Does North America Exist?: Governing the Continent after NAFTA and 9/11

The Canada Institute, in partnership with the Hudson Institute and the Wilson Center's Mexico Institute, hosted a panel discussion on the themes and issues raised in Stephen Clarkson's new book, Does North America Exist?: Governing the Continent after 9/11, on March 30, 2009. Clarkson and fellow panelists debated whether North America exists in a meaningful way economically, politically, and culturally by looking at the institutions created by NAFTA, a broad selection of economic sectors, and the security policies put in place by the three neighboring countries following 9/11. Discussion centered on the central argument of the book, which explored to what extent the United States' dominance in the continent has been enhanced or mitigated by trilateral connections with its two continental partners.

Answering a Critical Question

Do Mexico, Canada, and the United States constitute a world region that resembles the European Union institutionally, politically, or economically? This question was posed by Clarkson at the outset of his remarks and became particularly relevant following the implementation of the North American Free Trade Agreement (NAFTA) in 1994, which many believed would lead Canada, the United States, and Mexico to integrate politically and economically over time.

Nevertheless, said Clarkson, North America has not seen the type of integration many anticipated, particularly in political and institutional spheres. The only modest development in the area of North American governance since NAFTA's implementation was the establishment of the North American Leaders' Summit in 2005. In contrast to the political and institutional realm, Clarkson maintained that a strong argument can be made that a North American economic region has emerged over the last decade in specific sectors, most notably in agriculture and energy. Other sectors, such as pharmaceuticals and banking, have seen a degree of policy harmonization over time, but have yet to develop continental governing institutions. Within these sectors, NAFTA members still turn to global governing bodies such as the World Trade Organization to resolve continental disputes or negotiate regulatory agreements. A third category of sectors, including automobiles, steel, and textiles, have shifted from a primarily continental to global market.

Clarkson's analysis revealed that most political and economic issues are either too small to be solved solely within North America and require global institutions to resolve, or the continent is too large for others, leading NAFTA members to prefer to engage its partners bilaterally rather than trilaterally. However, Clarkson argued that North America is the right size, and that NAFTA members may benefit from increased governing capability in the areas of antiterrorism, the labor market, narcotics, and the environment.

Finding Common Ground

Three commentators offered their opinion of Clarkson's conclusion on North American integration. Charles Doran of Johns Hopkins University SAIS admitted that although there is currently little desire among NAFTA members to advance integration, harmonizing policies in certain areas could benefit the economies of Canada, the United States, and Mexico. Doran recommended that NAFTA members eliminate anti-dumping duties and limit subsidies, open labor markets among the three countries, and establish a common currency.

Sidney Weintraub of the Center for Strategic and International Studies challenged the premise of Clarkson'sbook, asking whether or not North American governance really mattered or was necessary. While continental governance is currently
lacking in North America, said Weintraub, the three NAFTA members have managed their political and economic issues reasonably well in the absence of formal institutions. He maintained that NAFTA has helped increase trade substantially within the continent and benefited Canada particularly by allowing the country to shift its production from raw to manufactured goods. Weintraub also noted that NAFTA should have become a customs union.

Robert Pastor of American University said that North America does exist economically and socially, but not yet institutionally. Advancing North American integration, said Pastor, will require Canada and Mexico to keep the United States focused on its neighbors rather than a plethora of other foreign policy issues. Canada and Mexico have the added challenge of contending with elements of the U.S. media that perpetuate the myth that NAFTA is responsible for job losses in the United States and should distance itself from its neighbors as a result.
Pastor challenged the assertion that North American economic integration is increasing, noting that while the first seven years after NAFTA's implementation saw a rate of increase in continental trade of roughly 10 percent, the years since have seen the rate of trade between NAFTA members slow to approximately 3 percent. Travel across the border has also declined by nearly 50 percent since 2001. Pastor offered several reasons for the continuing slowdown in continental trade: increased security at the borders that has reduced commerce since 2001; immigration and drug trafficking issues that have led the United States to view Mexico as a problem rather than a partner; China's emergence in the North American market; and little movement or desire among NAFTA members to improve and modernize its continental free trade agreement.

Pastor argued that while a continental market and North American society have indeed emerged since NAFTA, particularly in the border regions, the establishment of North American institutions has failed to keep pace with this development. According to Pastor, though European style institutions may not work for North America, some form of institutional continental governance would serve to benefit Canada, the United States, and Mexico.

Drafted by Ken Crist, Program Associate, Canada Institute
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