Trading Blocks do matter, and as the old adage goes, there is power in numbers. So what happens when up and coming emerging and powerful nations create their own trading blocks? That’s good right, of course, it is good for them, and it is good for the world, provided they are created for the right reasons. Now then, let’s discuss such a case study for a moment shall we?
Perhaps you follow international affairs and geo-politics. The global economic market place is alive and well with lots of choices, trading blocks, and options for nations, companies, and industrial capitalists willing to put their money where their mouth is. BRIC is certainly making both headway and headlines in the world media. BRIC is the trading block with Brazil-Russia-India-China.
Not long ago, I was having a rather interesting dialogue with a studier of US-Russian Relations during the post cold war era to get a hold on his unique perspective. I thus, asked Jesse Giraldo about BRIC and their move to de-thrown the US Dollar as the World’s Reserve Currency. He immediately stated; “I’m not an economist so ill leave the financial speculation to someone more qualified but what I can tell you is that China and Russia on a United front is a very precarious Foreign policy situation for the U.S to be in.”
So, knowing his view point to be very valuable I continued my discussion and asked; Do you think that their “united front” can last, or is it merely a front, as in a facade with weak ties, and PR posturing as it serves them on the economic stage; i.e. G20, G8, Davos, or when it pleases them a wedge between the EU and US, and the US and Middle East, or US and ASEAN trade block, or even between the US and ALBA. Every time we stand firm for a human rights issue and curtail trade with an offending nation; Russia or China runs over to make a new friend and promises to replace our trade flow into that nation. It’s somewhat alarming from a human rights standpoint.
Of course, the US has been accused of enough in that regard, whether reality based or not, the World Media can certainly spin a story. Sometimes, it’s not what you do, but how it’s reported, and that too becomes a huge problem. “He who controls the media, controls the minds of the people,” motif. Geraldo then stated;
“If these countries continue to command portions of the market at their current rate I see no obstacles in them forming a very powerful economic bloc. China and Russia can very easily establish a mutual benefit relationship with Brazil and India provided it can offset to a sufficient degree the financial vacuum left by western trade buy brics currency agreements.”
Yes, I hear that, but those are all nations with lots of labor and manufacturing and thus, have producing economies of scale. They are all selling, they need the big buyers, the US consumer and middle class, and US purchaser, the EU. Still, Giraldo puts it into perspective stating;
This also puts the U.S in a difficult position as it would have little reason to object to such an alliance. All these nations maintain decent relations with the U.S and are certainly not considered adversaries of ours, so a partnership among them for seemingly benign reasons would be a completely legitimate affair. The only chance we would have to control the situation should such a scenario occur would be to question the U.S’s exclusion from the alliance and pressure the BRIC to include the U.S in its alliance. At the very least we could then acquire a leadership position within the organization and thus to large degree control over its actions.
Wow, good point, in fact, that’s a good idea, and we don’t need to control, we should foster those connections to some degree because the more they trade with each other the lower our trade deficits here. It also adds competition to the marketplace. The problem I have with BRIC is that it was formed for the most part as a wedge “against” the US. And it often “acts” like it, as if that is its real purpose. Other than that, I have no other concerns with it. Please consider all this.