Globalization and Technological Advancements

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To what extent are trading blocs an effective and realistic response to globalization?  

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Trading blocs respond to certain specific problems raised by globalization. The first problem they address is that globalization does not necessarily involve free markets or balanced trade. A global trade organization such as the WTO has limited ability to solve such problems, and its sheer size can limit its ability to achieve consensus. Trade blocs such as NAFTA can create limited trade agreements that facilitate limited trade in goods and services without requiring global agreement. They can also address the global imbalance of small, poor countries having less leverage in creating trade agreements than large, rich countries. For example, the EU can negotiate from a position of power as a large market in the way that Portugal or Estonia alone could not.

A trade bloc can also create strategic alliances among countries with common diplomatic or military aims. For example, several countries are nervous about the increasing power and militarism of China, especially with respect to control of the South China Sea. The TPP is an effort in many ways to promote globalized trade in a manner that excludes China for now, but might eventually be able to negotiate as a bloc to force China to greater reciprocity in opening up markets to foreign countries, maintaining the yuan at fair market value, and following international law rather than acting at times as a despotic regional hegemon. 

Although trading blocs are not a comprehensive solution to all aspects of globalization, and while addressing economic inequality between countries will do little to alleviate economic inequality within countries, such blocs are an important economic and diplomatic tool, especially when larger organizations end up being ineffectual due to size and competing interests.

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