Vice Speaker Kolkirk immediately exclaimed in delighted surprise, "If that's the case, there's practically no risk in joining the Trade Alliance." Harcourt nodded. "As long as we handle it properly, we can gain access to the enormous market of the entire Mediterranean Region while keeping foreign goods from flooding in."
Yes, judging by the text of the rules, they could indeed profit by continually "manufacturing" small free trade zones.
Joseph had put forward this seemingly loophole-ridden provision because the experience of that later Economic Community showed that the "hub-and-spoke" model would forever remain a beautiful fantasy, impossible to implement in practice.
The so-called hub-and-spoke model meant that every member state of the Trade Alliance wanted to make itself the "hub," establishing free trade agreements with numerous other member states and turning them into its "spokes."
That way, it could enjoy other countries' markets to its heart's content while erecting barriers against countries with industrial advantages.
Once they actually tried it, however, they would first discover that the political and diplomatic costs were outrageously high-if you proposed forming a free trade zone with several countries, you had to offer political benefits to persuade them. Even if you spared no expense and paid everything they asked, two free trade zones might demand the same concessions from you, at which point your domestic political groups would start fighting among themselves first.
Thus, most of the time, a country would join only one free trade bloc.
Second, a free trade zone could not always bring you benefits and nothing else. Other countries were not fools. If you wanted their markets, they would demand concessions from you as well.
Join a few more free trade blocs, and you would discover that over half your domestic industries were facing a battering.
After all, if the industries