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The European Union - archetypal case of regional integration and foundation for the implementation of Economic and Monetary Union. Indonesia, Malaysia, the Philippines, Singapore and Thailand - founding members of ASEAN. The Euro-Mediterranean Process.

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Constructing a Mediterranean Region in Comparative Perspective



The 1990s witnessed not only a deepening of regional integration agreements, but also their global expansion. The archetypal case of regional integration, the European Union, not only did it achieve a single, integrated common market, but it also laid the foundations for the implementation of Economic and Monetary Union with a system of a centralized and coordinated monetary policy as well as with a common currency that appeared in 2002. A similar, if less ambitious, process of regional integration occurred in the Americas with the creation of the NAFTA and Mercosur agreements as well as in the Asia-Pacific region with the increased integration of the ASEAN regional system and the emergence of the APEC organization. While the initial scholarly focus was on the question of whether all these regional agreements would prove to be, in Jagdish Bhagwati's memorable phrase, building blocks or stumbling blocks in the movement towards increased international free trade, recent empirical evidence suggests otherwise (Bhagwati 1991, 77). Indeed as Mansfield and Milner show the most recent wave of regionalism has been accompanied by high levels of economic interdependence, a willingness by the major economic actors to mediate trade disputes, and a multilateral (that is, the GATT/WTO) framework that assists them in doing so and that helps to organize trade relations (Mansfield and Milner 1999, 601).

Since this drive towards regional integration has been one of open regionalism, what are its political causes and consequences? Scholars of international relations have used a variety of theoretical approaches to explain this phenomenon. Neorealist scholars, steeped in the theoretical tradition of power, security and sovereignty, have argued for the importance of inter-state power disparities and the threat from increased power capabilities in accounting for this rise in regional integration (Grieco 1990). Additionally, neorealists have argued that once regional integration has begun, the relative allocation of costs and benefits has induced countries to participate in regional integration that would otherwise have been perceived as threats to sovereignty and national security (Grieco 1995; 1997). Hence, for neorealist scholars, states participate in regional integration in order to avoid the increased relative losses resulting from changes in the distribution of power.

Neoliberal institutionalists have argued that the recent drive towards regional integration is the result of the positive incentives provided by an increasingly integrated international economy, to both countries and their political leaders, as well as the benefits from accepting coordination along the Pareto frontier (Mattli 1999). In essence, neoliberal institutionalists argue that increased state cooperation in regional integration processes is the result of positive material benefits, both at the state and the individual political actor level. Indeed, their arguments remain strongly intergovernmental and rather instrumental.

Constructivist scholars have argued that cultural and normative factors are the driving force behind the development of international cooperation that is so endemic within regional integration agreements and efforts. Moreover, constructivists have the peaceful implementation of regionalism may depend on the development of mutual trust and shared identities, qualities that are often the result of international transactions, socialization processes, and common institutional developments (Adler and Barnett 1998; Acharya 2001; Checkel 1998; Katzenstein 1996).

This paper will focus on the Euro-Mediterranean Initiative that the European Union initiated in 1995. It will compare the Euro-Med process to the cases of ASEAN regional integration with the aim of generating recommendations for the achievement of security communities, according to the guidelines set in the introductory paper by Adler and Crawford (2002). I will use the history of regional integration efforts in the ASEAN case to illustrate the critical importance of a shared identity as well as the need for the formal institutionalization of supra-national regional structures. In essence, I will argue that without these two aforementioned elements the creation of a security community will remain an increasingly un-attainable goal of the Euro-Med process, especially in the post 9/11 context of international relations.

Before I begin my analysis of these two cases it is important to highlight the similarities that make the ASEAN case comparable, from a methodological point of view, with the Euro-Med process. Both cases of regional integration are comprised of countries with different levels of economic development, thus making attempts towards regional integration particularly difficult in terms of policy coordination and trade harmonization. Additionally, both regions have extensive power disparities within them. In terms of cultural factors, the ASEAN and the Euro-Med countries include within their regions countries with acute cultural differences. In terms of political regimes, the ASEAN and Euro-Med countries include pluralist democracies, weak illiberal democracies and soft authoritarianism regimes. Last, but not least, all three regions are nested within a regional governance structure that includes powerful countries such China in the case of ASEAN and the European Union in the case of the Euro-Med countries. As such, the lessons learned from the regional integration experiences of the ASEAN and Euro-Med countries can indeed travel, both analytically and substantively to the Euro-Med countries.

