Los Angeles Pierce College Discussion 3 – NAFTA &

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Los Angeles Pierce College Discussion 3 – NAFTA &


Discussion 3 – NAFTA & EU

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By now, you should have an idea about the NAFTA and the EU. For this discussion, read chapter 4. Also look up NAFTA and EU online and answer the following questions:

1. NAFTA – Do you think the NAFTA is beneficial or harmful to the US economy? Should President Trump withdraw America from it completely? Why or why not?

2. EU – Do you think it is beneficial or harmful to have a unified Europe? Should UK move ahead with ‘Brexit’? Why or why not? Brexit is the term given to Britain exiting the EU.

Answer the above questions and reply to at least ONE of your classmates’ posts. You must comment on your classmate’s post ONLY based on what he/ she wrote for the above 2 questions.

You can take any side for both questions; I will not judge you. Remember, no negative comments/ remarks irrespective of your classmates’ views. We respect everyone’s views.


  • Question 1 – About 60-80 words, 4 points
  • Question 2 – About 60-80 words, 4 points
  • Comment on a classmate’s post – 2 points

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Chapter 4 Regional Economic and Political Integration Determinants of Economic and Political Integration Sharing a culture, a common language, a common history, or even common borders may lead countries to join forces in an effort to eliminate barriers to trade. 1. A Common Culture – Neighboring countries often share a language, as well as other cultural elements such as traditions, norms, and religion. The commonality of these elements facilitates interaction between neighboring countries and promotes cooperation. Example – Middle East 2. A History of Common Economic and Political Dominance – A history of dominance by one nation in a region can lead to shared cultural elements among the different peoples in that region, as well as to similar economic and political structures. Example – countries of the British Commonwealth and those of the Former Soviet Union. 3. Regional Proximity – Regional proximity ensures effective transportation and communication systems, which increases the likelihood that the economic relationship will form among the countries. Example – NAFTA (US, Canada, Mexico) 4. Economic Considerations – Countries with a similar level of economic development are likely to be successful in establishing and maintaining regional economic integration mechanisms. 5. Political Considerations – Political considerations, such as the threat of losing national identity and sovereignty, can become important obstacles to regional integration. A successful regional integration is one that promises rapid economic development for member countries than they would otherwise experience outside of the group. Levels of Regional Economic and Political Integration and Examples of Successes 1. Bilateral Agreements and Multilateral Forums and Agreements Bilateral and multilateral agreements can be industry-specific and involve some or all products exchanged between countries. These agreements are bilateral if they involve two countries. If they involve multiple countries, they are referred to as multilateral. They are less formal in nature than free trade agreements, and they are not as stable. Some examples include: 1) OPEC (what does OPEC stand for? Clue – the nations sell petroleum) 2) NATO (what does NATO stand for? Clue – the nations are a military allaince) 2. Free Trade Agreements Free Trade Agreements take place between two or more countries and involve a reduction or elimination of customs duties and other trade barriers between member countries. There is NO common external tariffs like a customs union. 1) European Free Trade Association (EFTA): Current member countries are Iceland, Liechtenstein, Norway, and Switzerland. At present EFTA is not an official part of the European Union due to lack on impact on the decision-making process within the EU. 2) Association of Southeast Asian Nations (ASEAN) and the ASEAN Free Trade Area: The most successful example of regional economic integration in Asia, ASEAN has its goal to reduce tariffs and create an environment promoting mutual involvement in the development of the region with a goal of creating a free trade area. 3) North American Free Trade Agreement (NAFTA): Members include United States, Canada, and Mexico. The goal of NAFTA is to eliminate tariffs and nontariff barriers and to offer free access to companies from member countries. (Do read what is happening with the NAFTA currently. Is it gone?) 3. Customs Unions In addition to being a Free trade agreement, the member countries have common external tariffs on products imported from countries outside the customs union and there is free movement of goods & services (not capital or labor). Customs unions usually have in place mechanisms to create a common market. 1) Eurasian customs union EACU – Customs Union of Belarus, Kazakhstan, and Russia 4. Common Markets Agreement allows all of the above and the free movement of goods, services, capital and labor within the common market area. The European Union has developed a viable, long-standing, common market. A number of other economic groups are well on their way to establishing a common market: 1) Southern Cone Common Market (MERCOSUR) 5. Economic and Monetary Unions EMUs require a unified monetary policy for member countries, in addition to free trade. A monetary union involves the creation of a unified central bank and the use of a single currency, or currencies that are in a fixed relationship to each other. Examples are: 1) European Economic and Monetary Union: Created by the 1992 Maastricht Treaty, it has a common monetary policy, an active European Central Bank, and the Euro as the common currency. There are 19 Euro members and 9 non-Euro members. The 19 Euro members of the EMU are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. 6. Political Unions The highest level of regional integration; it assumes a viable economic integration and involves the establishment of common governing bodies, legislative bodies, and enforcement powers. The European Union is an example of successful voluntary political integration. It is composed of 28 member states: Austria, Belgium, Bulgaria, the Czech Republic, Cyprus, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. Macedonia and Turkey are candidate countries.
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Tags: NAFTA Free Trade Agreements Regional Economy Political integration Bilateral Agreements

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