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Article 1: NAFTA is the world’s largest free-trade area. Trade, investment and multiple exchanges has increased since NAFTA.
Since September 2001, global trade of goods, services, investments, people and stocks markets has drastically increased thanks to globalization. The 3 countries trade together more than with the rest of the world. The movement of people and immigrant in the countries is also very high.
Canada’s economy is performing very good. The UN has never ranked Canada lower than 8 in the world, with a population far lower than the other top 10 global economies. US is the best economy of the world, and NAFTA has added between 1 to 2 million jobs in the US. Mexico’s economy has well performed but with a few crisis.
The US has benefits a lot from NAFTA, especially in the energy sector has Canada and Mexico have a lot of resources of petroleum. In the other hand, Canada and Mexico are very dependent from the US for their economic prosperity.
Canadian and American leaders supports the idea to create an European union of North America that would results in the creation of a common market, the free movement of labor and a common currency (amero). But they would prefer to do it only the both of them, not with Mexico. But a North American common currency is not likely to emerge, due to the supremacy of the US dollar. Canada and Mexico are likely to adopt the US dollars as their official currency.
The Bush administration wanted to expand the free-trade initiatives with other countries of the world. Negotiations are in process for some countries.

Article 2: For Mexico, a trilateral integration is more attractive than a bilateral integration with the US. But, Mexico needed to carry out some economic reforms to be able to face the changes that regional integration will bring to the country. Effects of economic integration for Mexico: increase in Mexican exports and imports, increase in investment and economic growth.
In 1989, trade between Canada and Mexico was at a minimal level. On the other and, Canada and the US had already a strong relationship for trade. Canada fear their loss of sovereignty in a free trade agreement or a customs union and a common market with north American countries. Mexico will develops its economy and be a strong competitors for Canada. So Canada gains more in signing a free trade with the US and Mexico than not signing it, and let Mexico and the US make a deal together, that will be very unfavorable for Canada.
For the US, results of a North American agreement is trade and investment creation, new market opportunities and create a more stable relationship with Mexico. They need a place capable of protection the interests of all three countries, respecting the differences of their cultures and supporting their highest values.

Article 3: In the economic context, the practical meaning of economic integration is the removal of barriers to commercial exchange.
Why integration is important in the Americas? Positive link between economic integration and growth and between firm-level productivity and exposure to foreign markets. Economic integration increase competition.
Trade liberalization may be a necessary, but not sufficient, condition for growth. Institutions rule: protections of property rights, lack of corruption, healthy financial markets, infrastructure, and education may also be necessary conditions for growth à Mexico experience with NAFTA.
How to define, measure and evaluate economic integration ?

·       When trading the countries must agree on a price, price equalization. We use the Purchasing Power Parity (PPP) to compare prices in different currencies.

·       Product market integration can be analyzed with factor markets, capital and labor.

·       Trade volumes, the most common measure of economic integration.

·       Look at the range of products traded, increasing the range of goods that are traded increase the choices of products available to producers.

Article 4: USMCA modernized the NAFTA by incorporating areas such as digital trade, state-owned enterprises, labor, environment, small and medium-sized firms, competitiveness, anticorruption, good regulatory practices, and a functioning dispute resolution system.
North America can be more competitive by improving conditions for innovation that happen in a decentralized fashion. The USMCA enable member countries to achieve a deeper integration and improving competitiveness in many economic sectors.
One quarter of total digitally ordered goods and services in North America would be traded between Canada, Mexico and the US.
How can digital trade flourish in North America, they need to cooperate in developing and integrating their digital market by following the chapter 19 of the USMCA:

·       prohibition of the imposition of customs duties on digital transactions,

·       prohibition of restrictions of cross-borders data transfers,

·       prohibition to locate computing facilities in a member state as a condition of doing business,

·       prohibition to require the transfer or access to the source code of software as a condition to selling or using that software in a member state’s territory.

THE USMCA also requires that member states have legislations and regulations to protect consumers in digital trade transactions, with measures to limit unsolicited electronic commercial communication and legislations to protect individuals right to privacy with respect to their personal data.
The opportunity provided by the USMCA can be used to improve the competitiveness of each of the three countries and of the entire north American region while also furthering climate change mitigation and adaptation.