Having highlighted the similarities in terms of economic conditions, political relations and positions in the international system, this paper proceeds as follows: Section I deals with the ASEAN experience and argues that the absence of a shared identity among the country members, especially on the democracy issue, in combination with the weak development of a formal institutional structure of policy coordination and conflict resolution has created a soft regionalism that has been exacerbated in the aftermath the 1997-98 Asian financial crisis. Section II attempts to recommend a series of policies that would need to be implemented in the Euro-Med process if it is to become a security community, as envisioned within the constructivist argument.

Section I (The ASEAN experience): Limited shared identity and informal policy coordination

ASEAN was created in 1967. Its founding members were Indonesia, Malaysia, the Philippines, Singapore, and Thailand. ASEAN was created with three interrelated objectives: to alleviate intra-ASEAN tensions, to reduce the regional influence of external actors, and to promote the socioeconomic development of its member states as a further hedge against Communist insurgency. The historical analysis of the creation of ASEAN is based on the accounts of Dahl (1982), Leifer (1989), Frost (1990) and Narine (1998). Indeed, in 1975, the reunification of Vietnam under Communist rule accelerated ASEAN's members' commitment in the strengthening of the regional organization. The Bali Conference of 1976 was the first meeting of the ASEAN heads of government. At that meeting, the ASEAN states signed the Treaty of Amity and Cooperation (TAC), a document that articulated ASEAN's understanding of the principles governing state conduct and relations in the region. Essentially, the TAC obliged its signatories to settle disputes peacefully and respect the sovereignty and independence of their neighbors. In an illustrative example of the under-institutionalization of ASEAN, the 1976 Bali Summit the members agreed to resolve disputes in friendly negotiations. Yet, they proposed to create a dispute settlement mechanism centered on the High Council, a supra-national structure that would issue non-binding recommendations. Yet, no such High Council was ever established (Mattli 1999, 170). For many scholars, this commitment to peaceful resolution of disputes in a region that had been characterized by acute border disputes in the 1950s and early 1960s has been the most important aspect of ASEAN's similarity to a security community. Exemplary of this interpretation are the works by Acharya (2001) and San (2000).

This foundational treaty illustrates the three main aspects of the ASEAN regional organization. The commitment to the region's stability, above all else. A commitment that would prove to be the organizational glue for the regional organization's disparate economic development levels as well as for the admission of countries with different types of political regimes, i.e. both democratic and authoritarian. The argument was and has been that economic development cannot occur without regional stability and that regional stability can be increased through increased economic performance, i.e. a perception of a virtuous cycle between these two structural characteristics. Indeed, as San has argued, this self-interested aspect underlining the processes of regional integration has been instrumental in prolonging the regional organization (San 2000). Secondly, a shared ideology against the threat of communism insurgency in the domestic political arena as well as in the regional area. As Acharya has argued for much of the 1970s and 1980s, Singapore and Thailand viewed Vietnam as a major security threat, while Indonesia and Malaysia saw China as the more dangerousthe important factor behind the evolution of ASEAN regionalism, however, was a common sense of vulnerability to the enemy within, particularly the threat of communist insurgency (Acharya 1998, 203). See also Acharya (1991). In a certain way, this level of ideological commitment or of shared identity has not been achieved in the post-Cold War era. Thirdly, an acceptance of national sovereignty above any considerations of the domestic political arrangements and consequently an increased willingness to avoid preventive and interventionist measures in the region. In effect, this insistence on respecting members' sovereignty, enshrined in the concept of non-interference, soon became one of the fundamental aspects of ASEAN member state interactions.

The end of the Vietnam-Cambodia entanglement, with the signing of the 1991 Paris Peace Agreement, and the end of the Cold War in 1989 forced ASEAN members to re-examine their regional integration goals. The 1991 proposal by the Malaysian Prime Minister Mahathir for the creation of an East Asian Economic Grouping, modeled upon principles of enlightened protectionism and underlined by a latent anti-Western ideology (such as the Asian way of development arguments that Mahathir would support in the late 1990s), would include the ASEAN countries along with Japan, South Korea, Hong Kong, Burma, Taiwan, and China. For a history of this proposal see Low (1991). Despite some limited Japanese support, it was rejected by the other member states, after extensive American diplomatic and political pressures. See Petri (1993).

