Problems Involved In Developing An Integrated Economic Such As The European Union

Problems Involved In Developing An Integrated Economic Such As The European Union

From my point of view, a comparison between NAFTA and the European Union can only hold if we are strictly referring to trade. According to integration theories, there are several levels of integration. The first one is a free trade agreement, which refers to the fact that two or more countries decide to give up on using tariff barriers between them. As such, goods will be traded between them without custom duties.

The second level is a customs union, which means that the countries forming such a union also agree on a common tariff to be applied to third parties that are not member of the union. ...

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we look at these levels presented here above, NAFTA is still on the first level and is not likely to advance any time sooner. Indeed, there is no political will in this sense and the free trade agreement seems to have been beneficial to all parties involved. On the other hand, the European Union is on its way towards the political union. The institutional structures are already in place and there is a strong political will to carry on the integration. The economic and monetary union seems to be working quite well, after the euro was stabilized at the end of the 90s and after it began to gain momentum on the international financial markets.

As such, we may conclude, for the beginning, that, if Europe is indeed an integrated economy or at least very close to becoming one, North America is only an integrated trade area and only an integrated area of trading goods. Even this is not perfect. According to the NAFTA agreement, signed in 1994, Mexico was not forced to reduce ...

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Added: 9/21/2016 04:05:19 AM
Category: Economics
Type: Premium Paper
Words: 846
Pages: 4

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