Is an Asian-Pacific trade bloc next?

Abstract

Recently, there has been much discussion of the world dividing into trading blocs. The European Community's 1992 program of completing the integration of the EC common market plus the collapse of communist regimes in Eastern Europe is going to encourage other European countries to join the EC as full or associate members, forming a huge European economic bloc. At the same time, the U.S.- Canada free-trade area is likely to enlarge to include Mexico and possibly other Latin American countries to form an American economic bloc. In this context it is not surprising that commentators have suggested that this will prompt the formation of a Yen-based bloc in the Western Pacific. The purpose of the present article is to argue that this is unlikely to occur and that instead, the on-going process of economic cooperation between the countries of East Asia, Australasia and North America will accelerate, and Western Pacific countries especially will intensify their calls for strengthening the open multilateral trading system for lowering the barriers around "Fortress Europe'' and for abandoning the bilateralist approach to international economic relations that began to be used by the United States during the 80s. In this sense the region is likely to become ever more obviously the antithesis of a free-trade bloc or customs union. Show more