You mean that with GDP I would need to rebalance?
what would the implications be of both philosophies? I'm still trying to figure out their real difference, other than the rather subjective "I don't want to be overexposed to country/region X".
If you weight your exposure based on gdp then this is a form of fundamental weighting which seeks to decouple portfolio exposure from the whims of price.
As an example if you weighted your portfolio based on capitalization in 1988 you would have had 50% of your equity in Japanese equites, reflecting what we now recognize to have been a historic price bubble.
If you weighted by GDP you would have had far less than 50% exposure to the Japanese market (and have missed the run up in value that led to the imbalance between GDP/cap weighting in the first place, and the subsequent carnage as the bubble popped.)
Regardless of the measure you select (GDP, exports, cash flows) this will lead to a strategy that underweights expensive countries and overweights cheaper ones. ie you will be implementing a value strategy.
The positives of fundamental weighting
1. It over exposes you to the value factor which should boost long term returns.
2. It decreases your exposure to bubbles.
The negatives.
1. It underexposes you to momentum which increases short term returns.
2. Expense. Such a strategy is active, so you must periodically buy and sell countries in your portfolio (rebalance) to keep your country exposure in line with your fundamental of interest (GDP, cash flows, exports.) this costs money in the form of commissions, bid ask spreads, etc.
3. You must have an accurate and real time way of measuring your fundamental. (Which requires effort.)
There is no right answer of course.