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III

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In Part 3, the new international role of the substate entity is analyzed, together with the development of a new form of paradiplomacy. With a focus on the international role of substate entities, David Criekemans presents the concept of multilevel diplomacy, examining the evolution of substate diplomacy in regions with legislative powers, specifically the character of foreign policy and representation across a number of regions and small states, including Flanders, Wallonia, Scotland, Bavaria, Catalonia, Québec, Luxembourg and Slovenia. There is a visible dilution of boundaries between diplomacy – which is [22] generated by states – and paradiplomacy (the foreign policy of non-central governments), which is generated by regions with legislative powers. Substate diplomacy can be viewed in different waves, the first of which, in the 1980s, was characterized by an increase in the number of non-central actors attracting foreign investment on their own initiative, and the second, in the 1990s, which was marked by the creation of judicially grounded instruments for the diplomatic activities in certain substate entities in Europe. Criekemans purposes a third wave in substate diplomacy, characterized by increasing verticalization in the organizational structure of foreign affairs, the pursuit of geopolitical and functional priorities, and the wish to integrate substate foreign policy into a well-performing whole. Globalization has generated conditions that challenge the hierarchy of state-centred approaches, with the rise of autonomous substate actors, each with their own self-directed interests. Substate diplomacy is thus a burgeoning field of research. Criekemans offers a detailed examination of foreign policy and what it means to regions with legislative powers, the instruments used to pursue it, and how it affects intergovernmental relations in external affairs as well as representation abroad. He concludes by highlighting the ambiguity of substate diplomacy – specifically this third wave of paradiplomacy – and musing about whether it will lead to a multilevel diplomacy of interactions between central and regional policy levels. At the same time, he emphasizes the need to institutionalize these relations and support them through formal and informal ties.

Stéphane Paquin analyzes trade negotiations involving substate entities. Citing the recent trade agreement between Canada and Europe, Paquin makes the case for a multilevel approach to understanding international trade treaties through his Canadian case study. Noting that the end of the Second World War witnessed a rise in international multilateralism and trade agreements coinciding with an increase in federated and decentralized systems, Paquin draws on a multilevel rather than a centralized approach to understand international trade. Stating that foreign policy should not be a monopoly of the central state but should involve regional actors, he argues that the negotiation and implementation of international trade treaties involving Canada exemplifies the emerging need to consider regional levels of government at the international level. Multiple court rulings in the first half of the 20th century served to consolidate federalism in Canada and provide a growing platform for provinces to have their say in the negotiation and implementation of international treaties. These rulings have given rise to increased intergovernmental mechanisms for managing relations between the provincial and federal governments and ensuring that provinces are consulted on international treaties, specifically as they regard their legislative jurisdictions. This has proven necessary, as the federal government alone is responsible for concluding an international treaty, yet cannot enforce its implementation where it falls outside its jurisdiction, that is to say at the provincial level. This has led to discrepancies in the past, in terms of [23] the number of treaties concluded at the federal level and implemented at the provincial level. The sovereignty of regional actors and their increased representation in international negotiations, Paquin argues, makes a multilevel approach necessary for understanding and studying international trade.

Iván Medina and Joaquim M. Molins analyze the role of business associations in the United Kingdom and Spain, more specifically their adaptation to MLG structures. They begin by dispelling Keynesian and neo-corporatist assertions put forward in previous studies, instead focusing on the effects of globalization, the European Union, regional elites and competitiveness on the gradual transformation of economic and political structures, and the resulting implications for the actors and business associations. The increasing importance of territorial politics has contributed to the rise of peripheral economies and regional institutions, elites and cultures, thus forcing business associations to adapt accordingly. The case studies of Spain and the UK highlight the different regional paths business associations can follow in response to changing structures of state territorialism. They show that business associations in Spain revolve around the sector and territory, which together form a complex network of business associations with a focus on defending an open economy and participating in collective bargaining. The UK, for its part, is far less institutionalized than Spain and shows no incidence of collective bargaining and increased competition between interest groups. These case studies present two different models – one where regional governments incorporate business association into their governance, and another where business associations adapt to newly devolved states – to show that these associations strive to achieve institutional representation as a means to meet their political objectives.

Borders and Margins

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