North American Integration

North America is guardedly defined as everything in the Western Hemisphere north of the Panama-Colombia border, gathering in the islands of the Caribbean, the Bahamas, Bermuda, and extending northwestward to the western tip of Alaska and northeastward to Greenland. Perhaps Denmark would prefer Greenland to be considered part of Europe. South America sometimes lays claim to the closelying Netherlands Antilles as well as to Trinidad and Tobago. For the purposes of North American integration, Hawaii is pulled eastward as part of the United (but not connected) States, but is it really part of Asia?

Integration comes in several forms, primarily economic, political, and social. The United States may be socially and economically integrated, but as long as it remains a federation of states with limited federal power, it is not fully politically integrated. There is (at least to Guatemala) lingering debate about the status of the former British Honduras as Belice (a Guatemalan province) or Belize (a sovereign nation). Is this an issue of political alignment or of integration? North American economic integration is the consequence of political divisions aligning. Not all of the North American political divisions speak for themselves. Although the movement is clearly toward independence, there remain some [Page 1071]unique units of uncertain future within North America. These include an autonomous commonwealth (Puerto Rico), associated states (British Windward and Leeward Islands), overseas departments (French West Indies), and overseas territories (French Saint Pierre and Miquelon), numerous independent states within the British Commonwealth of Nations (Jamaica, Barbados, and so on), a few territories (U.S. Virgin Islands), an integral part of a European nation (Greenland-Denmark), and dependencies (Cayman Islands). Political identity becomes important to the question of autonomy to enter into economic integration agreements. For example, the tiny French islands of Saint Pierre and Miquelon (overseas territories), lying close to the southern coast of Newfoundland, are not part of the North American Free Trade Agreement (NAFTA) because they are not part of Canada, nor is the larger Greenland in NAFTA because it is an integral part of Denmark.

The role of the United States in North American integration, as the only world economic and political power, is so central that economists speak of a hub-andspoke relationship in the area, with the United States the hub and as many spokes surrounding that hub as agree to the U.S. terms of economic engagement. The economic integration movement within North America has been either to associate with the United States (for example, Canada-United States Free Trade Agreement, Canada-USFTA, NAFTA, and Central America Free Trade Agreement, CAFTA), or to form an area exclusive of, but organized at least partly to benefit in dealing with, the United States (for example, the Central American Common Market, CACM). Perhaps the most moderating political force in the region that seeks balanced free trade area agreements is the Organization of American States (OAS). The OAS has been important in advancing both the Free Trade Area of the Americas (FTAA) and the CAFTA.

The only country that has been able to achieve formal—but modest—integration agreements with the United States for more than a century is Canada. The first Canada-United States discussions were less to achieve integration than to thwart U.S. annexation of Canada. Canadian Governor Lord Elgin proposed an economic reciprocity agreement in the mid-nineteenth century, but U.S. Southerners feared any association that might lead to political annexation and the addition of slavery-opposing states. Canada prevailed with the 1854 Elgin-Marcy Treaty (or Reciprocity Treaty) creating the first significant North American trade area, but in 1866 the United States terminated its participation because of Canadian sympathies for the Confederacy. For more than a century thereafter, Canadian-U.S. trade would be based largely on Canada's awareness that it was economically dependent on the neighbor south of its border. After protectionist trade policies of the early 1930s subsided, the United States Reciprocal Trade Agreements Act (1934) returned U.S. tariffs to pre-1930 levels, and trade increased dramatically. Canada and the United States were both charter members of the General Agreement on Tariffs and Trade (GATT) in 1947. Post–World War II trade tended to precede and lay the foundation for trade agreements. When the Canada-USFTA was signed in 1988, free trade already constituted some 70 percent of the two nations' trade. They were and remain each other's principal trading partners. NAFTA extended Canadian-U.S. free trade in 1994, but added a nation of dissimilar language, heritage, and economic development—Mexico. Further agreements might either increase the level of integration among the existing nations, or maintain the degree of integration although expanding the number of participants.

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