HEAD TO NORWAY TO GO GLOBAL

The buzz word these days may be “globalization” but in geo-politics the reality is trade blocs in various shapes or forms. NAFTA, EU and ASEAN are the heavyweights, but there are a host of others. If the first and foremost reason for a country to join a trade bloc is to gain some kind of comparative advantage, be it preferential duties, cheaper labor or access to larger market, etc., then the opposites should apply for those countries who do not join. The very advantages of trade blocs are therefore their greatest detraction since they are, by definition, exclusive to non-members, hence impediments to free and open trade on global basis. The very notion of trade blocs is reminiscent of the old colonial spheres of influence that have carried over to the present time. Despite the many rationales to the contrary, the very existence of trade blocs seems to contradict, in fact repudiate, some of the raison d’être for the WTO (formerly GATT) initiatives that trace back to the first round in 1947. Yet, trade blocs proliferate.

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