for the “procedural divergence” in which various open paths for integration can exist depending on regional circumstances even though the final goal would be similar for Europe and East Asia. These scholars focus more on the different experiences of culture and identity than on the same structure of power and interest. According to this view, East Asia has just recently started to form its own image of community through the common encounter of the 1997 economic crisis and may take different routes toward integration from that of Europe (Webber and Fort 2006; Murray 2005; Kim and Lee 2005; Yu 2003; Katzenstein 2000). 1  An earlier version of this chapter appeared in Asia Europe Journal (2008) and is reused here with kind permission of Springer Science+Business Media. My thanks should go to Lay Hwee Yeo, Philomena Murray, Martin Holland, Eiji Ogawa, and Chayodom Sabhasri for their insightful lectures and conversation at the 2008 Seoul Bangkok Summer School, where I learned a great deal for this chapter.

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Interestingly, there are also scholars who show profound pessimism on the possibility of East Asian regional integration, placing emphasis on difference rather than similarity between Europe and East Asia. According to this “fundamental skepticism,” regional integration in East Asia is neither possible nor desirable because of its hegemonic regional order and incompatible antagonistic nationalism. This view worries about the dangerous result that a hasty manner of integration would bring if there is no antecedent stage in which the resurrection of Japanese imperial ambition is constrained and the non-hegemonic cooperation of China is guaranteed (Koyas 2003; Pocock 1997). Among these three perspectives this paper takes the position somewhere between the views of procedural divergence and fundamental skepticism. My stance can be classified as supporting a realistic and intergovernmental approach rather than a functional and supranational one. While the former emphasizes a series of rational choices made by national leaders reflecting the preferences of national governments, the latter focuses on spillover effects of a functional task which makes international cooperation possible (Moravcsik 1998, 18; Haas 1958, 16). To obtain a clear picture of the ongoing development in East Asia, I compare the early stage of European integration with the current East Asian situation in terms of driving forces on three different levels: ideas, national interests, and international circumstance. First, there were various ideas toward European integration among intellectuals as well as political leaders. Those ideas provided conceptual clarification of and grounds for justifying integration as a framework for peace in Europe. Without such visions no movement would have started the initial stage of integration. Second, national interests mean a preference for a nation state which reflects the pressure of domestic politics in terms of both economic interest and national pride. When national interests of different countries converged at a certain point of negotiation, integration was accelerated. Third, however, these two factors alone were not enough for integration to be fully realized. Only when ideas and national interest met international circumstances that strongly supported integration was such movement advanced. What, then, is the current situation of East Asian integration? There are already various levels of association among Asian countries. For example, ASEAN has been the most active association in the region since its establishment in 1967. Other interstate associations in Asia include: APEC as a regular meeting entity for economic cooperation since 1989; the Asian Regional Forum (ARF) as a security association since 1994; the East Asian Community (EAC) that consists of ASEAN + Korea, Japan, and China since 1997; the East Asian Summit that consists of the 13 EAC countries + Australia, New Zealand, and India since 2005; and ASEM of 16 Asian countries and EU member states since 1996. One can say that Asia shows some degree of integration judging from the existence of these interstate networks. While each association has different aims, members, and level of commitment, it generally targets cooperation in the areas of economy and security. In principle, economic integration is advanced from the

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stage of free trade agreements (FTAs) in which tariffs are reduced to the zero point among related parties, to customs unions in which no tariff among member states and common external tariffs against outside countries are imposed, to a single market in which the free movement of goods, services, capital, and people are guaranteed, and finally to an economic union in which legally binding common economic policy is realized among member states (Cini 2003, 29). Integration in the area of security consists of three levels of development. In the first stage government officials and civil specialists create a pilot channel to deal with a security agenda. In the next stage, these channels become more stabilized through regular talks tackling a common agenda among member states. In the third and final stage, member states operate a standing committee through which trust building and disarmament, with binding effect, take place (Han 2006, 580). From the viewpoint of functional operation, the degree of Asian integration shows promising development. FTA as the first stage of economic integration has been completed or is in ongoing negotiations among several countries. Security cooperation has already passed the first stage and has reached the second stage with regular talks based on the ARF. However, when one thinks about the regional boundary and common identity that these associations have shared, it is not easy to evaluate a real degree of Asian integration. In other words, the regional base of these associations is too big or too diverse to be regarded as a single community with a shared identity. Furthermore, there is huge asymmetry of power among member states pursuing regional integration and so far there is no consensus on the final goal of integration. Of course, one can dismiss these claims based on constructive theory that presupposes an incremental learning process and eclectic adjustment through changing perception during the process of integration. Constructivism says that there is no need to arrange everything in advance. It believes the questions for what, and by whom the integration takes place are gradually decided through trial and error. But this perspective assumes that integration is unconditionally and transcendentally good. Should integration be taken for granted as an inevitable direction for East Asia? I believe that if there is not enough consensus about integration for what, by whom, and by which method, such effort would be integration merely for the sake of integration, which could easily lose its way when circumstances change. Consequently, it is meaningful to clarify the situation of East Asia through comparison with the early stage of European integration in terms of ideas, national interest, and international circumstance. Ideas always come first, followed by national interest contests, and eventually the international circumstance conditions the context. I compare the multilateral approach in Europe with imperial hegemony competition in East Asia, Adenauer’s regionalization policy in Europe and the Yoshida line of Westernization by detouring from East Asia, and the United States’ and Russia’s different roles in the two regions as external forces constraining the international order. These standards of comparison shall inform us of the similarities as well as the differences between Europe and East Asia. We can then have a clearer picture of the possibility of an East Asian regional community.

