Trade Blocs: Wave of the Future?
(cross-posted on politicsforum)
I've recently become very interested in the topic of trade blocs, due to the continuing debate over NAFTA, news over the growth of the EU, and the process, currently underway, to merge Mercosur and the Andean Community (which is of interest to me as I recently moved to Argentina).
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Yes, although many go above and beyond just free trade areas.
Free trade is the second step in an economic integration process, which begins with preferential trade agreements (reduced, but not eliminated, tariffs), then moves to free trade (no tariffs between members, each member sets its own tariffs for outsiders), then moves to customs unions (members work out a unified set of tariffs for outsiders), then to single market (common regulations and freedom of movement within the bloc), then a common currency is adopted, then full economic integration (where all elements of economic policy are set by the bloc).
The theory is that political integration will naturally follow economic integration, since the member states are already cooperating on economic policy.
For me, it's not the multinationals that motivate the formation of these trade blocs (yet). The growth of trade blocs seems to occur almost lock-step with the rapid decolonization after WWII, and many of the blocs were expressly established by newly liberated colonies to help each other make the economic transition from colony to independent nation.
The increased cooperation is definitely helpful in protecting against exploitation by foreign powers, and I wouldn't be surprised if it replaces decolonization as the primary motivation. In some ways the transition from decolonization aid to abuse prevention is already underway in cases like South America (with CAN and Mercosur unifying) and Africa (with the legion of regional blocs unifying).
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