Compare and contrast NAFTA and the EU

Question

Compare and contrast NAFTA and the EU in terms of the types of agreements that they are, the institutions that operate under the agreement, and the long term goals of the arrangements.

Answer 1

NAFTA is a free trade agreement with some labor and environmental agreements as well.  It is not a customs union, because the different countries have different tariffs on outside nations and they have different free trade agreements with other countries.  All three countries have their own currencies.  There is no free mobility of people.  The long term goal is to create a free trade area and help Mexico's development.  There is little support to create a single political entity.

The EU is a political and economic entity.  The EU is a common market, with all countries having the same external tariffs, and 15 of the members use the euro.  Policies such as agricultural and environmental policy are decided at the EU level.  The EU contains a parliament, an executive branch, the European Commission, and the European Court of Justice.  The presidency rotates among the heads of state of the member nations.  The EU has open borders and free movement of people.  Externally, the EU often negotiates as a single unit.  The long term goals of the EU are expansion and integration.  There is a (so far unsuccessful) effort to draft a constitution.