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European Experience Ideas Diverse ideas of a European integration have marked the history of Europe. Dante, in his work the Divine Comedy, written in 1306, argued for the construction of a unified Europe with a European emperor at its center. In 1795, Kant believed that a permanent peace was possible with the establishment of a single European union founded on congenial regime and law. In 1798, Jeremy Bentham in his work Principles of International Law argued for the establishment of a European Assembly based on European citizens, and in 1815, Claude de Saint Simon projected in Reorganization of the European Society a European integration through the establishment of a European Assembly with France and the United Kingdom as its central figures (Kim 1999). While the debates on an integrated Europe before the nineteenth century were mostly idealistic ones developed by savants and literary scholars, those that flourished in the twentieth century were advanced by politicians, reflecting the desperate reality of a Europe that had suffered two devastating wars. For instance, Richard Coudenhove-Kalergi, the Austrian promoter of the Pan-European movement, suggested the foundation of the United States of Europe in 1923, and the French Minister of Foreign Affairs Aristide Brian argued for the creation of a European Union in 1929 in concord with the German Minister of Foreign Affairs Gustave Stresemann. Altiero Spinelli and Ernesto Rossi of Italy argued in 1941 that peace in Europe was possible only through the abolition of individual sovereign states and the achievement of unity under the federal state of Europe (Lipgens 1985, 471–84). In September 1946, during his speech given at Zurich University, Churchill claimed that Europe should show solidarity before war destroyed its brilliant civilization and ultimately the whole world, and also that Europe’s reconstruction would be possible only after the reconciliation of the two former enemies, France and Germany. For Churchill, battles had ceased but risks still prevailed, and peace should be promoted through the construction of the United States of Europe by countries capable of doing so. Churchill also stated that the United Kingdom postponed participation in the European integration because it was already a member of the British Commonwealth, a powerful global organization, but nevertheless the continent absolutely had to achieve union through extended nationalism and a common citizenship. Such efforts by Churchill bore fruit with the opening of the Hague Congress in May 1948, and ultimately led to the foundation of the Council of Europe in 1949 (James 1974). On 9 May 1950, the French Minister of Foreign Affairs Schuman delivered a declaration that aimed to eliminate all possibilities of war between France and Germany, by creating a single authority regulating two relevant industrial fields: coal and steel. He claimed that Europe underwent war because it failed to achieve a single European unity. Accordingly, by having a single authority managing

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the coal and steel that had been materials for weapons and munitions, Europe could recover its peaceful state and avoid further wars. Schuman foresaw that a European unity could be achieved not by a unilateral plan, but by multilateral cooperation. Through the efforts of Schuman and Monnet, the two carriers of the Schuman declaration, six European countries (France, Germany, Italy, Belgium, the Netherlands and Luxembourg) made an agreement leading to the foundation of the European Steel and Coal Community, the very foundation of the European Union (EC 1990). Jean Monnet, as a pragmatic government official and a father of the European Union, established a high authority that comprised European elites who shared a European vision detached from national interests. He adopted step by step functionalism that brought a chain reaction, one change inducing another. He believed that unity in Europe does not create a new kind of great power; it is a method for introducing change in Europe and consequently in the world in which a permanent modification of relations between nations and people occurred. Above all, for Monnet, European integration was a silent revolution in man’s minds. This was the process of civilization itself in humankind’s history (Monnet 1962, 203– 11). Many advocates of the idea of European unity had in mind the clear objective of preventing war and achieving peace in Europe. Their argument did not contain any hegemonic ideas for the interest of a particular nation, due to the multilateral framework set up throughout the history of Europe. Europe, the founding continent of nation states, has experienced incessant wars among its countries, driven by the desire to expand their territory. Such historical experience has developed a multilateral framework modulating diplomatic relations according to generalized action principles. Multilateralism, restricting one-sided power and laying focus on equilibrium, was thus a dominant way of resolving conflict, a lesson drawn from the history of Europe. Hence, peace in Europe could not be pursued upon a hegemonic order portraying the power superiority of one particular nation or party. This factor was reflected in all ideas advocating the integration of Europe and developed into searching for adequate ways to advance European unity through the contribution of big and small countries in co-existence. But integration does not happen with only idealistic thoughts. The first step of European integration showed possibilities of progress after the six participating states’ interests were all ensured beyond mere ideas. National Interests It was France that was to hold the leadership position among the six participating states in the early stage of European integration. There are at least three reasons for France’s enthusiasm for the creation of a European entity. To begin with, France believed it could secure lasting peace in Europe by tying Germany to the European integration framework. The post-war French leader, De Gaulle, wanted to quickly forget the German invasion during World War II and resurrect France

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as a Great Power. To such end, he removed any possible foundation for German rearmament through establishment of the European Coal and Steel Community (ECSC), allowing any German military ambition to be controlled jointly under the ECSC framework. De Gaulle recognized that German destiny was at the heart of Europe’s future even though the divided post-war Germany was not an immediate security threat. In fact, he wrote that everyone had to pay close attention to how the German evil genius could be suppressed (De Gaulle 1971). Secondly, France was driven by the desire to build a Europe free from US interference. De Gaulle’s desire for a Europe constructed solely by Europeans manifested in the 1963 and 1967 vetoes against UK membership to the EEC. He considered the UK to be a spy for the US and thought UK participation in the process of European integration would eventually lead to American involvement in European affairs and consequently to a situation wherein Europe would fail to remain free from American influence. In other words, he thought the anti-European attitude of the US and Britain would impede the cultivation of the principle of Europe by Europeans. De Gaulle’s attitude in this respect was demonstrated when he isolated Britain by not notifying them in advance of the 1950 Schumann Declaration (Dinan 2004, 39). Thirdly, by reestablishing itself as a leader in Europe, France dreamt of ultimately becoming a leader in the world. Though it came out as a winner in World War II with the help of the US, France desired to escape the American shadow and become the leader of an independent Europe and ultimately a power that vied for influence with America on the international level. However, as an ardent French nationalist, de Gaulle believed that the creation of a strong superstate of Europe was unrealistic and misdirected. Thus, he saw a loose European network of nation states as the ideal future for Europe. Germany, one of the two players that leads the European integration together with today’s France, had a clear understanding of what the project involved in the 1950s. Germany was a defeated nation in World War II and desired to return to the world stage as a normal state. It saw European integration as leverage to achieve this end by becoming a member of the EU. Adenauer, the post-war German leader, chose regionalization in Europe as the strategy for the recuperation of national standing and overcoming a divided Germany. In other words, with its efforts for European integration in the background, Germany could rid itself of the image of having been a two-time aggressor of world wars. It could then achieve a German reunification of a broad meaning through the participation of East and West Germany as members of the European Union. Adenauer’s regionalization strategy can be seen in two major concessions that accompanied its apology for the past. The first concession was the German acceptance of the French suggestion in 1950 that the steel and coal in the western region of the Ruhr valley, which belonged to Germany, come under shared supervision. If Germany was not a defeated nation, and was instead a normal sovereign state, this French proposal would have been hard to accept. However, it accepted this shameful situation to realize the future goal of becoming a normal

