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Evaluating SADC and NAFTA as regional development models.

Introduction

This paper compares and contrasts two regional formations, the Southern African Development Community (SADC) and the North American Free Trade Area (NAFTA) as development models. SADC is composed entirely of lesser-developed member states, 15 in number, of which the Republic of South Africa constitutes the largest national economy. SADC was founded in 1980, as the Southern African Development Coordination Conference (SADCC), although current membership overlaps with a much older regional formation, the South African Customs Union (SACU). SACU is one of the world's oldest customs unions, formed in 1910, and is rooted in the politics and economics of colonialism. Yet today's SADC is a wholly African institution that dovetails with the political and economic developmental goals of the larger African Union. (1) NAFTA, by contrast, is a much newer and more focused entity. It grew out of a Canadian-United States free trade agreement ratified in 1988 and expanded to include Mexico in 1993. The goals of NAFTA, as with other regionalist efforts before and since, include the pursuit of the developmental gains to be drawn from the advantages of increased trade and the benefits of increased direct investment for participant developing countries (or single country, in the case of Mexico). (2) One question raised is whether, NAFTA for Mexico, and SADC, serve the developing states in the manner that liberalization worked for the People's Republic of China, bringing increased growth promoting foreign direct investment?

NAFTA and SADC are classic examples of "hub and spokes" systems. For each of the "spokes," the trade relationship with the largest economy in the regional group is predominant. South Africa and the U.S. are the primary external markets, while Mexico-Canada flows are of very limited scope, as is also true for the SADC "spokes." This paper explores the comparative effect of these two regional integration efforts. We examine post-integration trade and Foreign Direct Investment patterns as well as the comparative impact on Mexico and the SADC members. Central to the concerns of this paper are the institutional patterns of regionalism and how these patterns function as "development strategy and ideology" as defined in the next section of this paper. (3)

Regionalism and Development

NAFTA and SADC are examples of preferential trading arrangements based within specific geographic regions. The literature on preferential trading arrangements indicates that while such arrangements "liberalize" exchange between the parties in the arrangements, they may also function as "protectionist" for parties outside the arrangement. The classic example of European integration illustrates the point; exchange becomes open within the European bloc but not for Botswana beef exporters, which might even encounter new barriers as the EU moves toward regulatory integration. (4) It is beyond the scope of this paper to weigh in on the larger debates about free trade, as its focus is on development policy. The salient fact is that regional arrangements of both SADC and NAFTA provide liberalized access to neighboring markets for participating countries. These two regional arrangements are (or are part of) the development strategy of Mexico and the SADC countries neighboring South Africa. (5) While the regional levels of development in North America and Southern Africa are widely disparate, SADC and NAFTA are comparable in that liberalized access to larger neighboring markets is the key structural advantage and appeal for the lesser developed participants in each grouping.

As utilized here, the term "development strategy" denotes a policy method or approach intended to promote or at least encourage development. Development may be indicated by economic growth, although it should not be reduced to the simple measure of GDP growth, as "development" is a more broadly encompassing term, referring to advances in technology, human capital as well as broader social and political factors. One could say that economic growth is a necessary but not sufficient factor for development. In this study, trade and foreign direct investment (FDI) are treated as indicators of whether or not such regional strategies are indeed promoting development. The approach and understanding of "development strategy" taken here follows that of the studies found in The New Regional Politics of Development which discusses development strategies in eight different global regions. (6) In her discussion of the Americas, Nicola Phillips describes the historical shift from import-substituting industrialization (ISI) to "neoliberalism" which encompasses "liberalization strategies" of tariff and trade barrier reduction as well as encouragement of foreign investment. (7) In this account, Mexico exemplifies such a shift and that the initiative for NAFTA was significant coming from the Mexican government rather than an example of regional leadership by the United States' government. (8) In the case of SADC, the regional arrangement again has been described as a development strategy, but in this case the members are all pursuing development. As such SADC represents a case of "development cooperation" in which liberalized trade is the mode of cooperation and strategic goals include thereby making the region more attractive to foreign investment. (9)

As a development strategy and policy, regionalism may also be described as ideology in Geertz's two fold sense of the term; justification and compensation. (10) To the extent that trade liberalization is understood or even presumed to enhance and promote the welfare and "wealth of nations" in general, then the removal of trade barriers at a regional level may be justified in neoliberal terms; more trade means more jobs, more national income, and thereby development is supported by the regional strategy. Or and especially if the justification remains empirically indeterminate, then ideology becomes compensation for the lack of certainty. As noted above, regionalist arrangements like NAFTA and SADC might actually work in a protectionist manner when looked at in a broader global scale, yet advocates for such arrangements may continue to emphasize the greater openness and presumed benefits within and for the region, in effect compensating for any disjuncture between fact and ideology by relying upon the understood or presumed benefits of liberalized trade.

