It could very well be but I think everything about it would be circumstantial. I think it would all depend on the language involved but I like the idea of a real economic partnership that could self-sustain intself in the time of crisis.

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?

what is canadas national deficit?how would a union affect this/

I understand your concerns and respect them but as stated earlier it all depends on the circumstances and the language written. The currency problem you speak can be dealt with. The "Amero" could be a stable currency while each countries own currency could be inflated to boost individual economies. There was talk about the U.S. doing this on their own a while back. There was talk they were gonna prodcue redbacks (possibly based on gold) as a stable currency and greenbacks as a domestic currency that could be manipulated for growth. It's possible, look at the UK, they still use their Pound.

Eli - Canada is running trade and budget surpluses - it took us a lot of sacrifice to do so, but we bit the bullet and did it and we take a measure of pride for getting our economic house in order... but like I posted earlier, I don't see how an economic union with the US could improve on our standing.

The plain and simple fact of the matter is that the US is addicted to it's imports... the whole US economy is geared to keeping a steady flow of cheap foreign goods coming in. When was the last time the US actually ran a trade surplus? The Ford Administration??!? This isn't going to change with an economic union with Canada and Mexico and uniting the monetary policy of the three countries under a common authority. If that were to be the case, then that authority would have to decide whether or not to take policy decisions geared to stimulate imports or exports. You've got to decide how you want your economy to perform before you decide what economic policies to put in place.

I have no doubts that an economic union would be beneficial for the US... but from a Canadian perspective, when push comes to shove, we know that the US is too big and powerful - if ever our interests differed from US interests in a North American Union, we know whose interests would prevail. So what would we have to gain from it? With NAFTA, we already sell the US all the exports we can produce... it's not like our exports are going to dramatically increase over and above what they already are. Sure, we might see a marginal increase in exports... but in exchange for that, we'd have to effectively give up our economic sovereignty. Doesn't sound like a good idea to me. How about you? Assuming you're an American, how much of your economic sovereignty would you be willing to submit to Canadian authorities?

Roman - I'm not quite certain how your "Amero" or "redback" scheme would work in practice, though... How can you have separate currencies for international and domestic transactions? If you divide the two sides of the coin, don't you just remove all restraints on monetary discipline?

Say, for instance, you peg 1 Amero = 1 US$ = 1.10 Cdn$. Now let's say that the US tightens interest rates while Canada lowers it's interest rates. As the US economy slows down, it doesn't need as much liquidity anymore, so let's say that the US money supply is reduced by 5% - it's par value would thus increase to 1 Amero = 0.95 US$, wouldn't it? But if the value of the Amero is pegged, wouldn't Americans be getting ripped off?

What about Canada lowering it's interest rates? Well, that'd mean putting more liquidity into the domestic economy, which means that the par value of the Canadian dollar should decrease... but if it's value is pegged to the Amero, then Canadians would be having their cake and eating it too - they could get the economic benefits from inflating their economy without having to pay the price for doing so.

That's exactly what happened under the Bretton Woods system after WWII - the US and UK were the only two countries in the world whose currencies were pegged to Gold, and Gold was pegged at a fixed value. So long as the US and UK had sufficient gold reserves to pay for redemption of their currencies, they could stimulate their economies at will without having to pay the price of higher prices... so long as all the other countries in the world were willing to hold US dollars or British pounds in their reserves and not redeem them for gold, the US and UK could have domestic prosperity without inflation... in effect, they passed on their inflation to their trading partners. Why do you think the 50's and 60's were such prosperous times?

The only thing, though, was that the system wasn't indefinitely sustainable... sooner or later, all these countries holding dollars and pounds were going to start redeeming them for US and UK gold reserves... which is what happened in the late 60's and early 70's - until there wasn't enough gold to cover all of the accumulated debts and the system collapsed in 1971. The result was the economic stagflation of the 70's. You want to go there again?