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state. The second concession was its agreement to the French suggestion in 1962 for a common agricultural policy, which was disadvantageous to Germany. France was a major producer of agricultural surplus and Germany a major importer of agricultural goods, so the policy enabled French to export more products without tariff barriers, especially to Germany. Germany has a tendency to consider the financial cost and the burden of its substantial contribution to the EU budget as a kind of war reparation as the defeated nation in the First and Second World Wars. The European Union would not have been possible were it not for Germany’s consistent position and concessions. It accepted its fate humbly as a defeated state and did not dodge its past, but instead faced the reality of maintaining friendly relations with other European states, a position that eventually helped healing war trauma in the European continent (Adenauer 1963). Britain, one of the big three of today’s EU, did not participate in the beginning stages of the European integration process. It had not, relatively speaking, suffered from territorial invasion and had been one of the clear victors of World War II. For these reasons, it would have been expected to play a major role in the reconstruction of Europe, but in reality this was not the case. Britain in the 1950s was still entrenched in the realities of its past glory, that is, the legacy of the British Empire and its over 50 commonwealth nations. Its imperial legacy of an empire where the sun never sets led Britain to see itself as the world. It could not, therefore, conceptualize participating merely as one of the member states of the European integration process. In the 1950s, the Labour Party was aggressively seeking to nationalize and establish a strong welfare system, and thus regarded the integration attempt as a ploy of the capitalists on the continent to create a cartel. Furthermore, the Conservatives viewed integration into Europe as a demand to give up the British tradition of parliamentary sovereignty. Interestingly, as the ECSC emerged more successfully than expected, Britain formed an organization to counter the ECSC, the European Free Trade Area (EFTA). Britain succeeded in two steps in 1958 and then 1959 to create an EFTA with the support of Austria, Denmark, Norway, Portugal, Sweden, and Switzerland. However, it soon realized American opposition to a divided Europe, and thus applied for EEC membership and distanced itself from EFTA. But the UK failed twice to enter the EEC in 1963 and in 1967 due to de Gaulle’s vetoes. Only after de Gaulle’s death in 1971 could Britain start negotiation again and eventually enter the EEC together with two other countries, Ireland and Denmark, in 1973. The Benelux countries were not major actors in the early stages of European integration, but played an important role in its progress. These three nations understood where the world was heading and, through their historical experiences as supporters of cosmopolitanism, knew how to use this world trend for their national interests. Therefore, they participated actively and strategically in the European integration from the beginning. The Belgian Foreign Minister Spaak led negotiations at the Messina Conference which began in July 1955, and through

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the Spaak Report contributed to the transition from the ECSC to the EEC. Italy also wanted to participate in the developments of Europe even though the major players maintained a relationship of lukewarm reception or downright dismissal of Italy’s importance. Italy became a founding member state by showing its intention to act as a representative of the Southern European region and to be an active participant in European integration. International Circumstance Ideas advocating European integration and the position of each country with shared interests in these ideas saw the light when they finally met with adequate international circumstances. The diplomatic interests of the winners of World War II (Britain, USSR, USA) changed with the breakout of the Cold War. The United States, in growing need of a unified Europe capable of hampering the expansion of Soviet communism, decided to support the continent’s reconstruction by enforcing the Marshall Plan in 1948. The Marshall Plan aimed to fill the vacuum of power resulting from the economic weakening of the UK, France, and Germany, and take measures against the threat of the expanding communism of the Soviet Union. The US thought that leaving Germany in its abnormal, marginalized state would certainly expose the country to communist influence, and ultimately lead to the expansion of communism throughout Europe. Accordingly, the US actively developed the idea of European integration in order to restrain not only the communization of Germany, but the communization of the whole of Europe. In pursuing the process of European integration, the US enlarged its influence through bringing economic support to Europe. The US Marshall Plan provided $14 trillion for the economic reconstruction and recovery of the continent, and founded the Organization for European Economic Cooperation (OEEC) with 17 member states in 1948 for efficient distribution and use of the support. In September 1950, as the Korean War broke out, US Secretary of State Dean Acheson pointed out at the NATO foreign affairs ministers’ meeting in New York that the rearmament of Germany was inevitable (Dinan 2004, 58). On this basis, Germany recovered an ordinary level of military capabilities. Its entry into NATO in 1955 marked the return of the country as a whole, self-standing state in the Cold War era. Katzenstein and Hemmer (2002) clarified the background of the US’s policy toward Europe in the early stage of the Cold War era in terms of a combination of identity and material factors. They explain the US policy makers’ identification with Europe and the perception of Europe as belonging to the same political community that the US must help. They also explain the strong economic links between the US and Europe that provided ample material incentives. According to them, the collective identity and material incentives of the US toward Europe made possible a multilateral approach in the post-war establishment of NATO, and thus eventually helped the emergence of a regional community in Europe.

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In contrast, the US viewed Asia as barbarian and obedient, so the goal was not multilateral cooperation among equals, but one of unilateral US dominance. The belief that Asians were not only foreign, but also inferior helped push US policy makers’ to support unilateral or bilateral rather than multilateral policies in Asia (Katzenstein and Hemmer 2002). As a French philosopher and member of the Resistance Joseph Rovan stated that the US has, whether Europe accepted it or not, been the mother-state of the creation of a European community (Rovan 1992). East Asian Reality Ideas While ideas for European integration pursued coexistence based on a multilateral framework, discourses on integration in East Asia from the nineteenth century to the early twentieth century supported hegemony-oriented imperialism or rather its counterforce, anti-imperial solidarity. This was perhaps a reflection of the East Asian situation in which traditional Chinese hegemony and expansion of Sinocentrism dominated. Japan later replaced China’s role with the idea of a Greater East Asia in the early twentieth century. Fukuzawa Yukichi, a Japanese intellectual of the nineteenth century, argued “Leave Asia, Enter Europe,” and denied the validity of feudal convention, Chinese classics, and Confucianism, criticizing these as great obstacles to the modernization of Japan. He tried to build up Japan like the Western powers by adopting Western cultural practices. He then insisted that the Chosun Dynasty and China ought to be colonized by this brand new Japanese civilization instead of the Occident (Fukuzawa 2006; Maruyama 2007). Likewise, “the Iljinhoe” (meaning Progress Party), a pro-Japanese organization in Korea, had supported the idea of the Japanese annexation of Korea initiated by Tarui Dokichi. Dokichi advocated Japanese annexation of Korea to create a single nation which would then ally itself with China as a way of opposing Western aggression. He dreamt of a bloc of Asian nations led by the Japanese leadership and free of Western powers (Tarui 1963). What Sun Yat-sen, one of the most famous Chinese nationalists of the early twentieth century, thought about anti-imperial solidarity in East Asia was well reflected in an editorial essay “Pan-Asianism” in the Shanghai Republic Daily in 1924. In this editorial, he stated that Japan had defeated Europeans in the Russo– Japanese War and that this could inspire Asians to join the pan-Asian movement. But he underlined genuine pan-Asianism should be based on morality, humanity, and justice. Since Oriental culture was based on the rule of morality as opposed to the rule of power in Occidental culture, Sun contemplated how powerful races from Europe were to be resisted for the suffering Asians. For Sun, Japan had already become used to the European rule of power, but had an intrinsically Asian rule of morality as well. Hence he added that Japan could be either a puppet of the

