Currency Union should be on the table, too.

Trade is exchange, and the medium of exchange is generally currency. Foreign exchange is the currency of international trade, so the absence of this integral medium in the proposals to integrate the North American community presented by the Council on Foreign Relations seems a gross oversight. How can we manage harmonization effectively in a trinational agreement on trade and security if the costs and barriers of currency exchange remain in effect?

For a country like Canada exchange costs on merchandise trade with the United States and Mexico might amount to several billion dollars a year (see Fraser Institute's "Case for the Amero"). Add to that the considerable currency costs on capital flows and monetary policies and it is not an overstatement that the "static costs" of multiple North American currencies are a considerable drag on the economic integration of the continent. Indeed, a monetary union of North America would facilitate even greater economic growth by eliminating the inefficiency bias of exchange rate mechanisms, imposing discipline on industries that currently hide poor productivity under the cloak of currency depreciation.

There are many issues related to a currency union, and the process of adjustment would certainly change the scope of monetary and fiscal "sovereignty" currently exercised in Canada and Mexico. But the benefits of union and economic integration would catapult our economic well-being. The political obstacles of getting to that point remain considerable.