Further on, this paper ventures into the empirical analysis of SADC and NAFTA, noting that available evidence indicates that both regional arrangements appear to reinforce existing historical trade patterns and economic relationships. As such, it seems that these development strategies are less innovative than they might be seen or presented to be. Whether they are quantifiably effective is a determination best made by economists, here a political scientist and historian evaluate SADC and NAFTA in their historical context and with an eye toward available policy options for developmental states. Regardless of whether or not SADC and NAFTA effectively promote development, or even constitute trade liberalization, it remains the case that they are cases of regional neighboring states, with prior histories of close economic relationships (and more difficult political and diplomatic relationships), which have adopted policies that would be expected to further their economic ties, that is to say bring about increased economic, as well perhaps as political integration within the region. Therefore, we turn next to the different forms that regional integration has taken in various contexts.

Regional integration takes different forms, including but not limited to:

a. Customs Union

b. Free Trade Area (FTA)

c. Monetary Union

d. Political Integration

These four modes of regional integration form a typology moving from harmonized trade policy to open trade within the region and then to deeper levels of cooperation, such as a single currency and culminating in national confederation." This deepening process, when and where it occurs, may also be termed "vertical integration." Regionalism may also broaden to include a larger membership, constituting "horizontal integration." This typology, however, should not be taken to indicate a necessary evolutionary path of regional integration in so far as there is no predetermined or necessary path from customs union to FTA to monetary union. Neither of our two cases (SADC, NAFTA) concern states that are seriously discussing monetary union let alone political integration at the present time. Nonetheless, two points should be noted with regards to the paths of regional integration; first, that regional institutions once established may exhibit tendencies to expand and developed in either horizontal or vertical dimensions, which is arguably true for both of our cases as discussed below. Second, the literature on regional integration, which is certainly most influenced by the model of the EEC to EU path, suggests that "spillover" effects from the implementation of an FTA or customs union will tend to create an impetus towards further integration. (12) Given the advanced character of European integration as an existing model, it may be considered as approximating an "ideal type" for analytical purposes. This is not to say that other cases of regional integration, such as NAFTA and SADC will inevitably follow the European path, especially with respect to forms c and d (as listed above), but simply that reference to Europe provides an indication of what deeper integration, not to mention its attendant problems, could look like. Indeed, as relatively less developed countries such as Bulgaria and Romania have joined the European Union, the EU has taken on something of the characteristic pattern of a more deeply integrated core or hub and less fully integrated hub and spokes in Southeastern Europe.

Functionalist analyses of integration describe how the " spill over" effects of economic integration set the stage for further integration. However, the integration process may also encourage political and ideological resistance at the state level. In other words, regional integration projects are "responses by government to their domestic political situations." (13) This is so in their formation as well as in their further development. For example, such frictions emerged in the evolution of the EU and help explain the frequent stops and stalls from the establishment of the European Coal and Steel Community (ECSC) in 1951 up through the implementation of the single currency, an aspect of economic integration that clearly required decisive political support. Similarly, at the global level the General Agreement on Trade and Tariffs (GATT) process was designed to lower and remove trade barriers under the auspices an International Trade Organization (ITO) that was never in fact established. At times the GATT rounds seem more of a holding pattern for the multilateral delay of trade liberalization than a framework of global integration. With the eclipse of the GATT by the World Trade Organization WTO however, a transnational institution has been established to provide a political means to the development of more integrated global markets. This paper does not challenge this classic functionalist claim about spill over effects except to note that economic difficulties, political crises, not to mention nationalist ideologies all create counter factors that may hinder or even reverse a process of regional integration.