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West ruling with power, or a bulwark of the East ruling with morality and it would be utterly up to the Japanese people to decide. To Sun, though, it was totally clear which should be chosen (Sun 2005, 166–78). Ahn Joong Geun, a historical figure from the Korean independence movement of the early twentieth century, represented his views in his “Theory for the East Asian Peace,” written in Lüshun prison (1910). He had once supported Japan in the Russo–Japanese War, a conflict between Asians and Europeans, because he bought the Emperor of Japan’s words guaranteeing Korean independence and peace in Asia. But matters developed totally differently. He thus warned that Japan should not harm its identical racial neighbor, which was certainly against nature’s law, otherwise Japan would inevitably be confronted with a fatal catastrophe (Ahn 2005, 205–15). Unlike those of the late nineteenth and early twentieth centuries, discourses on an East Asian community advanced in Korea, China, and Japan since the 1990s do not display any hegemonic evidence from past discourses. Korea’s East Asianism led by Professor Choi Wonsik and Baek Youngseo mainly in “Changjak and Bipyeong” (meaning Creation and Criticism) urges that these three East Asian countries should discard mutual exclusiveness and establish co-prosperity and peace through exchanges in national, social, and individual dimensions such as building an economic community, co-authoring history textbooks, and organizing civil peace campaigns (Choi 2000; Baek 2002; 2005). Choi and Baek’s answer to why East Asianism is needed is that binding Korea, China, and Japan will transform them as a unit of new thinking, key to dismantling the old framework of triangular alliances: North Korea, China, and Russia versus South Korea, Japan, and the US. They want to begin a new era out of the old Cold War paradigm (Hankyoreh Newspaper, 28 December 2002). Wada Haruki, professor at Tokyo University, urges for the establishment of an Asian Community dealing with growth, environment, welfare, and common security, which consists of ASEAN, Korea, China, and Japan within his concept of Northeast Asia’s shared house. Given his outspoken leftist position, what is peculiar about this argument is that he places the US in Northeast Asia’s shared house, and states that it is better for Asians to cooperate with Americans rather than exclude them (Wada 2003). Meanwhile, Professors Jaebong Ham and Seokchoon Yoo at Yonsei University in Korea refer to a unique idea of Confucian capitalism in Asia, highly appreciating the fruit of the combination of the two traditions, Confucian values and the capitalistic economic boom. This conception of commonality in East Asia was paid considerable attention, but became less convincing after the Asian economic crisis. Nonetheless, Confucian capitalism is still considered a new viewpoint explaining East Asia’s common identity in the Western academic world (Ham 2000; Yoo 2003). Although discourses on East Asia in the past and present definitely show differences in terms of imperial hegemony and peaceful prosperity, comparison between the two eras reveals that they have one thing in common: both past and present discourses tend to interpret East Asianism as the antithesis of

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the West, which would induce biased Asiacentrism. In other words, being so obsessed by Asia as the antithesis of Europe, East Asia may wrongly believe in Asiacentrism, which is exclusive towards countries outside of Asia. Although it is quite meaningful to rediscover Asia as an alternative to Eurocentrism, it will eventually provoke conflicts under the center and periphery framework as in the discourse of Eurocentrism: we in Asia are the center, and you, everything else, is the periphery. Ideas toward European integration in the 1940s and 1950s are mentioned in the same breath as recent East Asianism, but after two World Wars Europe had more desperate reasons to integrate. Similarly, the more practical ideas of politicians were dominant in Europe while the rather idealistic concepts of intellectuals are still dominant in East Asia. Discourses on integration by politicians in East Asia seem to be too risky because such suggestions have given rise to complicated emotions and doubts over their intentions among people in East Asia. Consequently, despite deep and broad recent academic debates in the East Asian community, there is still neither a clear blueprint, nor concrete incentives for future integration. National Interests If we consider five of the six founding countries of ECSC in the context of East Asia, the vanquisher France is comparable to China, defeated Germany could be compared to Japan, and the three Benelux countries to Korea. While most European countries stood on the side of the liberal camp when the Cold War started, East Asia was divided on the basis of ideology between socialists and liberalists. The hostile confrontation of allies including China, North Korea, and Russia on one side, South Korea, Japan, and the United Sates on the other lead those countries to be always wary and to impede each other’s expansion, a situation hardly conducive to initiating integration. China’s attempt to bring Japan into the frame of regional integration was realized only in 1997 at the ASEAN+3 summit. Although it was indeed Singapore that took the initiative to invite the three countries to join ASEAN, the idea, backed by Malaysia, soon became concretized in the East Asian Community (EAC). Since China has important influence in the ASEAN countries, EAC has had the effect that tying Japan to the framework has been advantageous for China. Just as France did in the early stages of European integration, China has always tried to be the leader in Asia by tying up Japan, and eventually a world leader by constraining the United States. However, Japan was reluctant to join ASEAN+3, where China had a relatively stronger influence. So Japan proposed the East Asian Summit (EAS) composed of ASEAN+6 including New Zealand, Australia, and India. Although ASEAN took the driver’s seat in deciding on the three candidate countries because of disagreement between China and Japan, the Japanese initiative eventually received support from the US, Indonesia, and Singapore and was realized in the form of the East Asian Summit in 2005 (Kwon 2006). As a matter of course, regional

