GeoFinal Notes-- Regionalism

GeoFinal Notes-- Regionalism - Final Examination Review...

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Final Examination Review Notes P. Regionalism 1. Is the creation of regional organizations like NAFTA a steppingstone to globalization or a roadblock to it? Regionalism and globalism. The last question we are asking today is, what is the relationship between regionalism and globalism? Are the regional blocs steppingstones to world trade or alternative routes? As you can see by the Ravenhill reading, this question is the subject of sharp debate, and with no resolution in sight. According to Robert Zoellick, the former US Trade Representative, regional trade openings are not contrary to global openings, but rather are helpful to it. According to him, the growth of regional blocs in North America and the Pacific persuaded the Europeans to complete the Uruguay Round and create the WTO. US policy is to pursue both roads at once—to go from NAFTA to CAFTA and finally, possibly, to a Free Trade Area of the Americas, and at the same time to pursue the Doha Round. On the other hand, the thrust of the Gordon article is that regional blocs promote more regional blocs—the growth of NAFTA and the deepening of the EU promotes the growth of Asian blocs and vice versa, and that the US doesn’t really want to see the world divided into regional blocs. The US trades in roughly equal shares with the Americas, Europe and East Asia, and we want to have trade flowing freely with all those areas, not to have Europe and Asia building large walls between themselves and the rest of the world. So who is right? There certainly is a steppingstone quality to the regional blocs. Domestic producers are forced to deal on a larger stage, to get used to dealing with foreign competition, to exporting to foreign markets, and in general to stepping up to a bigger stage. In addition to that, as I’ve been saying, the chief problem with advancing free trade is not whether it makes economic sense theoretically but whether the particular political interests in maintaining the status quo can overpower the general and diffuse interest in increasing the world’s efficiency and so its productivity. Regionalism seems to make it harder for particular interests to be politically effective. It’s one thing for a sugar plantation owner to lobby its own senator for special favors, and another thing to lobby NAFTA or the EU. This may be why further free trade in the Americas is encountering such strong resistance. On the other hand, the historical trend shows regionalism and globalism are not friends. As I’ve been discussing, the stalemate at the WTO talks helps produce more regionalism, but the growth of regionalism itself seems to make global trade talks more difficult, as the example of the EU at Doha shows. In short, regionalism has been advancing from a walk to a trot while globalism has been slowing from a walk to a crawl. Moreover, the growth of regional blocs may actually make it harder to reach agreement at the
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GeoFinal Notes-- Regionalism - Final Examination Review...

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