Development of Regional Trading Blocs
by James L. Morrison

[Note: This is a re-formatted manuscript that was originally published in On the Horizon, 1992, 1(2), 9. It is posted here with permission from Jossey Bass Publishers.]

The Asia-Pacific region has the fastest growth rate of any region, and this growth is likely to continue into the next century. Japan emerged as the world' s economic powerhouse during the 1980s and is the economic giant of this region. Japan is expected to show more real economic growth over the next 10 years than the U.S.; its continuing foreign-trade surplus will drive additional global investment during the 1990s. The Japanese economy is adjusting to new pressures, however. Savings are declining. Japan's trade surplus with the U.S. fell in 1989. Chronic labor shortages are affecting the Japanese economy. [What lies ahead: A decade of decision. (1992). Alexandria, Virginia: United Way Strategic Institute, P-39.].

Free-trade agreements can provide solid economic benefits to the U.S. In 1990, two-way trade with Mexico approached $60 billion, up $8 billion over the previous year and double the 1984 total. Free trade negotiations can address the important Mexican barriers that remain, including numerous auto trade restrictions and import licenses on many agricultural goods. A free-trade agreement also can help us to compete globally in the 21st century. The EC is creating a trading bloc with a population of 325 million and an economy of almost $5 trillion, and Japan is strengthening its trade ties with its Pacific Rim neighbors. The result is greater European and Asian export competitiveness. Free trade with Mexico and Canada can help us face that competition. [Bentsen, L. ( 1991, March 29). Pluses, minuses of free trade with Mexico. The Christian Science Monitor, p. 19.]

If the U.S. teams up with Canada and Mexico in a free- trade agreement, as it is expected to do, this North American bloc could easily dominate the world economy. Together, the three countries have a population of 350 million and a $6 trillion GNP, surpassing the European Community. [What lies ahead: A decade of decision. (1992). Alexandria, Virginia United Way Strategic Institute, p. 40.)]


The North American free-trade agreement will have a significant impact on American society. Corporations, governmental agencies, and colleges and universities will increasingly focus on Canada and Mexico. Executives, workers, students, and professors must work closely with culturally divergent groups to establish plans that are to the mutual benefit of all parties involved. Colleges and universities thus have more incentive to integrate the curriculum with a multicultural/global perspective to prepare students to function more effectively with individuals with different backgrounds. An increasing number of institutions will require a foreign language for graduation. Too, the number of academic exchange programs will sharply increase.

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