Ohmae argues that regional economies have already effectively supplanted the nation-state's role in global trade and production. (14) He bases this claim on the imperatives associated with the larger pattern of globalization within which Less Developed Counties (LDCs) have no alternative but to accommodate to the interests of foreign investors, world markets, advanced industrial trading partners, neo-liberal policies of the global regime (i.e. World Bank), in short to the logic of global capitalism. By contrast, some radical analysts continue to counsel autarkic or at least semi-autarkic development strategies, including import substitution and avoidance of dependence on foreign investment. (15) Historically, a case might be made for non-regionalist approaches to development in countries that enjoyed unique advantages of size and natural resources (ex. U.S.A., Russia) or geography. However, such conditions would not apply to any of the SADC countries and few of the lesser- developed countries. Mexico arguably could follow an approach similar to Chavez's Venezuela, possibly with even more success, given its larger internal market, although even in this unlikely scenario, the state would remain dependent on oil exports as the price of its autonomy.

Export-oriented development, that is to say, trade-driven growth, has been a relatively successful model for Newly Industrializing Countries (NICs), yet it should also be noted that a number of NICs (or former NICs as in the example of South Korea) have adopted neoliberal approaches in more recent years. The East Asian and South American NICs have participated in regional development through the Association of Southeast Asian Nations ASEAN and Mercosur, for example, yet the role that these formations play in the development process remains under researched, especially with respect to alternative modes of national development such as traditional bilateral trade agreements that may or may not rely on geographic proximities. Similarly, in the authors' judgment, the literature pays insufficient attention to the effect of regional integration on capital formation and accumulation. (16)

From SACU to SADC

As students of globalization point out, historical processes of intensified transnational political and economic interdependence are nothing new. (17) Modern day globalization was set in motion by the expansion of Europe, attaining a climax phase with late nineteenth century-early twentieth century imperialism. (18) By 1913, the share of global production involved in international trade reached a peak that was not attained again until the 1970s, as the intervening decades witnessed world wars, revolution and counterrevolution, and the global Depression, all serving to reverse the earlier trends. (19) One notable survivor of the earlier classic imperialist era was SACU. Formed in 1910, SACU was composed of the Union of South Africa and three British High Commission territories, located within or bordering the Union. It was then known as Bechuanaland, Basutoland, and Swaziland, with the first two renamed after independence, Botswana and Lesotho, respectively. SADCC was designed as a counterweight to SACU and the power of the apartheid state of South Africa when it was founded in 1980, but from the point of view of regional integration, SACU is also a forerunner of SADC and continues to function within the larger SADC, now as a five state customs union, expanded after 1990 to include Namibia. (20)

SACU replicates regionally the pattern of imperial hegemony that typified African politics in the early twentieth century. The common customs were and still are collected by South Africa and then distributed to the members. Thus, from the colonial period and throughout the apartheid era, these front line states primary revenue sources were under the administrative control of the dominant regional state. This helps explain why SACU survived the withdrawal of British rule in the former High Commission Territories as these states had few if any other practicable options outside of the customs revenues to finance themselves at the time of independence. (21)

By contrast to SACU, SADCC was formed in 1980 by nine majority-ruled states in the region, including all three smaller members of SACU. As such, SADCC was formed not only with regional economic development goals, but political and security concerns in mind. Yet to this day, SADC has developed but a little in the way of political or security integration, despite its original context. To the contrary, SADCC was renamed the South African Development Community (SADC) in 1992, indicating a shift in emphasis towards economic development and cooperation. This pattern continues in the post-apartheid period as SADC, expanded to include Namibia, South Africa and four other new members. With 15 members, including the Democratic Republic of Congo (DRC), it now covers much of central as well as southern Africa.

A FTA was established within SADC in 2000, encompassing the five SACU states, which in 2008 was expanded to cover 12 of the 15 SADC states. SADC has also formed agreements with the East African Community (EAC) and the Common Market of Eastern and Southern Africa (COMESA) to expand the FTA. Also, it should be noted that the Organ and Politics, Defence, and Security (OPDS) has renewed old efforts to form a regional security policy. As such, and in terms of the typology of regional integration, SADC incorporates a long established customs union, a new and broadening FTA, and some limited institution building towards political integration in the area of security policy. There is no monetary union within SADC nor is this form of regional integration presently anticipated.

