In this Report I am going to Compare and contrast the principles, working, policies e.t.c of the two Major Integrated Trade unions which are the EUROPIAN UNION (EU) & North American Free Trade Agreement (NAFTA). The European Union (EU) is an economic and political union of 27 member states which are located primarily in Europe. The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states. Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. The European Parliament is elected every five years by EU citizens. The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada. NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).
HISTORY of EU & NAFTA
The European Union was formally established when the Maastricht Treaty—whose main architects were Helmut Kohl and François Mitterrand—came into force on 1 November 1993, and in 1995 Austria, Finland and Sweden joined the newly established EU. In 2002, euro notes and coins replaced national currencies in 12 of the member states. Since then, the euro zone has increased to encompass 17 countries. In 2004, the EU saw its biggest enlargement to date when Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined the Union. North American Free Trade Agreement (NAFTA), trade pact signed in 1992 that would gradually eliminate most tariffs and other trade barriers on products and services passing between the United States, Canada, and Mexico. The pact would effectively create a free-trade bloc among the three largest countries of North America. NAFTA was inspired by the success of the European Community in eliminating tariffs in order to stimulate trade among its members. A Canadian-U.S. free-trade agreement was concluded in 1988, and NAFTA basically extended this agreement’s provisions to Mexico. NAFTA was negotiated by the administrations of U.S. president George Bush, Canadian prime minister Brian Mulroney, and Mexican president Carlos Salinas de Garter. Preliminary agreement on the pact was reached in August 1992, and it was signed by the three leaders on December 17, 1992. NAFTA was ratified by the three countries’ national legislatures in 1993 and went into effect on January 1, 1994. NAFTA’s main provisions called for the gradual reduction of tariffs, customs duties, and other trade barriers between the three members, with some tariffs being removed immediately and others over periods of as long as 15 years. NAFTA ensured eventual duty-free access for a vast range of manufactured goods and commodities traded between the signatories. Other provisions were designed to give U.S. and Canadian companies greater access to Mexican markets in banking, insurance, advertising, telecommunications, and trucking.
ECONOMY & TRADE POLICIES
The EU has established a single market across the territory of all its members. A monetary union, the euro zone, using a single currency comprises 17 member states. In 2011 the EU had a combined GDP of 17.57 trillion international dollars, a 20% share of the global gross domestic product (in terms of purchasing power parity). Of the top 500 largest corporations measured by revenue (Fortune Global 500 in 2010), 161 have their headquarters in the EU. In 2007, unemployment in the EU stood at 7% while investment was at 21.4% of GDP, inflation at 2.2%, and current account balance at −0.9% of GDP (i.e.,...