Monday, August 8, 2011

Robert A. Pastor's "The North American Idea"

In his seventeenth book, The North American Idea: A Vision of a Continental Future, Robert A. Pastor, a noted policy-maker and analyst, who founded and directs the Center for North American Studies at American University in Washington, D.C., offers a rationale, a vision, and a blueprint for a more prosperous, secure, and dynamic North America.

Few in the United States realize that the two most important markets for U.S. exports are not China and Japan, but Canada and Mexico, and the two most important sources of energy imports are not Saudi Arabia and Venezuela, but Canada and Mexico. Canada and Mexico certainly understand the importance of the United States to their economies and societies, but the United States seems unaware of their importance. From the signing of the North American Free Trade Agreement (NAFTA) in 1992 to 2001, trade among the three countries of North America tripled, intra-regional integration soared, and the North American share of the world's product increased from 29 percent to 36 percent. Since 2001, integration has declined, and the share of world product has returned to where it begin in 1992. Pastor's book explains why and how we can re-energize North America.

Pastor applied the “Page 99 Test” to The North American Idea and reported the following:
Page 99 makes two points of special relevance to the book's thesis. The idea of North America generated fears among some in each of the three countries. In the United States, some feared a loss of sovereignty or jobs; neither occurred. The U.S. became stronger, and the surge in trade coincided with the largest expansion of job creation in American history. Some in Canada and Mexico feared that NAFTA would permit American companies to acquire and control their economies, but the figure at the top of p. 99 shows those fears were also groundless. Both countries experienced a rapid growth in foreign investment, but the figure shows that the percentage of that owned by Americans actually declined. And indeed, the page describes the extraordinary growth of Mexican and Canadian multi-national corporations.

The second point made on p. 99 was that despite the talk about globalization, most multinational corporations (MNCs) are actually regionally-based. Of 348 of the 500 largest MNCs in the world, 154 firms are North American with 75 percent of their sales in North America and only 15.6 percent are based in Europe and 7.5 percent are in Asia. So the world economy is increasingly shaped by the three regions, and the capacity of each region to compete in the future will depend on the degree to which the governments in each region can find new formulas for cooperation and integration.

North America has not begun to search for these formulas because its leaders have not even grasped the "North American idea" - that the power of the region in the future will depend on a new level of cooperation and coordination.
Learn more about The North American Idea at the Oxford University Press website.

--Marshal Zeringue