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European Union

European Union is an economic and social integration of a European countries totaling to over 30 currently. The main purpose of the integration is political and economical. The community has a population of over 500 million people, which is equivalent to the population of United States of America.   A European union is the largest integration politically and economically. The member states of European Union have allowed free movement of persons, goods services and capital thus creating a single largest market. A European union however is faced with various challenges e.g. china, India, Indonesia and USA.


The European union integration has been an idea that has existed in many years although it was realized in 1993. After the Second World War, various institutions tried to unite a European countries through various fronts. One such a front was a European coal and steel community with its main purpose to control the supply and distribution of coal and steel. The members of this union were west Germany, France, Belgium, Italy and Luxemburg. Later two other institutions came up to unite the European countries before it was created and described as a European community. However the realization of a common European union was realized in 1979 when there was a first election for European parliament. In that period democratic election was carried out which ensured that the holders of the parliament were men of respect in the society. The European union later accepted more membership from Greece, Spain and Portugal.  Thereafter the members agreed that there should be a free movement of people without use of passports among the members. In 1993, European Union members entered into an agreement which established the European Union.  

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There are various reasons why European Union countries decided to come together. One of the main reasons for the integration was economic reasons, political and social issues.  The European Union came together to create a large market for their goods and services other reasons that brought them together include human rights issues, democracy and rule of law. After the European Union came together, they have come up with a common trade policy, competition policy, and agricultural policy and currently they are having a common policy. A European being the second largest to world gross domestic product i.e. 30% of the worlds GDP the need to integrate this into a large block was found to be necessary for the success of Europe.

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Trading block is an international phenomenon with far-reaching consequences in the social, political and economic realms.  Economic integration, namely the spread of neoliberalism and capitalist-inspired consumerism as the dominant engine of economic growth, has both supporters and detractors.  The world is becoming more and more interdependent and whether you think Economic integration is a good or bad thing, it is here to stay. Utilizing a cross-comparative case analysis, this paper will explore two countries which have embraced free trade and look at the economic ramifications of growth in China and Mexico.  China represents a unique blend of authoritarianism and capitalism leading to sustained and pronounced economic growth in one of the largest – and growing - economies in the world.  The case of Mexico, a developing country and member of one of the largest and most important regional trade blocks in the world, will further illuminate the positive aspects of economic globalization. 

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Seeking to explore the globalization phenomenon by looking back over the past twenty-odd years, this essay will analyze the important antecedents to globalization today.  We then turn to globalization as a planet-wide phenomenon and look at globalization in a variety of different contexts.  This will be followed by an analysis of the effects of globalization as we explore the criticisms associated with globalization.   We then conclude with an overview and synopsis of the issues explored with relation to globalization in the developing world today.

Case Study: China

China is an ancient civilization with a long tradition of dynastic rule and strong leaders.  China has been ruled by the Communist Party of China (CCP) since 1949, an avowedly socialist form of government which established the People’s Republic of China, and initially viewed capitalism through a skeptic’s lens.  As a socialist party with communist leanings, successive Chinese governments undertook disastrous social and economic initiatives including Five Year Plans, the failed Great Leap Forward and the violent Cultural Revolution. 

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Despite these early years, China has cautiously embraced economic liberalism and a capitalist economic orientation, albeit with strong authoritarian tendencies.  China today has the 4th largest economy in the world behind the United States, Japan and Germany, estimated at $2,645 billion per year.  With a population of more than 1.3 billion, China remains a largely rural country with 43% of its labor force employed in agriculture with another 25% in industry and 32% in the service sector.  Industry, however, has driven the economic growth of this country which represents 49% of the total $2,645 billion GDP.   Accordingly, the average annual growth in China over a ten year period was an astonishing 10.5% (1996-2006).   Much of this growth is tied to the global economy and China’s role in international economic affairs today (The Economist 2008).

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Accordingly, the current state of world affairs coincided with the emergence of neo-liberalism as a driving political and economic force in the 1980s.  At the forefront of the recent economic overtures were the Asian economic “Tigers”, a group of Asia countries who emerged in the late 1980s and early 1990s, precipitating a global economic shift towards emerging East Asia and its rapidly expanding markets.  Chinese development, while embracing market-oriented economic policies, differs substantially from the other Asian Tigers in that it has chosen to gradually liberalize its economy but has resisted pressures to democratize in the face of an opening in the economic sphere. 

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Based upon the principles of economic liberalism but with a strong role for the state, China began with the creation of attractive economic-oriented trade zones to appeal to foreign investors and stimulate national growth.  Industrialization and export-oriented development were key to China’s development model.  Accordingly, this model of growth is a modern attempt at harnessing the forces of global economic capitalism through state-led development.  This form of development focuses on macro-economic concerns (raising the Gross Domestic Product, decreasing the national unemployment rate, etc.) by attracting foreign investors and utilizing the resources already available to stimulate growth.  While his form of economic development is currently being practiced around the world, it has been particularly successful as a developmental model in the case of China (Lardy 2004). 

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Although in East Asia, Taiwan, South Korea, Japan and Hong Kong remain important economic actors, "the most dynamic and rapidly growing economy of the globe after the fall of Soviet communism was that of Communist China, leading Western business-school lectures and the authors of management manuals, a flourishing genre of literature, to scan the teachings of Confucius for the secrets of entrepreneurial success" (Hobsbawm 1994).  China has benefited tremendously from increased interdependence and has established a strong manufacturing centre, shifting employment away from traditional manufacturing centers in the West.  China remains the major challenge to US economic control as wages continue to remain low in China and Chinese products continue to flood the world’s global marketplace. China has remained competitive, commands one of the world’s largest economies and has established a working and viable example of authoritarian capitalism.  This shifting of global production centers to the East has led hurt traditional manufacturing centers in the West, exemplified by the decay felt by the once-vibrant US automotive hub of Detroit, Michigan.

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Trading blocks has been propelled by capitalism and the internationalization of the capitalist economic system.   The main effect of Trading blocks is the world-wide spread of neoliberalism around the world and the entrenchment of capitalism as the dominant – some would say sole – viable economic system for the world economy.  This essay has traced the antecedents to the current wave of Trading blocks with an emphasis on the Reagan and Thatcherite regimes in America and Britain.  Accordingly, neoliberals was given a huge boost following the collapse of the Berlin Wall and the fall of communism in Eastern Europe in the late 1980s.  Entrenched as the dominant economic ideology across the globe, neoliberalism is the underlying force behind the current wave of globalization.  Despite numerous detractors on all corners of the globe, globalization remains an important force in modern society and a key component of continued and sustained economic growth on a global scale.   China represents an alternative development model than that articulated by the liberal democracies of the West, including France, the United States and Great Britain, who have espoused democratic capitalism as a model for development.  China advocates an alternative developmental model and has grown its economy through strategic economic planning, exported oriented growth in a global economy and a strong current of political authoritarianism.  Economic globalization is based upon the principles of neoliberalism, free trade and unhindered markets.  Mexico, as a new member of NAFTA and a developing country with strong economic growth over the past decade and a half, exemplifies the positive attributes of economic globalization and reinforces the argument that the forces of globalization have been positive.

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