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boundaries and shared identity are hardly consensual in this conference group. Whether New Zealand, Australia, and India can be considered part of “East Asia” is a puzzling question. Consequently, why did Japan try to enlarge the boundary of integration thus? Japan’s behavior can be understood in the foreign policies established consistently since Fukuzawa Yukichi’s “Leave Asia, Enter Europe” theory. According to the Yoshida line drawn up after World War II by Prime Minister Yoshida Shigeru, the path that Japan had to take was to find a way to step directly forward to the world arena by detouring from East Asia, instead of facing its history as a defeated country in the regional framework. In other words, the country declared as the basis of Japanese diplomacy and politics adoption of the fundamental principles of Western liberal democracy, such as liberty, democracy, peace, market economy, anti-socialism, state pacifism, and maintaining an alliance with the US. Japan’s attitude can be compared to that of Adenauer’s Germany which tried to regain a leading position in the world arena by using the European integration process as leverage. One can also contrast Japan’s position with the regionalization policy of Germany in which a thorough reflection of the past was presupposed. Japan’s Westernization strategy under a regional roundabout route is an attempt to disregard the way China and Korea always require Japan to face its imperial history. Japan’s response appears in the expansion of the East Asian frame by including Australia, New Zealand, and India. In contrast with Germany, which was in need of leverage in Europe, Japan had no problems in competing economically in the world arena without an East Asian community, and furthermore Japan did not express any intention of contributing to or leading the world in political and military areas. Already in the 1940s, Yoshida had asserted that Japan was closer to Europe than to Asia considering the government, economy, industry, and the level of social development and had criticized national military authorities who were consolidating their political position by refusing to cooperate with the US or Britain for exploiting anti-foreign power feelings (Hiroshi 2007, 8–12). The ASEAN+6 suggestion reflects that Japan is still following the Westernization approach through a regional roundabout route. This stance shows Japan’s intention to avoid facing its uncomfortable past of imperialism in East Asia. Interestingly, compared to China’s ASEAN+3 and Japan’s ASEAN+6 as an East Asian regional framework, Korea is seeking a totally different community that includes Korea, China, Japan, North Korea, Mongolia, the United States, and Russia after the launching of the Presidential Committee on Northeast Asian Cooperation Initiative in 2003. The Korean government is claiming that most of the discourse on East Asian community based on the three countries Korea–China– Japan is too idealistic and lacks reality, especially because discussion on security is not included. Therefore, for the discourse on East Asian community to be realistic, the Korean government considers the eventual inclusion of the US and Russia to be imperative. It also compares a series of building processes for an East Asian

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community with the European integration and draws some implications such as the right order of feasibility, adopting a gradual approach, including the US and North Korea, and using an FTA as a means for integration (Lee 2006, 19–21). Thinking about the roles the three Benelux countries played in the process of European Integration, Korea’s idea for a Northeast Asia era is a challenging plan. The three Benelux countries were granted equal participation and respect in the integration process, but they never suggested an independent plan for integration and never put themselves forward to intervene or change the flow of European integration. They have become familiar with a position of pragmatism through which small but strong countries overcome their limits and maximize their interests by joining world political trends. For the three Benelux countries, an initiative to lead Europe by leaving out France, Germany, and Britain is far too extravagant and would be foolish behavior that lacks understanding of its own position in reality. By contrast, Korea actually wants to play the role of a France or a Germany in Asia. This could be an unrealistic position in which Korea lacks proper understanding of world power politics. However, its challenging attempt to introduce a reckless project by overcoming the objective conditions is something nobody can imitate and is in itself a strength. Why, then, does Korea expect that China and Japan as well as other neighboring countries would give thought to its position? One possible answer is that compared to Japan and China, who are struggling for hegemony in Asia, many countries would be relieved to think that at least Korea would not be supremacy-oriented because of its size and population. When one considers the European integration experience together with the East Asian reality on the level of national interest, East Asia is in a situation where each country is searching for expansion of its own influence in the region so as to achieve its national interest. Discourse on an East Asian community does not go with first reaching a consensus on a concrete identity and norms. There has certainly been some effort of integration among East Asian countries, but it is unlikely that the vector of national interests will converge on regional integration. Nevertheless, one positive development is the increasing economic cooperation among the region’s countries, especially since the 1997 economic crisis. For example, at the ASEAN+3 Finance Ministers’ Meeting in May 2000, finance ministers agreed to promote the Chiang Mai Initiative that aimed to address short-term liquidity difficulties and to supplement the existing international financial arrangements. The Asian Bond Markets Initiative (ABMI), endorsed at the ASEAN+3 Finance Ministers’ Meeting in August 2003, also aims to develop efficient and liquid bond markets in Asia enabling better utilization of Asian savings for Asian investments. With increasing economic cooperation, traditional triangular blocs between south and north based on ideological position are also blurred (Moon et al. 2005; Ogawa and Junko 2007) Considering the different regional base in the discourse on an East Asian community, the boundary claimed by Korea is the smallest, China’s ASEAN+3 is the second, and Japan’s ASEAN+6 is the largest. As mentioned, Japan’s suggestion is a reflection of its long-time diplomatic principles since World War II in directly

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moving towards the Western world by going around the East Asian region. With respect to the practice of concentrating too much on the modern nation state system, some civil rights activists, including Koyas Nobukuni, criticize the reality of running into regional structures for achieving national interest and rather seek a postmodern solidarity which would transcend the borders of East Asian countries (Koyas 2003). A salient asymmetry among regional countries in terms of size and population makes seeking postmodern solidarity a way to go beyond the nation state system. This is certainly a fresh suggestion, but is still an ambitious ideal given the East Asian situation of animosity without reconciliation of the past. International Circumstance With the abstract ideas for integration by intellectuals and the asymmetry of national interests and competing hegemony among regional countries, East Asia has not yet reached a consensus with respect to the goal and method of integration. As such, are international circumstances also holding up East Asian integration? We can see a simple distinction between the two continents through comparison of the recent situation in Europe with that of the early years in the European integration process. Above all, the Soviet Union, the common enemy that had menaced Europe in the 1950s, disappeared. East Asia does not have such a single visible foe, thus no apparent threat from the outside. This would mean a less urgent situation to speed up integration, unlike the case of Europe in the 1950s in which the US desperately wanted to block the expansion of the Soviet Union through a unified Europe. Nevertheless, there is also the positive development for integration. The traditional triangular alliance between China, North Korea, and Russia versus Japan, South Korea, and the US has obviously been fading away. This creates a more favorable situation for regional integration because of the absence of confrontation due to ideological differences. Especially in the area of economic cooperation where various multilateral and bilateral FTA talks are going on. For example, ASEAN countries have agreed to establish an ASEAN FTA in the region and expanded the area to Korea, Japan, and China. China’s proposal for negotiating FTAs with the ASEAN countries stimulated Japan to increase the speed of its negotiation with the ASEAN countries. Japan’s FTA with Singapore in turn stimulated neighboring countries such as Thailand and Malaysia (Itoh 2005). China actually concluded the overall scheme of FTA with ASEAN countries in 2005 and Japan did the same in 2007. Interestingly, despite efforts from the government, economic ties in the Asian region are still largely driven not by government arrangements, but by market force in the private sectors (Akaha 1998; Pempel 2007). Multilateral cooperation in non-traditional security areas such as environment, migration, drug smuggling, public health, and terrorism is also contributing to build mutual confidence among Asian nations (Akaha 2007). In the process of increasing cooperation in the Asian region, China would acquire the chance to regain hegemony in the long run and the US would keep

