North American Integration Essay

Political issue: Integration

Different theoretical conceptions have been advanced as to what is integration. One concept embodies the idea that nations will integrate once forms of discrimination (barriers) are removed, as these are seen as obstacles in the path to integration. Forms of discrimination would include trade barriers, barriers to the trade of factors of production (i.e. natural resources, land and capital), high transaction costs associated with varying exchange rates, currency convertibility barriers, differences in monetary and fiscal regimes, and social and political barriers. Integration entails the removal of all forms of discrimination, which do not allow for the linking of economics and what prevent market forces from

Following are various stages in the integration process:

1. Free Trade Area. This involves the complete removal of tariffs and quantitative restrictions between partner (member) countries. However, each member country is free to employ its own level of tariff and quantitative restrictions against non-member countries. Member countries retain the right to use their own trade policy with countries outside the association. The North American Free Trade Area (NAFTA) can be considered a Free Trade Area (Mirus & Rylska).

2. Customs Union. This form of integration exhibits the features of the Free Trade Area, but also includes the establishment of a Common External Tariff (CET). As such, equal tariffs are applied by member countries of the Union against non-member countries (Mirus & Rylska).

3. Common Market. This level of integration possesses all the features of a Custom Union. In addition, restrictions on the movement of the factors of production are abolished. The free movement of factors of production in a Common Market confers several advantages on member countries, especially in terms of production and resource allocations (Mirus &

It can build an economy and strengthen ties between countries forming alliances. However, it can also destroy precious resources and cause negative effects which may be environmental as well as developmental. The Trans-Pacific Partnership (TPP) is a large free-trade deal involving Pacific-rim countries aimed at expanding trade and investment worldwide while promoting economic growth and jobs. This agreement was between twelve countries which include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. The TPP was seen as one of the biggest multinational trade deals in the world. It covered about 40% of the world economy accounting for some 85% of the combined Gross Domestic Product (GDP) of the twelve countries involved in the deal. The United States chose to withdraw from the agreement in January 2017 as President Trump believed it would only lead to the country’s demise (Heath). The remaining countries, however, continued on to sign a modified version of the agreement called the Comprehensive and Progressive Trans-Pacific Partnership in March 2018 (McBride). The decision by the US president raised a number of questions. What would be the possible outcomes had the United States chosen to remain in the agreement? Would they be the same with the North American Free Trade Agreement and World Trade Organization? Has the United