The environmental chapter 24 of the USMCA includes requirements for maintaining the effective enforcement of environmental laws, provisions aimed at protecting biodiversity, and some more regulations but is not not very sufficient to really fight against climate change.
Maelle BINET

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The North American integration was speeded up by the creation of NAFTA. Now that the trade agreement have been replaced, we can observe that there’s mixed results. The agreement benefited to all the members by creating jobs, increase national income and improve their international influence. However, as the country presents different characteristics and level of development.
The main pillars of USMCA are new ressources to help small and medium sized entreprises, enhanced intellectual property, liberalization of financial services and also reforms on automobiles and agriculture industries.  These new reforms directly impacted the business environment. For example, in order to qualify for zero tariffs, the components of automobiles must be at least 75% from Mexico, Canada or United-States. This requirement changes the production in automobile industry : before USMCA, 62 .5% of the components must be from North America. Moreover, the USMCA aims to support small and medium sized entreprises in developping their international competitivity. This point is relevant for Mexico because most of the markets in the country are oligopolies.

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It's interesting to notice that NAFTA is the world's largest free-trade area since 1994 and that the cooperation is completely benefical for all three countries : USA export alot in these countries, Canada and Mexico are privileged destination for american tourist and mexico integration to the trade world is increase.

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Four most frequently used measures that capture various aspects of economic integration:

1.       Price Convergence:

Measuring economic integration through price convergence between Canada and the US is easier than between Mexico and the US.  The Canadian dollar is relatively flexible and moves with inflation to offset the price differences. That’s why Canada and the US have relatively similar inflation rates. The Mexican peso, on the other hand, is relatively inflexible, which affects the trade balance between Mexico and the US.

2.       Factor Markets (Capital and Labor):

Product market integration can be analyzed by focusing on factor markets such as the volume flows of capital or labor. Capital flows have been a force integrating North America as the US manufacturing output and Mexican maquiladora output are very close related. However, since labor flows were specifically excluded from the main NAFTA agreement, alternative metrics for labor market integration are real domestic purchasing power or absolute wage convergence. US and Mexican wages follow a similar pattern although Mexican wages are much more volatile than US wages.

3.       Trade Volumes:

Canada is the largest US trading partner. However, Canada’s share of total US trade has been falling since 1999. On the other hand, trade between Mexico and US has been increasing. Mexico’s share of US imports and exports more than doubled over the last 20 years. This shows that trade volumes suggest an increasing depth of product-market integration.

4.       Product availability:

Lastly, another measure of economic integration involves looking at the range of products traded or the market “thickness”.  Bu unfortunately, it isn’t clear whether falling trade barriers increase the range of goods traded or not.

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Regional integration in North America represents one of the largest examples of regional integration in the world. The first agreement was the NAFTA, signed in 1992 whose goal was to eliminate barriers and tariffs in order to facilitate the economical exchange between the three members. Later in 2020 it was replaced by the USMCA under Trump's presidency with the goal to make it more beneficial for the USA.
Mexico, Canada and the USA have different opinions about the north american economic integration mainly because of the different backgrounds. Canada and Mexico don't have much in common and do not represent big trading partners for each other, this is why this agreements may represent a good chance for them to start cooperating and exercising comparative advantage.
The States understands the importance of integration in today's world and is conducive to supporting the costs of integration as long as the benefits are superior.

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Economic integration is related to growth and can be supported through trade agreements such as NAFTA. To measure economic integration there are four approaches. Namely the observation of the following: product-level prices, factor markets, trade volumes, and product availability.

For product-level prices, one must account for differences due to exchange rates and inflation rates. There are no major differences between the U.S. and Canada, and the exchange rate can be considered to be working well. In terms of the USA and Mexico, there is a huge difference. The exchange rate of Mexico is relatively inflexible which has also an impact on the trade balance.

As for factor markets, NAFTA was originally intended to allow easier capital flows and liberalize capital markets. This was successful since a rise in capital flows can be observed after NAFTA. With a focus on the factor of labor, it can be said that Mexican labor markets especially close to the border are affected by wage shocks in the USA.

In addition, the volume of trade is also an indicator that can be observed. In this regard, Canada is the largest trading partner of the USA and Mexico can report a doubling of its trade volume with the USA.

Besides that, the product availability in terms of variety has increased. In 2001, the USA imported three times more variety than in 1972. When it comes to supplying variety to the USA, Canada and Mexico are ranked on first and eighth rank and have hereby improved their rankings.

- Lisa Marie Panzer

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Economic integration is critical for national well-being because it influences overall growth. Growth also determines a country's standard of living. Thus, it is one of the benefits of trade, just like innovation and productivity.
There are various trade agreements all over the world; for example, in the EU, only one currency is used, whereas in America, several trade agreements have emerged. These agreements aimed to promote integration by removing various political barriers to commercial exchange. Price converges when trade barriers fall while all other factors remain constant. One tries to harmonize the standards and lower non-tariff barriers. Lowering these political barriers may also lower natural barriers like distance. Of course, physical distance cannot be changed, but trade agreements increase the volume of trade, which can result in lower transportation costs because the average cost of transportation falls.