NAFTA

The North American Free Trade Area has a fairly brief history, although antecedent policies indicate that it was not a new departure for the three member states. Its three state members formed NAFTA in 1994. While there is of course a long prior history of bilateral trade between each of the members and the other two (not to mention periods and policies of protection from the others' exports), the institutional antecedent of NAFTA is the Canada-United State Free Trade Agreement of 1988 and before that the Canada-U.S. Auto Agreement of 1965 that had removed tariffs on transportation-related manufactures. For Mexico, NAFTA represented a continuation of trade liberalization policies initiated in the 1980s, including accession to GATT in 1986. (22)

NAFTA is solely an FTA, as none of the other forms of regional integration are included or anticipated. Significant efforts would have to radically expand NAFTA or supersede it through the creation of a Free Trade of the Americas Agreement (FTAA). Although these efforts have fallen short, individual NAFTA members continue to pursue enhanced bilateral trade agreements in the region and beyond. (23) Of course, the interests and goals of each of the three member states are divergent as in any case of regionalism, the focus here is on Mexico which, by the time NAFTA was established was clearly pursuing trade liberalization policies.

There is formal no policy agenda to deepen NAFTA integration at the present time. Nonetheless, the 1993 "side agreements" to form trilateral commissions in the areas of labor and environmental standards does give this regional economic area some embryonic aspects of the legal-political institutions required by a common market. Undoubtedly, the goals of NAFTA have been mainly economic, with each of the three parties appearing to pursue advantages of increased trade and/or investment opportunities within the national markets of their North American neighbors. In order for NAFTA to win the political support needed for adoption the U.S. and Canada, it was necessary to address the real and perceived "spillover" effects of free trade on labor and the environment. In effect, the critics of NAFTA have understood that the establishment of a free trade area has the practical effect of bringing the continent's labor markets into closer relationship and its environmental factors as well, thus creating a spill over need for a regional regulatory framework alongside the integration of regional commodity and capital markets. However, the regulatory framework that was established under NAFTA remains strictly multilateral with no practical prospect for the creation of supranational institutions.

The economic relationships within NAFTA are a classic example of a "hub and spokes" system. For each of the "spokes," the trade relationship with the U.S. is the primary external market, while Mexico-Canada flows are of very limited scope. From the U.S. vantage point, Canada is a major trade partner of long-standing, while Mexico is a market of emerging importance. The political economies of the three members appear as unlikely candidates for deeper integration; the Canadian system is more akin to the advanced welfare states of Northern Europe, while Mexico is a newly industrializing country and as such more vulnerable to shifts in world commodity prices (ex. petroleum) and currency fluctuations. The U.S. is, among developed economies, notably less dependent on foreign trade with a political tradition that favors national policy autonomy and unilateral action. NAFTA established a substantial degree of integration but the challenges to deeper regional integration remain formidable.

Impact of Regionalism on Trade and Investment

This section surveys key data trends in the areas of trade and investment since the implementation of SADC-FTA and NAFTA. The primary concern here is to consider what development trends have emerged in the wake of FTA implementation. Certainly, it should not be claimed that FTA implementation is causal with regards to these trends as implementation of the FTAs occurred within a dynamic global environment in which other significant factors such as business cycles, currency and commodity price fluctuations, and technological changes will have also had their impact. Nonetheless, it should be noted that advocates of regional integration have presented FTAs as levers of development that provide benefits that flow from increased trade volume, such as enhanced growth and stability, including lessening of tensions associated with migration. (24)

Regional integration theory suggests a positive relationship between regionalism and the promotion of trade and foreign direct investment, even at low levels of integration. (25) Already at low levels of integration, transaction costs of trade are reduced and scale economies are introduced into a region. Direct investment to rationalize production and distribution networks in the integrating region should follow the lowering of tariff and non-tariff barriers and the increase in economies of scale. (26) Additionally, direct investment may be promoted by low-level integration as investors engage in market seeking, especially if there is an expectation of deeper integration in the future.

