Originally Posted by Cordelier

Roman - That's just it, though... under NAFTA the trade barriers between Canada, Mexico, and the US are already supposed to be down - and yet, as I've pointed out with Softwood Lumber, it doesn't seem to work that way when US industries get out-hussled... instead of making themselves more economically competitive, the tendency is to go crying to Washington. If the US isn't abiding by the spirit or letter of NAFTA, why should Canada and the Mexico expect things to be any different under an even closer arrangement?

Not only that, but with the kind of economic union you're talking about, we'd have to unify our countries under a single currency overseen by a common central bank. Such a North American Central Bank would set interest rates for the entire continent... but as we're witnessing with the European Central Bank (ECB), that's a very delicate balance to strike - different countries are at different points within the economic cycle at different times. If Germany and France are booming, they may need higher interest rates to keep their economies from becoming inflationary... however, if Belgium and Greece's economies are slumping, those higher interest rates will drive them even deeper down. Who do you think is going to have more pull in that debate within the ECB? It'd be the same with North America - Canada and Mexico are net exporters while the US is a heavy importer... how do you reconcile that? If you move to strengthen the common currency so that you can buy more imports, you hurt exporters, and vice-versa. Who do you think is going to win that debate? Do you really think the US is going to let itself get out-voted by Canada and Mexico? In effect, wouldn't all Canadians and Mexicans would be doing in such an arrangement is surrendering their economic sovereignty to the US?