The Coming Three-Bloc World
| DOI | 10.1111/j.2041-9066.2010.00042.x |
| Date | 01 December 2010 |
| Published date | 01 December 2010 |
| Author | Chris Luenen |
| Subject Matter | Feature |
The emergence of a three-bloc world has been proph-
esied before, most notably by Robert A Manning, now
senior adviser to the Atlantic Council. Manning already
warned in 2000 in an article for the Los Angeles Times
that, ‘the world is drifting slowly but steadily toward
three separate economic and currency zones: the dol-
lar, the euro and the yen-renminbi’. Whereas earlier
warnings of the impending disintegration of the world
financial and trading system were somewhat premature
– underestimating the power of the forces keeping the
old order together – given the severity of the changes
sweeping through the international system at present,
this scenario has fast become more than just a mere
possibility.
The Advance of Regionalism
Regional free trade agreements and integration initia-
tives have proliferated since the early 1990s, and many
countries today are part of at least one regional grouping,
if not more. Regionalism has advanced so rapidly in the
past two decades that one wonders whether the era of
globalisation has indeed been principally characterised
by regional rather than global integration. Despite the
fact that many more regional groupings exist today, glo-
bal power is increasingly concentrated in just three re-
gional blocs – Europe (the EU), North America (NAFTA)
and East Asia (ASEAN+3). These regional blocs already
account for roughly 75 per cent of world merchandise
trade and almost 70 per cent of world Gross Domestic
Product (see Table 1).
What has prevented the world economy from frag-
menting along regional lines much earlier has been the
existence of a complex and interconnected mix of vari-
ables – mainly US hegemony (especially the dollar’s role
as the global reserve currency) coupled with western,
especially American, hyper-consumption and an Asian
economic strategy that was outward looking and highly
dependent on global markets. This glue, however, which
has kept the old system together for so long, is now
waning (see Figure 1).
The Coming
Three-Bloc World
The realisation is slowly setting in that once the
global crisis has abated, globalisation, as we have
known it, will not resume and we will not be re-
turning to business as usual. The emotional, political and
economic impacts of the still unfolding crisis are far more
severe than is widely acknowledged. In fact, the entire
post-second world war global economic system is in the
midst of fragmenting along regional lines. And there is
not much that can be done about it.
In the wake of the global financial crisis a new international order is coming to the fore, writes
Chris Luenen. What we are witnessing today are the birth pangs of a world comprised of three
regional monetary and trading blocs.
Press Association Images
US Secretary of State Hillary Clinton at ASEAN Regional Forum in Hanoi, Vietnam
98 Political Insight
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