However, ASEAN members continued their process of regional integration by re-focusing on their original aims, especially the promotion of regional security through economic development and the continued commitment to the principle of non-interference. During the 1990s, until the Asian financial crisis of 1997-98, witnessed the increased economic integration of the ASEAN region though increased trade, attempts for economic policy coordination and the initiation of regional trade liberalization. Frankel has shown that the preferential trading arrangements had boosted trade almost fivefold within the region, leading to a very significant amount of trade creation within the region (Frankel 1997, 113). Indeed, Solingen has argued that the ASEAN regional arrangement can be understood as a regional cluster of `internationalist' coalitions that co-operate with one another to advance their grand strategy, encompassing domestic, regional, and international objectives (Solingen 1999, 30). Economic development became the main source of regional identity, replacing the anti-Communist identity of the 1970s and 1980s as the basic shared identity. ASEAN regional integration was increasingly being based upon the Asian economic miracle.

Yet, it should be noted that this increased economic integration was more oriented towards the creation of a common external trade policy than with intra-regional economic liberalization. This increased focus on economic affairs was particularly palpable in the international trade arena where ASEAN achieved a great deal of success in negotiating bilateral deals with the European Union, the U.S. and other regional groupings as negotiating as one entity. Indeed, some analysts have argued that most of the member states continued their commitment to the regional organization because they perceived their international influence would be greater as long as they were ASEAN members than if they were not (Narine 1998). Even the ASEAN Free Trade Area (AFTA), launched in 1992 with the aim of creating an increasingly liberal intra-regional trading zone, was not begun until the late 1990s, accelerated by the events of the Asian financial crisis. On the contrary, protected domestic industries were permitted to continue and flourish under a myriad of sectoral agreements.

This increased emphasis on economic affairs, often without the requirements of painful sectoral adjustment as in the case of the EU and of NAFTA, and the superior economic performance of the ASEAN members vis--vis their non-member neighbors led to ASEAN's increased attractiveness to the regional non-member states. Hence, the increase in membership in the mid-1990s with the addition of Brunei, Vietnam, Burma and Laos and Cambodia in the late 1990s. However, these new members brought with them lower levels of economic development and entrenched authoritarian regimes that stood in sharp contract to the increasing and mobilizing liberalizing tendencies of the newly created middle classes found in the majority of the older ASEAN members. These intra-regional ideological tensions came to an imperfect resolution with the Cambodia admission issue.

Cambodia was scheduled to be admitted along with Burma and Laos in 1997. However, on the eve of thirtieth anniversary of the region's foundation, Hun Sen ousted his co-prime minister Prince Norodom Ranariddh in a bloody coup. Under pressure from Thailand, the Philippines and liberal elements within Singapore, ASEAN abandoned the principle of non-interference for the first time and postponed Cambodia's entry into the group. In an action reminiscent of the European Union's commitment to democratic rule, both in the Southern European enlargement processes of the 1980s and of the planned eastward enlargement of the this decade, ASEAN played a powerful in supporting democratization in a neighboring country. See Eng (1999) for a comprehensive analysis of this event and its consequences within ASEAN. However, its actions were not as forceful as the EU's nor were they unanimous. Indeed, the issue highlighted the emergence of a rift in the Asian Way.

Indeed, this rift among the member states signified the contentious restructuring of the one aspect that has been characterized by many as the pre-eminent feature of a nascent ASEAN security community (Acharya 1998; 2001). This Asian Way has been based upon the need for informal, consensus-oriented decision-making. Indeed, in the absence of consensus on an important issue, member states are encouraged to disagree and go their separate ways without ASEAN taking a specific position on the given issue. This level of decision-making flexibility has been deemed as necessary in creating a regional structure that has not assumed initiatives that are not fully and wholly supported by its members, thus increasing the chances for survival of the regional organization (Antolik 1990).

