Explain the relationship between regionalism and globalisation

Nota:

• Regional economic blocs have tended to be formed in part because of the impact of globalisation on the economic independence of states. States have been inclined to work more closely with other states in the same region. e.g. The EU and the Euro (18 states) - stability of prices, price transparency, no transaction costs and no exchange rate fluctuations

Nota:

• Economic blocs help states to resist pressure from intensified global competition. These blocs therefore function as customs unions against the pressures from the wider global economy (e.g. EU has the largest GDP in the world, only state to rival America (16.5 trillion v. 16 trillion)

Nota:

• states seek prosperity through the establishment of free trade areas that give them access to larger markets and facilitate economic specialisation.   E.G. EU has become integrated in global markets, whereby single countries could not and also allows free trade and movement of labour between states to promote maximum prosperity.