Common Currency

Through the emergence of the Euro within the European Union, there has been a sparked discussion within the past decade of the possibilities of adopting a common currency for North America. In the completion of NAFTA Canada, Mexico and the United States have been exploring the possibilities of combining their currencies to further integrate themselves in relation to the success of the European Union. By adopting a common currency under a fixed exchange rate, there will be positive effects and negative effects that will influence all three countries involved. In trying to pinpoint the various advantages and disadvantages of a common currency one must look to the producers and consumers within the countries of the North American Free Trade Agreement. Through the comparison of Mexico, Canada, and the United States there is an ongoing debate in agreeing upon a common currency as all three countries have varying economic climates and regimes. Implementation of a common currency would most likely involve the relinquishing of each countries current currency units in a trade for the “amero.” The amero is the hypothetical term for the proposed shared currency between the three countries. As this proposition is still hypothetical, there are many factors to examine in taking the steps to further integrate NAFTA.

In 1999, Canadian economist Herbert Grubel came up with the idea of the amero when the euro came into effect during this time. Advocates of this theory claimed that this would lead to further integration of the North American Free Trade Agreement between the three countries. People began to compare NAFTA to the success of the European Union, which is deeply rooted in the principle of integration. The implementation of a common currency could be revolutionary for NAFTA, but the question lies in each particular countries befits versus their losses. This subject is controversial as it will have an impact on the economies of these countries as well as the rest of...