Regional Group Leaves Out U.S. and Canada

By: Elisabeth Malkin, The New York Times

Commentary:

There is a simple bottom line to the new regional group, you can not form a bloc and exclude the largest economy in the world. The US has buying power and can trade with any region in the world. This group, despite the challenges that it will have in keeping its own members from feuding, will have a struggle in dealing with the US on big issues. The modern supply chain is sophisticated enough that sourcing can be switched faster, new sourcing partners found quickly, transportation and distribution lines set up and legal / financial arrangements made at a lightening speed. It is very difficult to turn off the largest consumer market in the world and exclude it in any discussions.

Having said that, the US will deal with this new group (if it remains intact) to the most honest of its abilities. But, if there is a major dispute, the members of this new organization will have to keep in mind that the US is not only their key customer for many exports – but also its key provider of aid and support in many cases.

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