Dispelling the Myth of Globalization: The Case for Regionalization.

• Author: Hung-Gay Fung

In this relatively short book, the world trading system is shown to coalesce into a set of geographic trade zones. In addition to the discussion of the tripolar trading system (Europe, Asia and North America), the development of other trading regions including Eastern Europe and Sub-Saharan Africa is analyzed. An implication of the analysis suggests that an orientation toward world global market may be misleading. Instead, regionalization is considered to be a strong force that still continues to effect standards of living and the balance of economic power throughout the world. The book is timely and very well-written. It provides many historical citings that have led to the recent development of regionalization.

The book has seven chapters. Chapter One illustrates the growth of different geographic trade zones and discusses the economic and debt problems in Latin America. It suggests that the United States should better understand the concept of regionalization and, in turn, the impact of regional problems from the Latin America countries.

Chapters Two and Three highlight the Japanese economic expansion policy that has led to its role as a leader in the Asian region as well as the world. In addition, it argues that Japan has also played a locomotive function in stimulating growth of many Asian countries.

Chapter Four concludes that the United Kingdom may emerge as the most economically powerful country in the European Community because the United Kingdom has substantially improved its financial strength, while Germany will be fully preoccupied with its unification with East Germany. Finally, competition between Japan and Germany is analyzed using the auto industry as an illustration.

These chapters illustrate the development of regionalization, in particular, the emerging tripolar system; one basic issue regarding whether regionalization leads to global trade diversion or creation has not been raised or answered. In fact, given the development of regionalization, the General Agreement on Tariffs and Trade's (GATT) statistics show that global trade has increased. In addition, in Asia and North America, the inter-regional trade exceeds the intra-regional trades. Thus, it can be argued that regionalization paradigm can be misleading because it overlooks the importance of the underlying trend toward greater economic integration at the global level.

Chapter Five focuses on the development of Soviet Union and Eastern Europe into world markets...