Jean Monnet Center at NYU School of Law



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IV. The NAFTA and the WTO System

Inherent in regional integration are risks to the WTO system. The EU has become such an important political and economic force that this exercise in regionalism may have diminished the importance of maintaining an open multilateral trading system from a European standpoint. Similarly, the NAFTA has brought added economic security to the North American region, and it can be argued that this too potentially undermines the role of the WTO and multilateralism.

Yet the threats remain largely in the domain of theory. The EU has enjoyed political stability and sustained economic growth, despite the very costly reunification of Germany and a major world monetary crisis. It was predictable that Mexico would suffer social and political dislocation as its economy was privatized and liberalized, and this prediction has born fruit. However, in comparison with other countries at comparable levels of economic development and political transition, Mexico is doing fairly well. The North American economy has been strong in the face of economic crisis. The political and economic strength and resiliency of the EU and NAFTA have provided an extremely important anchor for the global economy over the past several years.

There is no proof that regionalization of the EU and North American economies has been responsible for their success. Strong American, British, French and German economies may alone have provided the necessary engines for economic growth in North America and Europe. However, on the historical record, it is difficult to make the case that regional integration has harmed the global economy, or that there is any near-to-medium term threat present. The NAFTA is so far a healthy complementary institution to the WTO.


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