Regional Economic Integration and Nafta

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What are the pros and cons of regional economic integration? Regional economic integration is the agreements among countries in a geographic region to reduce/remove tariff & non-tariff barriers to the free flow of goods, services & factors of production with each other. The pros--

•By connecting economies and making them gradually more dependent on each other creates motivation for political cooperation and decreases the possibility for violent conflict •By classifying economies, countries can improve their political weight in the world •Economic integration entails that members give up some level of control over monetary policy, fiscal/tax policy and trade policy The cons--

•Advantages of regional integration have been oversold and the costs have often been ignored •The high-cost domestic producers are replaced by low-cost producers within a region •The low-cost external suppliers are replaced by higher-cost suppliers within the region •Regional trading alliances could emerge

How has NAFTA affected your business?
NAFTA is supposed to provide for labor equity across national borders. Unfortunately, NAFTA sanctions don't apply to the entertainment industry. Despite the presence of the three major guilds WGA, SAG, and DGA, Canada was given free reign over the American entertainment industry during the negotiations. If American producers partner with Canadian companies and they follow the guidelines set by the Canadian Audio-Visual Certification Office (CAVCO), they get a refundable tax credit "payable to production services corporations of 11% of salaries and wages paid to Canadian residents for services rendered in Canada." These tax credits are allowed by the accumulation of "points." According to CAVCO, credit points are allowed only if "the person who rendered the services is an individual who is a Canadian." The Department of Canadian Heritage, under which CAVCO operates, maintains that this is all in the name of "strengthening and...
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