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Philipp Absmeier
The most commonly used measures of regional integration are product-level prices, factor markets, trade volumes, and product availability.

Attempts to compare prices as a way to measure integration would have to take into account the macroeconomic imbalance implied by the difference in inflation rates and the adjustment in the different currencies. In the United States-Canadian case, this does not seem to be a very serious problem because the exchange rate tends to effectively offset differences in inflation rates. In the Mexican case, however, the exchange rate is not as effective and therefore makes price comparisons more difficult.

When trying to measure the integration via factor markets the rise in assembly plants in northern Mexico and Central America and employment potentially represents direct integration of the U.S. and Mexican economies because it represents a fragmentation of the production process. Also, the results from the paper show that U.S. and Mexican labor markets are closely linked. Mexican wages respond to wage shocks from the United States and return to the equilibrium differential relatively quickly. In addition, the paper shows that border regions are more integrated with the U.S. than inland regions.

Analyzing the level of integration with the trade volumes, the Numbers show a high integration especially after NAFTA when Mexico's share of total U.S. imports rises by nearly 50%, Mexico's share of U.S. exports rises by approximately 100%, and Canada being the largest trading partner of the US.

In terms of product availability product markets might be integrated if prices equalize, as discussed earlier, but empirically one can only compare the prices of goods that are actually present in the market. Increasing the range of goods that are traded, and therefore increasing the choices of products available to producers, is one of the most significant gains from trade liberalization. Measure, therefore, ranges from zero to one as market thickness increases.

Supplying varieties to the United States, Canada moved from fourth to first and Mexico moved from thirteenth to eighth.

However, as the paper also showed, it is not easy to measure regional integration. In particular, it is not measurable by a single measure, but many different measures and environmental conditions have to be taken into account.

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International economic integration is important since it is often linked to growth and has effects on both producers and consumers. In North America Capital flows increased after NAFTA was created but generally speaking, we can say that trade and investments has been fluctuating during these years. Overall, all three nations ( US, Canada, Mexico) have benefited in the aggregate from the economic integration spawned by NAFTA. 

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International economic integration is important since it is often linked to growth and has effects on both producers and consumers. In North America Capital flows increased after NAFTA was created but generally speaking, we can say that trade and investments has been fluctuating during these years. Overall, all three nations ( US, Canada, Mexico) have benefited in the aggregate from the economic integration spawned by NAFTA. 

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Between the US and Canada trade relations and economic integration are advanced. Compared to their trade relations, Mexico's trade and investment flows look relatively unimportant.

Mexico needs to work against the loss of economic growth by

- prevent isolation from trade blocks

- prevent loss of direct investment

- importance of foreign direct investment (FDI)

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The United States-Mexico-Canada
Agreement (USMCA) is one of the most important and significant agreements the three countries have signed since the WTO. It gives North America the potential of an integrated and competitive market while avoiding political tension. Important priority areas are the improvement of the north american economic competitiveness, the strengthening of the supply chains, expanding the digital trade, improving labor conditions and wages and supporting the transition to low-carbon economic growth. As a union they can face future global challenges together, for this, they need to have a good communication and close cooperation. For North Americas economic future and collective prosperity it ist crucial to keep this agreement alive.

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The USMCA is a good approach in terms of local health care in Mexico. US import amounts of health devices from Mexico and exchange programs for Mexican students in America could help Mexico raise its level of education. Well-trained personnel would raise health standards in Mexico and create a better health care system. Local centers of excellence are a good basis for highly qualified education and an attractive place to live.China has a large share of international trade and very well-developed supply chains and logistics. This makes China very competitive and cheap. It would be too expensive to manufacture Asian products in Mexico and distribute them to the rest of North America. For some important goods, it would work, but a complete stop of trade between China and North America is not possible from the American point of view.

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The USMCA is a good approach in terms of local health care in Mexico. US import amounts of health devices from Mexico and exchange programs for Mexican students in America could help Mexico raise its level of education. Well-trained personnel would raise health standards in Mexico and create a better health care system. Local centers of excellence are a good basis for highly qualified education and an attractive place to live.China has a large share of international trade and very well-developed supply chains and logistics. This makes China very competitive and cheap. It would be too expensive to manufacture Asian products in Mexico and distribute them to the rest of North America. For some important goods, it would work, but a complete stop of trade between China and North America is not possible from the American point of view.

