ASSESSMENTS

NAFTA: Capitalizing on Natural Advantages

Sep 18, 2016 | 13:15 GMT

In North America, the Three Amigos' Friendship Endures

(Stratfor)

Summary

Editor's Note: This is the final installment of a seven-part series examining how the world's regional economic blocs are faring as the largest of them — the European Union — continues to fragment.

More than two decades after its signing, the North American Free Trade Agreement (NAFTA) is still a source of controversy. But the debates occurring in the bloc's member states — the United States, Mexico and Canada — are less about whether their experiment in integration was a good idea and more about how close they should get. The three were bound to merge in some respects, after all, considering that North America is one of the only major economic regions that can largely sustain itself without trading beyond its borders.

Even so, the contention that surrounds the prospect of deeper ties among NAFTA's economies will likely prevent the bloc from seriously considering steps beyond the free trade agreement it already has in place. Instead, the geopolitical forces pulling the organization's members together will manifest in less formal links, such as the construction of connective infrastructure, tightening of regional supply chains and growth in energy trade. Whether NAFTA will remain the dominant framework for North American trade in the long run, or someday be superseded by a more robust deal like the Trans-Pacific Partnership (TPP), is unclear. It is clear, however, that at least for the next few decades, the three NAFTA members will maintain their close friendship, regardless of the form it takes. 

More than two decades after its signing, the North American Free Trade Agreement (NAFTA) is still a source of controversy. But the debates occurring in the bloc's member states -- the United States, Mexico and Canada -- are less about whether their experiment in integration was a good idea and more about how close they should get. The three were bound to merge in some respects, after all, considering that North America is one of the only major economic regions that can largely sustain itself without trading beyond its borders. Even so, the contention that surrounds the prospect of deeper ties among NAFTA's economies will likely prevent the bloc from seriously considering steps beyond the free trade agreement it already has in place. Instead, the geopolitical forces pulling the organization's members together will manifest in less formal links, such as the construction of connective infrastructure, tightening of regional supply chains and...

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