Currently the size of the nations is differenct. Very different.
This makes the competitions between teams from different nations to be inbalanced.
Why not grouping few small nations into one union (like the NBA, Euroleague, etc.) and defining them like being a single "nation"?
It will make the game more balance (between teams from different nations at least).
Of course that when a nation will get big enough it can be splitted again into two unions, or even one nation and one union, etc.