Negotiating among these economic sectors to pass regional trade agreement Issues NAFTA and Domestic Sectors Domestic Politics Not all domestic groups support NAFTA 3 broad economic sectors Land labor capital Domestic politics involved in trade policy Democracy and policy making Elections and representation Interdependence and Trade Hypotheses International vs Regional Trade Regional Trade H1 Regional International Trade H2 Regional Regional Protectionism Reduces International trade European Union The European Union Cooperation in the Global Economy Nationalism vs Supranational collective John Monnet and Robert Schuman Propose French and German Merger European Coal and Steel Community 1953 Along with Italy and Benelux Countries Reduce tariffs on steal and coal Treaty of Rome 1957 Same six countries 1 European Atomic Energy Community 2 European Economic Community Economic vs Security Propose European Defense Community Three Strategic Policies of Trade Free Trade Area reduction of tariffs and NTBs on the movement of goods across borders Customs Union member states adopt a unified set of tariffs with regards to goods coming in from outside of FT area Common Market member states allow labor and capital to flow freely across borders European Monetary union Signed 1978 Regulate Currency Exchange Fixed exchange rate Three differences from Old Bretton Woods System Maastricht Treaty 1991 The Euro Full circulation in 2002 EU effectiveness Monetary Union Euro European police force Unifying Military Britain Denmark and Sweden do not adopt euro Sweden s Foreign Minister Lindh assassinated Britain s PM John Major vote of no confidence Rise of Germany in Europe North South Relations The Developing World