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Canada and Mexico are the two largest export markets at the moment for the U.S., being Canada as the largest trading partner in terms of trade volume.

Even since NAFTA and now USMCA, Mexico and Canada are not trading much with each other, so there is still space for a deeper integration.

The duties of the U.S. on Mexican and Canadian imports of steel and aluminum executed from Donald Trump were economically harmful to Canada.

Mexico trades a lot of medical stuff to the U.S., but to strengthen the health sector of North America it needs a deeper integration for which the USMCA can be used as a framework.

Some facts about the USMCA:

Labor protections are an important part of the USMCA.

The “USMCA provides the necessary framework to mutually recognize professional degrees and issue temporary entry visas for cross-border service provision.” This is a big improvement, because workforce can now be shared more easily among the North American countries.

The agreement has a higher bargaining power than NAFTA, because there are “new mechanisms to exercise the rights of salaried workers and enhancing the credibility of sanctions in cases of non-compliance”.

The USMCA is the most advanced among existing free trade agreements in terms of liberalizing digital trade.

Although the USMCA does not deal with the climate change directly, it could diminish some of the impacts of climate change on the environment because of some articles for a greater protection of nature.

The three countries are currently developing policies that clearly undermine the objectives of the agreement.

To strengthen the competitiveness of North America with regard to China, the three states should integrate much more deeply.

Leon Neuwirth

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First thing is that already through the implementation of NAFTA in 1994 three of the top ten economies in the world are brought together by this act of regional integration. This created one of the biggest internal markets in the world. Especially Mexico and Canada exporting nearly 80% of their goods and services into this market. This integration increased also the foreign investments between Canada, Mexico and the USA. Most of the trade logically happens to the USA as it is the biggest country and economy out of those three and geographically in the middle. And even if the trade between Canada and Mexico increased over the years it is only a very little amount compared to the trade between each of them and the USA. In general all three of the countries benefit through this even if there are some things that could be improved furthermore.
(Felix Scheuer)

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Regional integration in North America is initially lead by USA. As we can see economies of the three countries, those power balnce cannot be considered as at same level. NAFTA is the flame work that enables to establish one market for most products on the North American as continent. It brings benefits to all participating countries by encouraging growth and development. Having a large common market is mostly good when it comes to make a greater profit in vast space. But at the same time, upon regional integration, they should look other regions outside of the integration so that the agreement is actually effective in global level.

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NAFTA is a pact bringing together 3 of the world’s 10 largest economies
Since 1993, U.S. trade with its North American neighbors has grown much more rapidly than its trade with the rest of the world
Mexico has opened itself to the rest of the world with its membership in NAFTA
Unequal conditions, relationship between Cananda and USA better - > no common currency, which will probably not change in the next time

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Since 1994, NAFTA is the world’s largest free-trade area. It has already brought about aggregate economic gains for all 3 North American nations. But with its evolution during these last years, USA, Canada and Mexico should think about moving to the next level in the form of a customs and monetary union or even a common market possessing many of the attributes of the European Union (EU). In a recent survey, about a third of Canadian business leaders supported an EU-style integration in North America. It shows that these 3 countries really need the help and the collaboration of each other, especially from USA to Mexico and Canada. Indeed, these latters would prefer to be closer with the USA while the USA is fine with the actual situation. We can see the asymmetrical nature of the relationship. Unfortunately, there will not be any North American common market in the close future, especially because the creation of a common currency between the 3 countries is very difficult.

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NAFTA brings together three of the 10 largest economies to promote North American cooperation and regional integration. All three countries benefit from each other, especially Canada and Mexico from access to the American market. Likewise, the free trade agreement has enabled more than a million Mexicans to get jobs in the US. As well, transportation routes allow trade with other countries that could not otherwise be reached. Thus, Canada's GDP is linked directly to trade and economic ties with the United States.
Ultimately, countries are to some extent dependent on each other.

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Comparing prices in the United States and Mexico is complicated because they have different rates of inflation and the peso dollar exchange rate has not been adjusted to account for the difference.

Capital flows have increased after NAFTA and appear to be a factor in merging the two economies. Legal labor flows have also increased, but apart from and concurrent with NAFTA, the United States has stepped up border enforcement in ways that may have mitigated the integration effects of product and capital market integration.

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USA exported more to Canada than to the EU
increase of FDI from the USA in Canada
Canada and Mexico are top destinations for US travelers
Mexico: creation of jobs, more opne to world market