Toward a North American Economic Union

By Nouriel Roubini – Project Syndicate

To resolve their current tensions, Canada, Mexico, and the United States should start drafting plans for a North American Economic Union. A single market in goods, services, capital, labor, technology, data, and information would benefit all three countries far more than any alternative arrangement.

NEW YORK – Trade and political tensions between the United States and its immediate neighbors, Canada and Mexico, are at historic highs, raising fears of a full-scale trade war and a collapse of the US-Mexico-Canada Agreement (USMCA), which itself was a renegotiation of the North American Free Trade Agreement. The way President Donald Trump tells it, both countries could be doing more to rein in the flow of migrants and fentanyl. Moreover, since each runs a large trade surplus vis-à-vis the US, he accuses them of unfair trade practices, and of serving as a foothold for Chinese exporters seeking to circumvent US tariffs.