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North American Region

Introduction

The geoeconomic poles are defined as large regions that meet several countries closely integrated with each other and who have a great economic potential and thus a high share in the world economy. These regions attract and generate the most important international flows.

There are 3 global poles: 1. Western Europe; 2. North America; 3. East Asia – Pacific.

North American Region

The center of this region is considered to be the USA and it also includes Canada and Mexico. It appeared on a long regional trade platform, whichgives a certain solidity, and geographically brings together the countries that together make up the North American continent.

The share of this geoeconomic region constitutes:• 7% of the world population;• 23% of the world gross product;• 12% of world agricultural production.

Main characteristics

1. The favorable geographical and geopolitical location in comparison with the rest of the world.2. The presence of a large market of products and services.3. The high level of economical development based on the modern technologies.4. The high level of development of industry, especially in USA and Canada.5. The presence of a huge scientific and technical potential.6.The most liberal economic system in the world.7.The presence of banks, companies and corporations that control not only US national economy but also the International one.8.The presence of a high military potential equipped with the most advanced technologies.

Evolution North American region has roots in the history of the member countries’ development, in amplification of trade relations between them from the years that preceded the creation of the NAFTA agreement, which is actually a state of affairs, a product of trends in relations between the three countries

Negotiated in 1992, ratified in 1993 and implemented in 1994, NAFTA has its true point of origin in the Free Trade Agreement between Canada and the US (CUSFTA: Canada-US Free Trade Agreement), signed in 1988, which provided for the elimination of many trade barriers between the two countries over 10 years.

OBJECTIVES OF NAFTA To eliminate trade barriers & facilitate the cross-border movements of goods and services between the parties . To promote conditions of fair competition . To substantially increase investment opportunities . To provide adequate and effective protection & enforcement

of intellectual property rights in each territory . To create effective procedures for the implementation and application of this agreement, for its joint administration & for resolution of disputes . To establish a framework for further trilateral, regional and

multilateral co-operation to expand and enhance benefits of this agreement.

The Benefits of Integration of North American Free Trade Agreement (NAFTA):

1. NAFTA represents the largest free trade area, with a market of 426 million consumers and with a total value of output of goods and services12,000 billion. USD (1/3 of world gross product);

2. After a decade of integration, NAFTA registers an economic growth of: 38% in the case of USA, 30,9% in the case of Canada and 30% in the case of Mexic;

3. NAFTA is an attractive investment environment: in a decade investment between partners doubled, exceeding the 300 bln. USD, and simultaneously increased presence of foreign investors outside of the NAFTA; It currently receives over 24% of foreign direct investment registered worldwide, and provides 25% of foreign direct investment flows;

4. During the 1994-2003 the US exports towards the both partners increased from 134.3 billion. USD 250.6 billion. USD ( from 46.5 bln. USD 105.4 mild.USD in the case with Mexico and from 87.8 bln. USD 145.3 bln. USD in the case with Canada). Also the exports of Mexico towards the USA increased with aproximatively 234% ( from 58,9 to 138 bln. USD) and the exports of Canada increased from 2,6 to 8,6 bln. USD, it meas an increase of 227%.

5. During the first decade of the functioning of NAFTA, the production level of economic activities increased with 28% in USA, 55% in Mexico and 23% in Canada.

Negative impacts of NAFTA establishment:

U.S. trade with Mexico was growing before NAFTA's implementation, and would likely have continued to grow with or without the deal on a scale that "dwarfs the effects" of NAFTA itself;

the direct effect of NAFTA on U.S.-Mexico trade is fairly small, and thus the direct impact on the U.S. labor market is also small;

overall, the NAFTA deal has only expanded U.S. gross domestic product (GDP) "very slightly," with a similarly small and positive effect on the Canadian and Mexican economies.

Negative impacts of NAFTA establishment:

The close cooperation, and intensive economic relations with USA lead to the loose of Canadian national identity. For example only 3-5% of the companies have Canadians origins the rest of them are American.

Some of Canadian leaders have expressed concerns that the large number of Canadian industries will migrate southwards, in the United States and Mexico in search of cheaper labor.

Free trade has caused more U.S. jobs losses than gains, especially for higher-wage jobs. Ex: Factories, called Maquiladoras, are built on the Mexican border and workers are hired there to make goods at a much lower wage than workers would be paid in the USA

Evolution of countries

USA

Geographical factors :• Isolation and peripheral position in relation to the Old World;• Extensive and compact area with easy access to two oceans ; Bipolar system of productive forces (California and the

states of the Atlantic coast) Special position in the global socio-cultural space Highly developed military-industrial complex

Evolution of countries

USA

Achievments: In ‘90s, the average annual growth rate of the US economy was

higher than in Japan, Germany, France and Britain. Especially im-pressive is the reduction of energy consumption over the last thirty years by 33%. For half a century has doubled agricultural produc-tion, while the number of people employed on farms fell by 70%.

United States became the first and only world power, the ruling military-strategic, economic, technological, information and cultural space of the planet.

One of the most competitive economy. World leader in information technology.

Evolution of countries

CanadaThe main economic factors:

• liquidation of colonial independence and unification of territories in a single state;

• presence of a huge amount of mineral resources;

• massive migrations of young and skilled workforce from Europe;

• widespread introduction of technology and production mechanization of products in sectors of the economy;

• massive foreign capital investments in key sectors of the economy;

• reduced costs for military.

Evolution of countries

Mexico

Mexico is an emerging country and a major world producer of oil (the main wealth), silver, copper, rare metals.

The industry is diversified in several sectors: metallurgy, chemical engineering (Petrochemicals). Agriculture is based on subsistence crops: corn, beans, rice, and export crops: coffee, cocoa, cotton, precious wood, rubber.

In 1992 Mexico signed the agreement on free trade zone with Canada and the US.

Exports by country

Member Country Contribution/ Supply

United States Technology, Services, and data proces-sing, medical and space research and capital

Canada Mineral, forest products, energy and technological expertise

Mexico Labor, Petroleum and agricultural products

Perspectives

Main perspectives of development of North American Region are:

Formation of North American Union; Introduction of Amero currency; Cooperation and free trade with South American

countries; Promotion of the Eurasian geostrategy.

Conclusion

The North American geoeconomic region has played an impor-tant role in the overall development of the three nations through : the progressive elimination of tariffs and trade barriers, dispute resolutions, commitment to intellectual property and environment legislation, etc. Also it plays essential role in development of the world’s economy through innovative technology, directioning of raw materials, energy resources and capital flows and promotion of free entrepreneurship.

Sources:

1. “Geoeconomie” C. Matei, M. Mâtcu, V. Sainsus, M. Hachi, A. Matei2. Maxwell A. Cameron, Brian W. Tomlin (2002) “The making of NAFTA: how

the deal was done”3. M. Angeles Villarreal (2010) “NAFTA and the Mexican Economy”4. “The North American Free Trade Agreement(NAFTA)” -M. Angeles Villarreal

,Ian F. Fergusson5. http://rationalwiki.org/wiki/Amero6. http://www.international.gc.ca