At higher levels of regional integration, where a common external tariff is established, it is to be expected that direct investment will be further encouraged by the investors' interest in jumping that outer ring tariff barriers to an integrated region. In a highly developed and highly integrated region, foreign direct investors will increase activity due to the optimal value of the location. (27) Given these theoretical considerations, we should anticipate increased trade and FDI in both the SADC, as its integration deepened and widened in the 1990s, and in North America, as integration was attained, during the same period.

In evaluating NAFTA, the focus of this paper is the Mexico-U.S. relationship. As the primary development benefits from the FTA--from the point of view of development should be enhanced Mexican access to U.S. markets and increased inflows of direct investment form the United States. As noted above, NAFTA is a hub with spokes, the Mexico-Canada side of the relationship playing a marginal role for both countries. In turning to SADC, the focus will be trade volume within the regional trade area and inflow of productive investment from outside the area that would presumably be attracted by the larger and freer regional market. South Africa's role as the largest economy in the area should be borne in mind, but the trade pattern of Botswana will also be noted as it has the highest per capita GDP in the region as well as the status of holding a track record of unbroken civilian majority elected government since independence in 1966. (28)

Since NAFTA's implementation, the value of Mexico's exports to the U.S. increased by 447%, however overall exports have grown by 465%. Most interestingly, Mexico registered its biggest increase in export value to a country well outside the region, Israel, by a whopping 1,592% from 1995 till 2008. Of course, regardless of marginal changes the U.S. remains far and away Mexico's largest export market. In 1995, 80% of all Mexican exports were to the United States and by 1999 the U.S. share had reached 87%, falling back to 80% by 2009. Fourteen percent of Mexican exports to the United State in 2008 were in the form of crude oil, with significant shares also for such consumer goods such as televisions, finished automobiles as well as parts, and mobile phone. The increased trade in consumer goods was arguably promoted by NAFTA, although not the oil exports. So far as trade is concerned then, NAFTA did not alter, although perhaps it helped solidified or simply ratified, an existing relationship of trade dependency in an asymmetrical relationship. For the U.S., Mexico remains an important market; the second largest for U.S. exports (12% of the total) and the third biggest source of U.S. imports (11% of the total), with neither share significantly increasing since NAFTA implementation. (29) The question remains however, if, despite the continuity in Mexico-U.S. trade patterns, NAFTA has facilitated increased capital flows for Mexico.

According to the UNCTAD data reported in Tables 1 and 2, the NAFTA region has experienced a nearly 50% increase in FDI over the last decade. Actually this growth is mainly focused in the years 2003 through 2007 with recession associated declines in 2002 and more sharply in 2008, but recovering to the 2007 level by 2010 (Table 1). Mexico's inward FDI has notably increased at a more rapid rate, 133.6% over the same period and its portion of the regional FDI increasing from 4.8% in 2001 to 7.5% in 2010. The United State remains the largest source of FDI flows to Mexico, at a rate of $89 billion in 2009 and $90 billion in 2010. The maquiladora manufacturing region continues to be the biggest sector of U.S. investor interest, although in terms of total outward FDI from the United States, Mexico received only 2.3%. (30)

Turning to SADC, again there is little to indicate a change in trade patterns since the implementation of the FTA. Trade patterns within SADC have not altered nor are there indications of relatively faster growth in trade within the FTA. The SADC region as a whole did double its exports to the rest of the world in the first decade after SADC but this again took traditional forms as the value of precious stones exported from the SADC states more than tripled in that decade. Botswana is the world's largest source of uncut diamonds and its exports of this commodity have underwritten its relatively high per capita GDP. A look at its trade patterns indicates the continuation of existing dependencies. As of 2007, 10% of all Botswana exports went to South Africa and Botswana received 80% of its imports from its larger neighbour to the south. For South Africa, Botswana was its largest export market within SADC, receiving 5% of South Africa's total as of 2007. (31) These numbers indicate continuity in long standing patterns and cannot be ascribed to effects of SADC-FTA. Indeed, the long standing SACU relationship remains as well, while Botswana now receives the largest share of public revenue from diamond concessions, remittances from the SACU pool continued to provide 20% of the state's revenues as recently as 2006. (32) Again, as with Mexico, we need to look at direct investment flows and economic growth before drawing any further conclusion concerning regional integration as development policy.

