theeuroamericansinglecurrencyfreetradearea.docVIP

The EuroAmerican Single Currency Free Trade Area Back in 1998 before the Euro replaced twelve currencies and could soon replace another dozen, I made a proposal that the Euro and the Dollar should be linked at par with one another to create a “Eurodollar”, providing a single currency for both Europe and the United States. This response to this bold proposal has been less than overwhelming, even though the logic of the proposal remains as valid in 2003 as it did in 1998. Now that five years have passed since this suggestion, it is time to move to the next level—not only should Europe and the United States link their currencies together, but they should also eliminate all trade barriers between the United States and the European Economic Community. The result would be a Single Currency Free Trade Area (SCFTA) that would be shared between the United States and Europe. We believe that history and economics all point toward the benefit of moving toward a EuroAmerican SCFTA; however, there has been virtually no discussion of this, nor has there been any effort to achieve this goal. Unfortunately, in the past four years since the Euro was introduced, international economic integration has not been at the top of anyone’s agenda. Economists learned long ago that politics and not economic logic determine the timing of monumental economic changes, and no politician has seen any benefit from pursuing this goal. Of course, this is nothing new. As Austin and Vidal-Naquet noted concerning ancient Greece, “In the history of Greek cities coinage was always first and foremost a civic emblem. To strike coins with the badge of the city was to proclaim one’s political independence.” (Austin and Vidal-Naquet, Economic and Social History of Ancient Greece, London: 1977, p. 57) Of course, Adam Smith argued in favor of free trade back in 1776, and economists have been arguing in favor of free trade ever since. Yet, despite the fact that millions of people in every country on the plane