North American Economic Integration

North American Economic Integration

Theory and Practice

Norris C. Clement, Gustavo del Castillo Vera, James Gerber, William A. Kerr, Alan J. MacFayden, Stanford Shedd, Eduardo Zepeda and Diana Alarcón

This highly accessible book explains the theoretical, historical and political background of the North American Free Trade Agreement (NAFTA), its impact and the debates surrounding its existence. In addition the authors provide a brief introduction to the theory of economic integration as well as a succinct overview of the evolution of the global economy, and the institutions that manage it, in the post World War II period.
Subjects: business and management, international business, economics and finance, international economics


  In this section we will look at the economic background of the three NAFTA countries, focusing on some of the key factors explaining their development (or lack of it)  as well as their trade relations with the rest of the world. Each of the three countries has developed in its own way, struggling with its unique endowment of geographic,  climatic, demographic, social and political characteristics which, in turn, led to different development and international trade policies.  One factor that was common to all the countries was a colonial experience; however, that experience was certainly different for each. The United States began as a  colony of Great Britain in the early 1600s and was, in the 1770s, the first to break its colonial ties. Mexico was colonized by Spain in the early 1500s. It did not break  its ties until the early 1800s. Europeans have fished off Canada's east coast since the early 1500s­possibily even earlier, but more permanent settlements did not come  until the French settled in the early 1600s. British settlers did not come until even later. The Peace of Paris in 1763 resulted in Canada becoming a British colony.  Canada was the last to gain its independence.  While it clearly goes too far to say that Mexico's colonial experience was ‘bad’ and those of the United States and Canada ‘good’, it is certainly true that Spain's  administration of Mexico, with its focus on gold and silver extraction, left Mexico with fewer possibilities for economic development than did...