A Passage to Asia: What the Future of International Trade Partnerships Can Learn from the Past

Abstract

Trade blocs are considered to be of great importance both in promoting trade and economic development across borders and in boosting nations’ international economic power. However, over the last two decades, the empirical evidence for the impact of trade blocs and international governmental partnerships on free trade and development has been ambiguous at best (Bhagwati, J. N., 2002. Going alone: The case for relaxed reciprocity in freeing trade. MIT Press.; Sally, Trade policy, new century: The WTO, FTAs and Asia rising, Institute of Economic Affairs, 2008). Nevertheless, calls for greater trade collaboration among countries—in particular with and among the Asia–Pacific economies—continue to dominate research and policy agendas. This chapter investigates the debate about trade blocs, as well as several other current problems in international trade research, through the lens of scholars associated with the Austrian school, in particular Ludwig von Mises, Wilhelm Röpke, and Michael Heilperin. Highlighting their relatively neglected perspectives on trade theory and policy allows us to reconsider the role of government in promoting trade and development across borders, especially with regard to the rise of Asia–Pacific trading blocs and the impact of these blocs on the future of international economic cooperation.