1	"FIRST ANNUAL NAFTA MARKET INTEGRATION..." FIRST ANNUAL NAFTA MARKET INTEGRATION WORKSHOP. Cancun, Mexico, May 6th/7th. 2004 SESSION II EUROPEAN PERSPECTIVE ON MARKET INTEGRATION David R. Harvey, School of Agriculture, Food & Rural Development University of Newcastle upon Tyne
2	OUTLINE Where did European Integration come from? Market Integration in Agriculture Economic Questions Real Questions Fundamental Questions Conclusions & Lessons for NAFTA
3	ORIGINS OF EUROPEAN INTEGRATION Aftermath of WWII (after WWI) Internationalist revival (IBRD, IMF, GATT) European political imperative European Market integration a necessary condition (even evil), not necessarily a desirable end in itself Inherent contest between political unification and intergovernmental cooperation.
4	PROGRESSION OF (EUROPEAN) INTEGRATION Free trade area Customs Union Common Market (Single European Market) Economic Union Monetary Union Political Union
5	MARKET INTEGRATION in AGRICULTURE Customs Union & CAP = Market integration Free European Trade Community Preference (common external tariff) Common Financing But: MCAs, and competing ideas of support E.g BSE, FMD etc. border closures Have European markets integrated?
6	ECONOMIC QUESTIONS LOP = perfect market integration? Better: competitive arbitrage (contestable markets) = integration. Segmented markets, transactions costs & risks, dis-equilibrium effects all frustrate attempts to demonstrate LOP, or even contestable markets. But, Survival of the fittest will generally -> integrated markets. Perfect competition ≠ climax condition of integrated markets And Governments & Governance -> interference.
7	REAL QUESTIONS Integrating economies and societies? European concept of “cohesion” -> how and how much support to agriculture? + residue of rent capitalisation from past policies -> Continued Policy disputes & evolution Policies may ‘integrate’ but fail to be socially and politically sustainable - raising as many questions as they answer.
8	FUNDAMENTAL QUESTIONS How do we (as societies) choose? Politics - the choice between gilt (self-interest) and guilt (the public interest) Can market integration solve this choice unaided? If not, then market integration is only a beginning, and not even the end of the beginning.
9	Cohesion vs. Freedom?
10	Cohesion vs. Freedom?
11	Cohesion vs. Freedom?
12	Cohesion vs. Freedom?
13	Cohesion vs. Freedom?
14	Cohesion vs. Freedom?
15	Cohesion vs. Freedom?
16	CONCLUSIONS & LESSONS FOR NAFTA Markets will integrate to the extent possible Disintegration stems from socio-political ‘interference’ But policy harmonisation requires social cohesion & integration Encouraged by market integration? In Europe? In NAFTA??? Need an integrated Social Science to make sense of this. Meanwhile, NAFTA ≠ EU.