Globalization’s Regional Detour?

Globalization, this piece from 2point6billion reminds us, has regional escape valves when the rules get tougher to negotiate at the global level. I think the attractiveness of regional common markets will also be reinforced as shipping costs rise due to energy scarcity. And even if buying useless bric-a-brac from countries with cheap labor costs halfway across the world continues to make for a cheaper bottom line, eventually rationing in terms of national security priorities will kick in.

Interestingly, while the EU and China-ASEAN free markets seem like win-win situations for all the economies involved, the U.S. attempt to extend NAFTA-CAFTA to South America seems destined to run into long-term opposition, for the same reasons that the Doha Round of the WTO got stalled. The bilateral patchwork solution seems like an inherently less stable alternative.

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