As indicated by Table 3, SADC has experienced robust increases in FDI over the course of the last decade. The table shows a short sharp drop in 2008 as might be expected due to the global financial crisis, but an even stronger and sharp recovery. The overall growth notwithstanding, two caveats must be noted. First, that South Africa was and remains the primary object of investors' interest, receiving in increasing lion's share across the span of the decade; 55% of total SADC FDI in 2001 and 66.5% in 2010. The second caveat is that FDI into the SADC region remains concentrated in extractive industries, so that the post-2008 surge is actually a result of the global financial crisis and the subsequent increase in the price of gold. The second largest recipient of FDI in SADC is oil-rich Angola, which received $10.1 billion U.S. in 2001, increasing to $25.0 by 2010. (33)

Conclusion

The impact of regional trade areas as development strategies should not be overemphasized. It is tempting to look to closer integration between less and more developed countries as a means to develop the former, or to look to a relatively large Lesser Developed economy such as South Africa as force for regional growth. Yet LDCs are arguably best served by diversification both of their export repertoires as well as their export markets. What lesson can be drawn here is that RTAs seem unlikely to provide such a means. For Mexico, NAFTA serves to reinforce existing trade patterns, and some would argue, existing dependency as well. The SADC countries' main policy needs quite arguably include more open export markets outside the region as it seems unlikely that the regional FTA can provide a sufficient internal market to play a major role in regional development. For RTAs to better promote regional development, one critical analyst claims, "close political cooperation at the beginning, not the end, of the project" is necessitated. (34) While it is beyond the scope of this paper to address broader questions of development strategy, it can be concluded that there is the danger that regionalism might encourage the usage of political and economic resources that hypothetically could be better applied in alternative approaches. As one critic of regionalism notes, it is "remarkable" that "regional integration appears to be more a matter of institutional convenience," reinforcing existing patterns rather than innovative policy. (35)

ENDNOTES

(1) Economic Commission for Africa, Assessing Regional Integration in Africa II (Addis Ababa, ET: Economic Commission for Africa/African Union, 2006): 82-3.

(2) Zuleika Arashiro, Negotiating the Free Trade Area of the Americas (New York, NY: Palgrave Macmillan, 2011): 7.

(3) Anne O. Kruger, "Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?" Journal of Economic Perspectives 13 (1999): 105-24.

(4) Jerry Bungu, "Botswana Beef Exports Slump 89% After Exports to Europe Halted," http://www.bloomberg.com/news/2011-04-28/botswana-beef-exports-slump-89-afterexports-to-europe-halted.html. accessed: July 28, 2012.

(5) It follows then that the focus is not on Canada and the United States as they are well developed economies.

(6) Anthony Payne, ed., The New Regional Politics of Development (Basingstoke, UK: Palgrave Macmillan, 2004).

(7) Nicola Phillips, "The Americas," in Payne, 35.

(8) Phillips in Payne, 48.

(9) Graham Harrison, "Sub-Saharan Africa," in Payne, 234 ff.

(10) Clifford Geertz, "Ideology in a Cultural System." in The Interpretation of Cultures (New York, NY: Basic Books, 1973), 201 ff. As our textual allusion to Adam Smith suggests, a theory may also be an ideology, or as Smith's political economy has been described in a notable text on ideology, an example of "theoretical ideologies" in Terry Eagleton, Ideology (London, UK: Verso, 1991), 149.

(11) Joseph S. Nye, Jr., Peace in Parts: Integration and Conflict in Regional Organization (Boston, MA: Little Brown Co., 1971).

(12) Ernst B. Hass, The Uniting of Europe (Palo Alto, CA: Stanford University Press, 1958).

(13) Helen V Milner, "Industries, Governments, and Regional Trade Blocs," in The Political Economy of Regionalism, eds., Edward D. Mansfield and Helen V Milner (New York, NY: Columbia University Press, 1997), 77.

(14) Kenichi Ohmae, The End of the Nation State: The Rise of Regional Economies (New York, NY: Free Press, 1995).

(15) Samir Amin, Capitalism in the Age of Globalization (London, UK: Zed Books, 1997).

(16) Mordechai E. Kreinin and Michael G. Plummer, Economic Integration and Development (Cheltenham, UK: Edward Elgar, 2002), 3.

(17) Manfred Steger, Globalization (Oxford, UK: Oxford University Press, 2009).