However, the Cambodian crisis prompted the then Deputy Prime Minister of Malaysia Anwar Ibrahim to argue that ASEAN needed to become more proactive.[because] we [ASEAN countries] need to `intervene' before simmering problems erupt into full-blown crises[since] our [ASEAN countries'] non-involvement in the entire reconstruction of Cambodia actually contributed to the deterioration and final collapse of national reconciliation(Eng 1999, 49). This position was supported by more democratic leaders from the Philippines and Thailand, but was opposed by the leaders of Indonesia, Malaysia and Singapore. Given the absence of any formal institutional mechanism for the resolution of this issue, indecisiveness led to its re-appearance at the 1998 Manila Foreign Ministers' Meeting where the Thai proposals for constructive intervention in the continued authoritarianism of the Burma regime were met by strong opponents, adhering to the principle of non-interference, and thus were watered to the concept of flexible engagement. There have been seven ministerial meetings of ASEAN leaders since its formation in 1967, the second one occurring in 1992. The 1990s have witnessed an increase in the frequency of those meetings, but there are still complaints that these meetings are still largely ceremonial. Acharya has argued that this lack of formal institutional mechanisms and ASEAN's insistence on the concept of non-interference serves as a useful, if not entirely accurate, symbol of its collective uniqueness, and has been a source of considerable satisfaction and pride for ASEAN members in the international stage (Acharya 1998, 212).

However, the 1998 Manila Foreign Ministers' Meeting was coming on the heels of the Asian financial crisis that exploded upon the ASEAN region, starting in the fall of 1997 in Thailand. And it was this crisis that finally illustrated the soft regionalism of ASEAN complete with its weak shared identity and small and ineffective supra-national institutional structure. The Asian financial crisis not only did it weaken economically the ASEAN states, with the majority of the negative effects concentrated upon Thailand and Indonesia, but it also demonstrated ASEAN's inability to fulfill its own economic-based vision for the future of the organization. For an extensive discussion of the economic, political and social effects of the crisis upon the ASEAN countries and on the process of regional integration see Ahmad and Ghoshal (1999). A vision of increasing prosperity, and consequently increased regional stability and rising international influence, that was shattered by the Asian financial crisis.

The Asian financial crisis debilitated national economies through the twin effect of rapidly repatriated portfolio investment as well as with the illustration of corrupt and inefficient over-investment. Although the exit speed of foreign capital could not have been controlled by the ASEAN structures, the inefficient and corrupt pattern of over-investment was a direct result of the region's institutional structures. ASEAN lacked a rudimentary financial surveillance mechanism that tracked capital and investment movements. It was implemented after the 1998 crisis and was created to deal with the monitoring of financial flows within the region, but without a specific mandate of intervention. Additionally, the continued support for self-interested economic policies, under the dogma of a strong economy leads to a strong region, increased the lack of coordination as more and more states attempted to minimize their losses at the expense of their regional neighbors. Indicative of this approach was Malaysia's freezing of trading of Malaysian shares held by Singaporean investors (Ahmad and Ghoshal 1999, 763). Indeed, as Ahmad and Ghoshal (1999) point out, the first ever scheduled meeting of the region's finance ministers was scheduled for the fall of 1997. Thirty years since its inception and the ASEAN leaders still continued to meet on an informal basis and without the institutionalization of other high-level officials' meetings despite the increased complexity of the region's economic arrangements. The absence of regional formal institutional mechanisms for extensive policy coordination, forced even senior officials, such as Goh Chok Tong (Singapore's Prime Minister), to declare in 1999 that ASEAN as a group is being seen as helpless and worse, disunited in our summits in 1997 and 1998, we failed to convince the outside world that ASEAN was tackling the crisis with determination and decisiveness to regain its high [regional] growth (cited in Ahmad and Ghoshal 1999, 759). Rodolfo Severino, the Secretary General of ASEAN, went as far as to state that the frustration and bewilderment over the sudden reversal of fortunes have led many, including some in Southeast Asia itself, to raise questions about ASEAN's effectiveness and utility and about the validity of the very idea of ASEAN (Severino 1998, 90-91 cited in Ahmad and Ghoshal 1999, 759). The shared regional identity, based on the theme of increasing economic development, was being questioned by even those who had championed it in the past.

Yet, the Asian financial crisis did provide some impetus for positive change. Corrupt politicians were forced to resign in Thailand, the Suharto regime collapsed in Indonesia, the Anwar-Mahathir rift widened in Malaysia, with its well-known consequences, and Singapore was forced to rethink its soft authoritarianism. Thailand and the Philippines began the process of rebuilding their economies and gradually changing their domestic political structures. Indeed, increased support for economic liberalization was achieved and the timetable for AFTA (Asian Free Trade Area) was not only accelerated from 2005 to 2003 but it was also broadened including more sectors than before. Additionally, ASEAN has increased its permanent scientific and technical staff employed at the ASEAN General Secretariat and has created regional technical groups increasingly entrusted with the formulation of regional-level policies. This attempt for increased supranational institutionalization has been aided by the APEC institutions that have stressed the need for the creation of supra-national bureaucratic institutions.