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an eye on Beijing, considering it a potential competitor. The American authorities would prefer to bolster Japan for a while, facing the possible situation that China would become an axis of hegemony in the region. However, China does not want serious conflict with the US. It has needed the US’s support in promoting economic success through the 2008 Olympics. Hence China regards the US as a short-term partner, though also a long-term competitor. Furthermore, China does not want instability in the East Asian region triggered by North Korea, its longtime ally. At the same time, China has shown a deep ambition to be a superpower using its vast aid to Africa for resource diplomacy. However, China still struggles against Japan to take initiative, and there also remain ostensible conflicts between the two main powers on account of past wrongdoings. The general attitude of Tokyo is consistently cosmopolitan, being tied up with Washington in order to control expansion of Chinese influence over East Asia. While China and Japan fiercely keep each other in check, the US is ultimately becoming a stabilizer, retaining control over Chinese hegemony in the region. Undeniably, it is difficult to say that international circumstances are showing positive signs for East Asian integration. This position is reinforced by the fact that East Asia has been the only region that has not been given any kind of regional organization supported by the US. Europe and East Asia: Similarity and Difference Every culture is unique, so finding difference rather than similarity between Europe and East Asia would probably be an easier task. There are certainly many differences between the experience of European integration and the reality in East Asia. Comparison, with a focus on the three different levels of ideas, national interest, and international circumstance, confirms such a difference from both sides. With respect to ideas, while European ideas for integration showed equal participation in the process and reciprocal respect for balanced relations based on a multilateral tradition, discourse on an East Asian community in the nineteenth and early twentieth centuries were either to justify imperial ruling or anti-imperial solidarity among Asian peoples, which reflected the regional order of the historical unilateral dominance of one hegemonic country. While many European ideas came from politicians with practical plans for action, discourse on an East Asian community is performed mainly by intellectuals lacking concrete action plans, despite the high quality of academic debates in terms of breadth and depth. With respect to national interest, the difference becomes obvious when one compares the routes followed by Germany and Japan after World War II. The so-called Adenauer Line and Yoshida Line illustrate the contrasting paths that the two countries took to return to the world stage as normal states. Both Adenauer and Yoshida criticized the pre-war regime of its own country, and went to jail for their anti-government positions. When the war was over, the US selected the two men as leaders of each country. In 1944, Adenauer emerged from prison in

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Brauweiler, where he had been held by the Nazis, and became mayor of Cologne with the help of the US occupying forces. He eventually became Chancellor of Germany. Yoshida was also imprisoned by the military government after he retired as ambassador to Britain in 1938 and argued against the Pacific War. He returned to the cabinet at the end of World War II and was selected as Prime Minister by the US occupying forces. However, the two men’s policies were different. While Adenauer adopted a regionalization policy in Europe as a way to return to the world stage, Japan adopted a Westernization policy to detour from East Asia. This difference has brought contrasting results in which Germany did play a positive role in regional integration, but Japan makes negative contributions to the efforts of a regional community. As a result, war trauma still remains deep within East Asia while it has been reduced in Europe. Even though France and China commanded moral and political leadership, if Germany and Japan did not respond to those initiatives, it is unlikely that any regional community building will be achieved. In this regard, the contrasting roles of Germany and Japan have been important and their differences deserve close examination. With respect to international circumstance, the East Asian situation is different from that of Europe in the 1950s in the sense that the socialist bloc as a single visible enemy disappeared. So, there is no urgent incentive to accelerate integration in the face of the outside threat. Furthermore, the US has no vital interest in supporting East Asian regional integration, unlike in Europe of 1948 in which the US provided the Marshall Plan as a public good to speed up the integration process. The US rather focuses on playing a balancing role to check China through supporting Japan’s initiative of ASEAN+6. However, one positive development for East Asian integration is that regional cleavages based on ideology, which had been maintained in the form of conflict between the south and north triangular blocs, are now decreasing. The comparison so far demonstrates a small possibility of East Asian integration. It confirms either fundamental skepticism or procedural divergence. Europe and East Asia have their own uniqueness, so generalizing Europe as a case to be applied to the East Asian situation is not very promising. One should search for difference rather than similarity, and then examine those differences closely to adjust them to the East Asian situation. A functional approach gives priority to interest over identity (Jo 2004; Lawson 2005; Levine 2007). It will mostly produce not citizens of a political community, but consumers of economic benefit. Europe found success following such an approach. However, unconditional imitation does not guarantee success. Furthermore, integration is not always an inherent good. If there were no sufficient consensus about integration—for what, by whom, and by what method—discourse on an East Asian community will simply deteriorate into integration for the sake of integration. Such a blind community easily collapses when circumstances change. In other words, interests should be balanced with identity, in which people’s context of life is located. Otherwise, East Asia will face the problem of today’s

