Regionalization is used to describe the conglomeration of people, trade, and ideas in a group of countries with similar economies or cultures. It is often used in a trade or economic sense. Through regionalization, people have become connected economically, politically, socially, and culturally. Although regionalization can have a potentially negative impact, it has often resulted in economic growth as a result of rising profits from exporting goods and services to other countries. One of the leading examples in the world today of this phenomenon is the European Union. This economic, cultural, and political bloc of 27 countries is on the cutting edge of integration.
Regionalization has done an incredible amount to increase business productivity and trade and make many people richer. One of the founding economic theorists of globalization is David Ricardo who focused on distributing income among landowners and workers. He also had a lot to say about wages and prices. One of his big contributions was the idea of comparative advantage which involves countries with different advantages trading with one another in free markets so that both maximize their benefits. This underpins much contemporary regionalization and trade theory. What one country can do well, it can often do better with the help of its neighbours. Thus we see the process unfolding in Europe and Southeast Asia. Regionalization is not simply about economics: it is also about the cultural and social shifts that accompany the reduction in tariff and the easing of travel, communication, and trade.