The North American Free Trade Agreement: the limits of integration

Transnational regional arrangements offer a rich new vein to federal theory. If the federal principle is self-rule plus shared rule (Elazar, 1987), these evolving arrangements have potential for shared rule – ‘pooled sovereignty’ (Moravscik, 1993) and effective supranational governance – in ways that the norms of international relations and global governance cannot manage. The North American Free Trade Agreement (NAFTA) does not fit in the category of ‘hybrid states’, but it does exemplify a new regional governance mechanism. As a form of institutionalized integration, it also goes beyond merely ‘free trade’.