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Europe. In the process of European integration, a state apparatus was first established by an external agency or through elite planning, and then a constitution was made, and lastly the citizen comes to solve the problem of democratic legitimacy. A reverse process like this is called the statist shortcut. This method is effective for building up a community in a short period of time, but the statist shortcut that Europe adopted in the 1950s left a negative legacy in which the EU must invent European citizens who voluntarily participate in the self government of a regional community. In this context, what East Asia eventually needs is not consumers, but citizens; not integration for the sake of integration, but integration based on consensus of goal and method. That’s why East Asia needs adequate discussion about the right route toward regional integration. References Adenauer, K. (1963), Memoirs 1945–1953 (Chicago: Henry Regnery Company). Ahn, J.G. (2005), “Theory for the East Asian Peace”, in Y.S. Baek (ed.), Recognition of East Asia by East Asian People (Seoul: Munhak and Jisung). Akaha, T. (1998), “Asia-Pacific Regionalism and Northeast Asia Subregionalism”, Global Economic Review, 27(4). —— (2007), “Non-traditional Security Cooperation for Regionalism in Northeast Asia”, in K. Mori and K. Hirano (eds), A New East Asia: Toward a Regional Community (Singapore: National University of Singapore Press). Baek, Y.S. et al. (2002), Return of East Asia (Seoul: Changjak and Bipyong). —— (2005), Regional Order in East Asia (Seoul: Changjak and Bipyong). Choi, W.S. et al. (2000), East Asia as an Invention (Seoul: Munhak and Jisung). Choi, Y.J. (2004), “Regional Integration in East Asia: Theory, Current Situation, and Prospect”, in Solidarity of Intellectuals in Northeast Asia (ed.), Toward Northeast Asian Community (Seoul: Donga Daily Newspaper). Cini, M. (2003), European Union Politics (Oxford: Oxford University Press). De Gaulle, C. (1971), Memoirs of Hope: Renewal and Endeavor (New York: Simon & Schuster). Dieter, H. (2003), “Exploring Alternative Theories of Economic Regionalism: From Trade to Finance in Asian Cooperation?”, Review of International Political Economy, 10(3). Dinan, D. (2004), Europe Recast (Boulder, CO: Lynne Rienner). EC (1990), Europe – A Fresh Start: The Schuman Declaration, 1950–90 (Brussels: Office for Official Publication of EC). Fukuzawa, Y. (2006), Memoir (Seoul: Isan). Haas, E. (1958), The Uniting Europe (Stanford, CA: Stanford University Press). Ham, J.B. (2000), Confucian Capitalism and Democracy (Seoul: Tradition and Modernity). Han, Y. (2006), “Peace Regime in East Asia”, in J.I. Moon and M.S. Kim (eds), War and Peace in East Asia (Seoul: Yonsei University Press).

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Hiroshi, N. (ed.) (2007), Yoshida Shigeru: Last Meiji Man (Boulder, CO: Lowman and Littlefield). Holland, M., Ryan, P., Nowak, A., and Chaban, N. (eds) (2007), The EU through the Eyes of Asia (Singapore: WWZ). Itoh, M. (2005), “Economic Integration in East Asia: A Japanese Viewpoint”, in W.S. Moon and B. Andreosso-O’Callaghan (eds), Regional Integration: Europe and Asia Compared (Aldershot: Ashgate). James, R. (ed.) (1974), Winston Churchill: His Complete Speeches, 1897–1963 (London: Chelsea House). Jo, S.H. (2004), “Political Theory of East Asianism”, in Solidarity of Intellectuals in Northeast Asia (ed.), Toward Northeast Asian Community (Seoul: Donga Daily Newspaper). Katzenstein, P. (2000), “Regionalism and Asia”, New Political Economy, 5(3). —— and Hemmer, C. (2002), “Why is There No NATO in Asia? Collective Identity, Regionalism, and the Origins of Multilateralism”, International Organization, 56(3). Kim, C.O. (1999), “The Process of European Economic Integration and Its Tasks”, Journal of EU Studies, 4(1). Kim, J.K. and Ruffini, P.B. (2007), Corporate Strategies in the Age of Regional Integration (Cheltenham: Edward Elgar). Kim, M.S. and Lee, D.Y. (2005), “The Ideal and Reality of Northeast Asian Community: Searching for Cultural Alternatives”, Korea and World Affairs, 21(2). Kim, N.K. (ed.) (2009), Globalization and Regional Integration in Europe and Asia (Aldershot: Ashgate). Kim, S.H. and Schmitter, P. (2005), “The Experience of European Integration and Potential for Northeast Asian Integration”, Asian Perspective, 29(2). Kim, Y.B. and Koo, K.W. (2000), “Regional International Economic Organization: Its Formation and Institutional Form in East Asia”, Korea and World Politics, 16(2). Koo, C.K. (2002), “Developments and Changes in the European Regional Cooperation and its Political Implications for East Asia”, Journal of Korean Diplomacy, 24(2). Koyas, N. (2003), Asianism, Pan-Asianism, and East Asia (Seoul: Yoksabipeongsa). Kwon, Y. (2006), “East Asian Summit: The Present and Prospect”, Foreign Economic Policy. Lawson, S. (2005), “Culture, Value, and Regional Integration in Asia: Critical Reflections on the Politics of Regional Identity”, in W.S. Moon and B. Andreosso-O’Callaghan (eds), Regional Integration: Europe and Asia Compared (Aldershot: Ashgate). Lee, S.C. et al. (2005), East Asian Community: Vision and Prospect (Seoul: Hanyang University Press). Lee, S.H. (2006), Northeast Asian Cooperation Initiative (Seoul: PCNACI).

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Levine, S. (2007), “Asian Values and the Asia Pacific Community: Shared Interests and Common Concerns”, Politics and Policy, 35(1). Lipgens, W. (ed.), (1985), Documents on the History of European Integration, vol. 1 (Berlin: Walter de Gruyter). Mansfield, E. and Milner, M. (1997), “The Political Economy of Regionalism: An Overview”, in E. Mansfield and M. Milner (eds), The Political Economy of Regionalism (New York: Columbia University Press). Maruyama, M. (2007), Reading Outline of Civilization (Seoul: Munhak Dongne). Min, M.H. (2005), “A Study on the Educational and Cultural Policies of the European Union in the 1990s: With Special Reference to Policy Implications for the East Asian Community”, Discourse 201, 8(2). Monnet, J. (1962), “A Ferment of Change”, Journal of Common Market Studies, 1(1). Moon, W.S. (2009), “Price Convergence in East Asia and Implication for Regional Integration”, in N.K. Kim (ed.), Globalization and Regional Integration in Europe and Asia (Aldershot: Ashgate). —— and Andreosso-O’Callaghan, B. (eds) (2005), Regional Integration: Europe and Asia Compared (Aldershot: Ashgate). Moon, W.S et al. (2005), “Monetary Cooperation in East Asia”, in W.S. Moon and B. Andreosso-O’Callaghan (eds), Regional Integration: Europe and Asia Compared (Aldershot: Ashgate). Moravcsik, A. (1998), The Choice for Europe (London: University College London Press). Murray, P. (2005), “Should Asia Emulate Europe?”, in W.S. Moon and B. Andreosso-O’Callaghan (eds) , Regional Integration: Europe and Asia Compared (Aldershot: Ashgate). Ogawa, E. and Junko, S. (2007), “Progress toward a Common Currency Basket System in East Asia”, RIETI Discussion Paper Series 06-E-038. Park, K.S. (1999), “The Process and Outlook of the East Asian Regionalism in the Light of Economic Cooperation in the EU”, Journal of European Studies, 4(2). Park, K.T. (2006), “Escape from Sino-centrism, Leaving Asia, and Asianism in Modern Japan”, Today’s East Asian Philosophy, 15(1). Pempel, T.J. (2007), “Northeast Asian Economic Integration: A Region in Flux”, Asia Pacific Review, 14(2). Pocock, J.G.A. (1997), “What Do We Mean By Europe?”, The Wilson Quarterly, 21(1). Rovan, J. (1992), Identités Nationales et Conscience Européenne (Asnières: Institut d’allemand d’Asnières). Sun, Y.S. (2005), “Pan-Asianism”, in Baek Youngseo (ed.), Recognition of East Asia by East Asian People (Seoul: Munhak and Jisung). Tarui, T. (1963), A Theory of Great East Asian Annexation (Tokyo: Daedongsook Press). Wada, H. (2003), Northeast Asia’s Shared House (Seoul: Ilzogak).

