Author Question: Compare and contrast NAFTA and the EU in terms of the types of agreements that they are, the ... (Read 136 times)

LCritchfi · **on:** Jun 30, 2018

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.

What will be an ideal response?

Question 2

If U.S. export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency, a devaluation of the dollar during the currency contract period

A) should increase the dollar value of exports.
B) should not have any effect on the dollar value of U.S. imports.
C) must increase the BOT.
D) All of the above

DHRUVSHAH · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

NAFTA is a FTA with a limited institutional framework that settles trade disputes between members, and oversees the provisions of side agreements involving labor and the environment. There are no stated long term goals to further integrate any of the three economies. Indeed, it would take a major change of attitudes in both Canada and Mexico to convince either country to pursue further economic integration, especially with the United States. The one long term goal often expressed by the NAFTA countries is to expand the agreement to bring in other countries from the Western Hemisphere such as Chile. The EU is a customs union that hopes ultimately to transform itself into a full economic union with a single currency. The EU has an extensive governmental structure with a parliament, an executive branch and a judiciary.

Answer to Question 2

D