THE EUROPEAN UNION (EU) AND NAFTA

The European Union (EU) and NAFTA



The European Union (EU) and NAFTA

Introduction

This paper presents the comparison between European Union and NAFTA. Originally created to preserve peace between countries in the 1950s, today, EU is the organization of regional integration. Unlike the Europeans, the leaders of U.S., Canada and Mexico have never had the idea to make a priority of NAFTA as an economic and monetary union. They mainly wanted to deal with the consolidation of the EU. Thus, although it entered into force on 1st January 1994, NAFTA has a degree of economic integration much lower than the EU.

European construction began in 1951, with the signing on a treaty of six countries which established the ECSC (European Coal and Steel Community). Then in 1958, the six countries implement the EEC (European Economic Community) which is actually a customs union tending towards the common market, since its members wanted to progressively liberalize the movement of factors of production within it. In 1960, a directive established the free movement of capital and the 1961 Common Agricultural Policy (CAP) was adopted. A common external tariff is established in 1968 and removed tariffs and the free movement of labor was established.

The North American Free Trade Agreement is an extended business association between Canada, the USA and Mexico, forming a free trade area in the North American continent. With the entry of the NAFTA into force, there were numerous duties abolished, many more were exposed with time. The agreement was embodied in the Canadian-American Free Trade Agreement of 1989. In contrast to the European Union, no supranational government performs its functions and requirements take precedence no position over national law. It is an intergovernmental treaty.

The EU, like NAFTA, is an economic union that fosters greater trade and cooperation between various countries of Europe. EU members; on the other hand, have a common currency, while NAFTA members do not have the same currency. In addition, the EU has a political element and its own government, while NAFTA does not have both of them of its own.

Discussion

The Free Trade Agreement is a set of rules that two or more countries agree to sell and buy products and services in the area who understands. In these rules, it is defined that how and when trade barriers are removed to ensure free passage of goods and services among the participating nations that is, how and when permits, fees and licenses, and particularly the rates tariffs are removed. In a "free trade area", as opposed to a system of tariff preferences released the substantial barriers to trade among member countries but, unlike the customs union, each country maintains its tariffs and trade patterns against another (Aspinwall 2006, 90).

The NAFTA is important because it constitutes an effective means to ensure access of our products to foreign markets, in an easier way and without barriers. It also allows increasing the marketing of national products, to generate more employment, to modernize the productivity, improve the welfare ...