(18) Immanuel Wallerstein, The Capitalist World Economy (Cambridge, UK: Cambridge University Press, 1979).

(19) Ronald Cox and Daniel Skidmore-Hess, US. Politics and the Global Economy: Corporate Power, Conservative Shift (Boulder, CO: Lynne Reinner Publishers, 1999).

(20) Paul-Henri Bischoff, "Regionalism and Regional Cooperation in Africa: New Century Challenges and Prospects," in Africa at the Crossroads: Between Regionalism and Globalization, eds., John M. Mbaku and Surest C. Saxena, (Westport, CT: Praeger Publishers, 2004), 129-37.

(21) Botswana, for example, was unaware at independence (1966) of its diamond deposits as a potential revenue source.

(22) Our thanks to an anonymous reviewer for noting these key antecedents to NAFTA.

(23) Daniel Skidmore-Hess, "President Obama and U.S. Trade Policy," Savannah Morning News, April 19, 2011.

(24) Economic Commission for Africa, Accelerating Regional Integration in Africa (Washington, DC: UNECA, 2004).

(25) Anthony Bende-Nabende, Globalisation, FDI, Regional Integration, and Sustainable Development. Theory, Evidence, and Policy (Aldershot, UK: Ashgate Publishing, 2002), 212.

(26) Francesco Duina, The Social Construction of Free Trade (Princeton, NJ: Princeton University Press, 2006), 56.

(27) Ibid., 193.

(28) Cathy Skidmore-Hess, "Botswana: Boipelego and Dependent Development," Journal of Third World Studies, XIX:2 (Fall 2002), 189-204.

(29) "Background Note: Mexico," U.S. State Department website state, gov/r/pa/ei/ bgn73 5 7 49.htm: Gary C. Flufbauer and Jeffrey J. Schott, NAFTA Revisited (Washington, DC: Institute for International Economics, 2005).

(30) "Balance of Payments and International Investment Position," Bureau of Economic Analysis website, bea.gov/international.

(31) Economic Commission for Africa, Assessing Regional Integration in Africa IV (Addis Ababa, ET: UNECA, 2010), 75-142.

(32) Sipho Buthelezi, Regional Integration in Africa, volume 1 (East London, SA: Ikhwezi Africa Publishing, 2006), 162-85.

(33) "UNCTADstat," United Nations Commission on Trade and Development website, unctadstat.unctad.org; Economic Commission for Africa, Assessing Regional Integration in Africa III (Addis Ababa, ET: ECA, 2008).

(34) James H. Mittelman, Contesting Global Order (London, UK: Routledge, 2011), 114.

(35) Teresa Healy, "Regional Integration and Critique: Raising the Possibility of Counter-hegemony," in Racing to Regionalize: Democracy, Capitalism, and Regional Political Economy, eds., Kenneth P. Thomas and Mary Ann Tetreault, (Boulder, CO: Lynne Reinner Publishers, 1999), 194.

DANIEL SKIDMORE-FIESS is a Professor of Political Science & Interim Department Head of Criminal Justice, Social, and Political Science at Armstrong State University. Cathy Skidmore-Hess is an Assistant Professor of History at Georgia Southern University.
Table 1
Foreign Direct Investment, NAFTA by year
(in billions of dollars, U.S.)

2001   2002   2003   2004   2005   2006   2007   2008   2009   2010
2914   2412   2925   3237   3386   3915   4341   3227   3830   4340

(Source: UNCTAD)

Table 2
Foreign Direct Investment, Mexico by
year (in billions of dollars, U.S.)

2001   2002   2003   2004   2005   2006   2007   2008   2009   2010

140    164    181    204    227    247    274    297    280    327

(Source: UNCTAD)

Table 3
Foreign Direct Investment, SADC by
year (in billions of dollars. U.S.)

2001  2002  2003  2004   2005    2006    2007    2008    2009    2010

55.6  60.7  79.2  101.0  112.8   124.2   151.7   113.4   167.4   199.1

(Source: UNCTAD)
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Title Annotation:Southern African Development Community and North American Free Trade Area
Author:Skidmore-Hess, Daniel; Skidmore-Hess, Cathy
Publication:International Social Science Review
Article Type:Report
Date:Mar 22, 2013
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