The belief that the world has become “flat” obscures the reality that global commerce is intensely regionalized, dominated by three immense economic hubs: Asia, Europe, and North America. As the forces that once drove global dispersion—cheap logistics and financial liberalization—are now overshadowed by automation, demographic shifts, and geopolitical tension, the competitive advantages of proximity are set to deepen.
For the United States, which has historically been the “reluctant regionalist,” this structural shift presents a clear challenge and a compelling opportunity. The path to regaining economic momentum and ensuring shared prosperity requires a fundamental commitment to its neighbors—a strategy focused on more NAFTAs and fewer America Firsts.
The Cautionary Tale: The Cost of Isolation
The story of industrial decline in places like Akron, Ohio—the former “Rubber Capital of the World”—serves as a crucial cautionary tale. Akron’s fate, where four of the five major tire companies were sold off to foreign rivals during the 1980s, reflected “less the vagaries of globalization than the costly consequences of the United States’ limited regionalization.”
By the late 1970s, as U.S. tire companies struggled against competition, their rivals were already integrated: Japanese tire and car production spanned East Asia, and French and German makers were fully engaged with Europe’s Economic Community. With NAFTA negotiations still a decade away, Akron’s companies “had no partners to turn to in the face of burgeoning Asian and European manufacturing supply chains.”
This lesson is critical: isolation breeds stagnation. Recent protectionist attempts, such as tariffs on steel, have demonstrated the cost, requiring U.S. consumers to pay $900,000 for every job created.
Leveraging Inherent U.S. Strengths
Despite its historical reluctance to fully embrace regional ties, the United States possesses immense inherent advantages that align well with the future of regionalized commerce:
Stable Ground Rules: The U.S. offers stable legal rules where physical and intellectual property rights are generally assured, and courts are seen as generally free from political meddling.
Technological Dominance: The U.S. holds an edge in advanced technologies, including cloud computing, artificial intelligence (AI), and 3D printing. U.S. companies have already accumulated $4.5 trillion in foreign direct investment (FDI).
Demographic Health: Unlike many nations in Europe and Asia, which face shrinking workforces, the U.S. benefits from a relatively growing working-age population and significant immigration.
Educational Power: The U.S. has world-class universities that are the “lifeblood of U.S. science, medicine, and engineering.”
The Path to Prosperity: Deepening Regional Ties
The success of the deeply integrated European bloc and the massive, business-driven Asian hub confirms that nations prosper when they actively engage with their geographic neighbors. For the U.S., the path forward is to build its own strong regional hub.
1. Harnessing Continental Scale
The U.S. economy, while the world’s largest, is still relatively inward-looking, with only about a tenth of its economy catering to people beyond its borders. However, the U.S. has neighbors with vast international reach that it can leverage.
Mexico’s Global Reach: Mexico has a vast network of free-trade agreements with 46 nations, including the European Union and Japan. This means U.S.-based operations supplying Mexican or Canadian exporters can grow far beyond North America.
Export-Led Growth: Exporting more helps American workers, as jobs in export-focused industries pay more than average.
2. Investing in Shared Infrastructure and Talent
Future integration must go beyond tariff reduction, addressing the physical and human capital constraints that still limit North American cohesion.
Eliminating Bottlenecks: Costly bottlenecks routinely add hours, sometimes an entire day, to cross-border journeys for goods. Investment in shared border infrastructure (roads, rails, ports) is essential.
Aligning Professional Standards: North America needs to align university credits and professional licensing (for engineers, doctors, and teachers) to facilitate the movement of highly skilled labor.
Embracing Migration: International scholars and millions of migrants contribute desirable skills and dynamism to the economy. Workers should be able to follow jobs across borders.
3. Setting the Rules of the Road
The competition for future economic dominance is now centered on setting the technical standards that govern emerging industries like 5G, AI, and cloud computing.
The Power of Standards: Standards define which companies own patents, how products must be certified, and who reaps licensing fees and royalties.
The China Challenge: China is actively seeking to shape global rules in favor of its domestic companies. If North American companies are absent from these standard-setting tables, they will face increased costs.
4. Domestic Reform and a Real Safety Net
Regional integration is necessary but not sufficient; the U.S. also requires significant domestic reform to ensure the benefits of trade are shared widely.
Safety Net and Worker Voice: The U.S. needs a real safety net and comprehensive health-care coverage. It must enhance workers’ voices in trade discussions.
Education for the Future: Tomorrow’s workforce needs advanced technical skills (machinists, electricians) and expanded STEM offerings. Crucially, as machines take over calculations and coding, the most valued workers will be those skilled in creative thinking, problem-solving, and drawing connections—skills taught by a strong liberal arts education.
Conclusion
The failure of American communities like Akron proved that going it alone against integrated manufacturing blocs is a path to stagnation. To remain a services leader, a manufacturing powerhouse, and a bustling economy, the U.S. must fully embrace the diversity and scale of its geographic neighbors.
By forging a competitive and inclusive future with its partners, the U.S. can ensure that the “Akrons of the United States” can prosper once again. Regionalization is the “Goldilocks middle ground”—the best bet for prosperity in a competitive world.
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