Yes. And it's a such big self confidence that they don't doubt of their own superior model. Gladly we discuss racism a lot but xenophobia sometimes are downplayed today while they're massive force making people to understand foreign countries through incredibly distorted lens. It's basically us (the US, White Anglophone countries) vs them (all those exotic foreigners).
But aside this, we have also "progressive xenophobia", very common on developed countries (by developed, meaning a higher GDP per capita, the "it's all about economy" thing). If you want to explore a scenario where let's say Britain and Australia are locked in a very close association (or Spain and Argentina, or France and Louisiana, or Netherlands and Cape, be creative) that's immediately called ASB just because, whereas in OTL we have incredibly different countries such Spain and Finland sharing the same currency.
I'm not really sure what you mean by "progressive xenophobia", the name makes me think that it is "xenophobia wrapped in progressive rhetoric so that it sounds enlightened and based on scientific evidence rather than just bigotry" , although as you describe it it sounds like it is something different.
But I have seen that normally the case you describe (Spain and Finland using the same currency) is explained by resorting to "everything is economics" or, to use the popular expression here, "money talks, everyone walks." And that can be summarized in that the governments of two or more countries that in principle would have no reason to associate with each other (and many would not do so) will do so...
...simply by sitting down and explaining to them how refusing to do so stands between them and the hypothetical possibility of greater financial gains. That is to say, people will happily give up literally EVERYTHING if you promise them it will make them more than two dollars. Which of course doesn't work like that but people assume that's how it is.
I have also seen such partnerships often explained on the basis that they are not egalitarian, often using the GEACPS as an example: that is, unless it is the European Union or NATO, transnational partnerships are assumed to consist exclusively of a bunch of small countries that are forced to stay in the association only because the strongest nation wields financial and military threats against them (try to leave the association and I will screw up your economy/you will learn what happens when my troops invade your country).
Of course, in this case all the other members of the association hate their "leader" immensely, and stay in solely out of fear, but they are eager to get out of the association and desperate to ally themselves with anyone who promises to free them from Their leader".
Not forgetting, of course, the very common whiplash that I have seen recently in at least two or three TLs.
We have the typical scenario in which the great powers decide to start wars of expansionist and imperialist aggression, completely by pure choice (that is, they were NOT dragged into the war by the actions of the other side, they started the war because they wanted to).
Which they do by burning ammunition and weapons and soldiers as if they were going to run out of them if they don't use them up within 24 hours.
Of course, anyone who brays nonsense like "this is too expensive" or "we're going to destroy our economy" will at best be shown the door, and shot in the head as a "traitor" at worst. Because of course these wars MUST be fought, NOTHING is more important...
...until suddenly the author decides that he wants to end the war. So he decides that, after having made virtually everyone within the universe eager to fight no matter the cost...
...suddenly the same leaders who were before were "WAR, WAR, WAR! AT ANY COST! LET'S GENOCIDE EVERYONE WHO IS NOT WEARING OUR GLORIOUS UNIFORM! SHOOT EVERYTHING THAT IS NOT WEARING OUR NOBLE FLAG!" Now they are starting to put their hands on their heads and shout that they are destroying their own economy and that the war must be stopped NOW.
I mean, what? You (the author)'ve been showing ABSOLUTE DISREGARD FOR HUMAN LIFE (and the economy) by waging genocidal wars of aggression...
...and you're telling me that all you care about IS THE FUCKING ECONOMY?