Up to What Level of Economic Integration Can the USA, Mexico and Canada Go within the Framework of the USMCA?
Everything that is born is called to grow, and it is in the normal order of things. But some entities carry within themselves the seeds of limiting their growth, which prevent them from reaching a certain size. This could be the case for the USMCA.
The perfect economical and monetary integration and its requirements
The highest level of economic integration would be that of the Economic and Monetary Union, like the European Union. But achieving such a level of economic integration would require a lot of structural change in each of these countries, changes that will be difficult to accept, including a common currency, common trade policy, common agricultural policy, common migration policy with a single border, the free movement of goods and people between member states, the establishment of North American citizenship with all that it might include.
Obstacles that might be difficult to overcome
Perfect and complete economic integration is, therefore, akin to a certain extent and, in certain situations, to an abandonment of one’s national sovereignty in favor of a supranational institution whose alleged objective is to work for the common good of the Member States. Regarding currency, for example, implementation would involve the three countries abandoning their current monetary units (the US dollar, the Canadian dollar, and the Mexican peso) and adopting a new one created specifically for this purpose. From the point of view of the Canadian and Mexican governments, a major obstacle to the creation of a unified currency is the outright dominance of the United States in such a union. An article from the University of California, Santa Barbara advances the idea that the United States simply has too many Status Quo advantages to move towards a single currency. The US dollar already acts as a global currency, which means that any transition to a ‘new’ currency would risk undermining this position and could lead to a slide towards the euro or yen.
Faced with all these elements that are limiting the migration of the USMCA towards an Economic and Monetary Union, it would be wise not to consider going further than a simple free trade agreement like NAFTA used to be.
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