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Webber, D. and Fort, B. (eds) (2006), Regional Integration in Europe and East Asia: Convergence or Divergence? (London: Routledge). Welfens, P. et al. (2007), Integration in Asia and Europe: Historical Dynamics, Political Issues, and Economic Perspectives (New York: Springer). Yoo, S.C. (2003), The Issues of Social Capital Theory (Seoul: Green). Yu, H.S. (2003), “Explaining the Emergence of New East Asian Regionalism: Beyond Power and Interest Based Approach”, Asian Perspective, 27(1).

Chapter 6

Regional Integration and Income Disparities: The Lessons of Europe for East Asia1 Woosik Moon

Introduction Regional integration is a process through which political and economic interests should be combined with regional identities, because, without collective identities, countries are not tied to each other. Regional identity, however, is based on regional solidarity, as the maintenance of a nation as a permanent entity requires national solidarity. This solidarity implies that through harmonious and balanced development, there must be an equality of living standards across people and the region. This is why income disparities across nations or regions should be addressed with regard to the question of regional integration. Regarding the future of regional cooperation in East Asia, a pessimistic view has prevailed so far (for example, Eichengreen 2001). It is true that Asia is not Europe, but this is basically due to the absence of solidarity among the countries in the region. Economic partnership presupposes economic solidarity because the latter lessens the possibility of economic or political conflict. All this suggests that it is imperative for East Asia to nurture regional solidarity and thereby strengthen the regional identity. The first step seems to be voluntary efforts to reduce the economic and social disparities, especially per capita income differences, in the region. For regional integration can make the already large differences in terms of per capita income far larger, putting the integration process itself in danger. On the theoretical and empirical levels, there is no proof that economic integration necessarily leads to the convergence of economic performances across member nations. Some studies suggest rather the opposite case is true (for example, Krugman 1993; Hanson 1998). It is then natural that complete solidarity and economic convergence must be the distinct and final goal of economic integration. After reexamining the current status of economic disparities and convergence trends in Europe and East Asia, this chapter focuses on the instruments for forging solidarity among possible member or participation countries and argues for the need to supplement the emerging East Asian trade and monetary integration with the establishment of regional development banks. Indeed, there are three possible 1  Research was initially supported by the Korea Research Fund (KRF-2003-072BS2022).

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ways to forge solidarity: fiscal federalism, regional policy, and development banks. But, given the current situation on regional arrangements in East Asia characterized by the absence of any meaningful institutions on the regional level, it would be difficult for the East Asian region to dispose of the income transfer through the first two instruments. A new development bank, then, will be the only available alternative. Helping to reduce the wide income difference that exists among East Asian countries and providing an economic and social protection system to its poorer member countries, it will support and promote economic integration in East Asia. The chapter is organized as follows. First, in the following section, the status of income disparities and convergence patterns for European and East Asia countries are examined. Following that, the diverse instruments for forging regional solidarity are considered. The final section presents the main conclusions. Economic Disparities in the EU and Asia Income Disparities at the National Level Before we ask about whether European and East Asian countries or regions converge to each other, we first examine the current state of income disparities in Europe and East Asia. Figure 6.1 gives some idea of the extent of the economic disparities measured in terms of per capita GDP in both regions. Given that many countries in East Asia are still developing economies, while countries such as Japan are already completely developed economies, it is clear that the economic disparities turn out to be far smaller in Europe than in East Asia. For instance, if we consider the per capita income of the poorest countries in East Asia as of 2000, the per capita GDP in China amounts to only 16 per cent of the per capita GDP in Japan. Similarly, the per capita GDP in Indonesia and Philippines represent only 16 per cent of the Japanese per capita GDP.2 In contrast, the per capita GDP of Portugal, the poorest country in Europe, represents 71 per cent of the per capita GDP in Germany and 36 per cent of that in Luxembourg. Indeed, except for Luxembourg, the smallest country in Europe, most countries in the current Europe are quite similar in their per capita income levels. In contrast, there are three categories of countries in East Asia: developed high-income countries including Japan, Hong Kong, and Singapore, middle-income countries including Korea and Taiwan, and low-income, developing countries such as China, Indonesia, and other East Asian nations. Their income levels are widely different. Given that there are ten new member states of the EU, which are not developed countries, the addition of these new member states aggravates to a considerable extent the current state of regional equilibrium. In terms of per capita GDP, for example, the newcomers lag behind EU members 2  In fact, the economic disparities are far larger if countries such as new members of ASEAN (Vietnam, Laos, Cambodia, etc.) and North Korea are included.

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more than did Spain, Greece, and Portugal when they joined the EEC. Slovenia, by far the most advanced country among the new members, reaches 70 per cent of EU per capita GDP compared with an average of 45 per cent in the other Central and Eastern European countries. In the more peripheral countries, differences in economic levels are much more pronounced. For instance, Bulgaria and Romania still have per capita GDP levels below 30 per cent of the EU average.

357 1/' /8; ,7$ ,5/ *5& *(5 *%5 )5$ (63 '1. %(/ 











Figure 6.1a  Per capita GDP in Europe as of 2000

Source: Heston, Summers and Aten, Penn World Table Version 6.1.

691 69. 32/ /9$ /78 +81 (67 &=( 











Figure 6.1b  Per capita GDP in accession countries (8 CEE nations) as of 2000 Source: Heston, Summers and Aten, Penn World Table Version 6.1.

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7:1 7+$ 6*3 3+/ 0