However, these positive changes highlight the fact that ASEAN is still a soft regional integration process, comprised of states unwilling to radically change their perceptions of their self-interest on the basis of membership in the security community. Its shared identity has changed from an anti-Communist agenda of self-interested trading partners under authoritarian regimes to one stressing the common importance of economic development of slowly integrating market economies under democratizing regimes to finally one where debate is increasingly emerging on what the content of the Asian Way should be. ASEAN's attempts to bridge cultural and political divides have been stifled by the lack of formal institutional structures, especially needed in the moments of radical change or crisis. The increasingly liberal democracies of the Philippines and of Thailand appear to be having increasingly less in common with the chronic instability of post-1998 Indonesia and Mahathir's sclerotic Malaysia. In a region where confidence-building measures in the security arena were never implemented, in a region where territorial disputes such as the control of the Spratly islands between China and the Philippines have been left without a regional decision because of multiple and competing claims upon them among ASEAN members, in a region where the territorial disintegration of Indonesia, amid significant amounts of ethnic tensions, has been left to UN peacekeepers, it is increasingly hard to speak of tightly-coupled security communities where shared meanings and values have created the expectation of peaceful settlement of security issues. Yet, as the Cambodian admission debate has shown, the region has a significant number of what Solingen might call a domestic internationalist coalition to move towards a more liberal democratic future.

Section II: Lessons for the Euro-Med Process

What can then be learned for the Euro-Med process? A process, which as Adler and Crawford, argue is being created along the lines of a) security on the basis of mutual confidence and partnership, (b) a zone of shared prosperity through economic integration, and (c) the rapprochement between peoples through social and cultural links and the creation of a Mediterranean civil society (Adler and Crawford 2002, 14). I would argue that this process, if it is to attain the status of a Deutschian security community should revolve around three focal points of regional integration: 1) a commitment to liberal, market-based democracies, 2) an increased institutionalization of experts, policy-makers and local political actors, 3) the principles of open multilateralism around a powerful regional leader such as the European Union.

In terms of liberal, market-based democracies, although Acharya has argued that democratic and authoritarian regimes can co-exist in the ASEAN regional integration process, the recent events show that such a process is tenuous at best (Acharya 1998; 2001). Indeed, the more rapid political liberalization of certain ASEAN countries has increased regional calls for more transparency and accountability in policy-making than authoritarian regimes can provide. This issue is particularly important in the Euro-Med process because so many of the countries aspiring for membership in such a regional integration process have exactly these types of regimes. As Solingen has shown, domestic internationalist coalitions, which stand to benefit politically and economically from such a type of shared identity and which have more elective affinities with it, will increase regional cooperation, especially when confronted with weak states governed by statist/nationalist-confessional coalitions (1998). Additionally, liberal market-based democracies are more likely to allow for the types of social communication and social learning that are required for the emergence of a Deutschian-type security community.

The transition to such a shared identity, through the transition to the aforementioned type of a political and economic governing regime, will be aided by the increased regional institutionalization of experts, policy-makers and political actors. As soon as ASEAN established a regional-level environment-related working technical group, it increased regional environmental policy coordination as well as increased planning in terms of the use of natural resources (Wiebe 2000). This increased regional coordination could have been used during Indonesia's rampant fires in the mid-1990s when its actions had significant negative regional environmental consequences. Additionally, increased regional institutionalization of such types of activities, either in the form of formal institutional mechanisms or in the form of permanent supra-national personnel, can increase regional coordination among different types of shared identities.

But these shared identities have to revolve around an open multilateral system, anchored by the European Union. By open, I mean a non-discriminatory one between insiders and outsiders and multilateral in the sense that it has to give accession members consideration when implementing domestic political changes. In particular, the issues of labor migration from the South to the North and the issue of agricultural protection for North farmers have to be resolved in an open and multilateral manner. The political feasibility of these issues may appear to be elusive, but its possible resolution will tie the shared meanings with actual, palpable material resources and increase trust among the two regions. And trust can lead to more cooperation.


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