Foundations
The vision on the main page rests on a specific proposal and on decades of research. This page sets out the argument, the evidence for each claim, the hardest objections, and every source.
01 · The argument
Each step rests on evidence further down this page. Follow the chain, or jump to the step you doubt.
Some car parts cross the border seven or eight times, and each dollar Mexico exports to the United States carries about 40 cents of U.S. content. Thirty years of free trade cannot be unscrambled.
EvidenceE1E2On the vision page
To cross duty-free, goods must prove they are North American. Customs agencies charge 1–3% of invoice value, and the content rule for cars has climbed from 50% to 75%.
EvidenceE3On the vision page
In 2026 the same Chinese electric car pays 102.5% in the United States, 50% in Mexico and 6.1% within Canada’s quota. Rules of origin have to police every gap.
EvidenceE4On the vision page
With one outside tariff, origin no longer matters within the region: no certificates, no customs for goods. Theory and trade law agree it can leave members and outsiders better off.
EvidenceE5On the vision page
North America buys 30–50% of what its machinery and vehicle suppliers export. A buyer that large can lower the prices it pays.
EvidenceE6On the vision page
National agencies under mirror laws, five stages and no new bureaucracy, in a region whose workforce grows while China’s and Europe’s shrink. Mexico’s own reforms remain the condition.
EvidenceE7E8E9E10On the vision page
02 · The proposal
In March 2025, Pedro Noyola and Jaime Serra published “A Case for a North American Common Tariff” with the Wilson Center’s Mexico Institute. They review three decades of integration, explain why the move from NAFTA to the USMCA missed a chance to improve the model, and propose turning the free trade area into a customs union. In their own words:
“We propose that North America adopt a common tariff as an anchor for the natural evolution of the free trade area to a customs union.”
“The rules of origin threaten to become a protectionist vortex, a permanent source of trade diversion and net social loss.”
“A common tariff would eliminate origin certification and customs operations for intraregional trade.”
“A customs union with a common tariff would contribute more effectively than the USMCA to help keep North America as the most productive region of the world.”
Read the paper at the Wilson Center ↗
Economist (PhD, Yale University). As Mexico’s Secretary of Commerce and Industrial Development (1988–1994) he led Mexico’s negotiation of NAFTA, and later served as Secretary of Finance. He is the founder and chairman of SAI Law & Economics.
Economist. He has worked with Jaime Serra on regional trade since the 1990s, including the 1997 report on regional trade agreements cited in the proposal, and is co-author of Modernidad y economía (1999).
03 · A lineage of ideas
A North American customs union is not a new idea. It builds on the founding theory of customs unions and on a series of proposals from all three countries.
Introduces the test still used to grade trade agreements: do they create trade, or divert it from more efficient outside suppliers?
Describes integration as a ladder: free trade area, customs union, common market, economic union.
The region chooses a free trade area. Mexico still had high and dispersed tariffs, so a common tariff would have disrupted its production chains.
Reflections on Regionalism (Carnegie Endowment) sets three rules for agreements that create trade: respect GATT Article XXIV, treat outside investment without discrimination, and keep effective dispute settlement.
Toward a North American Community argues for deepening NAFTA, drawing lessons from Europe’s integration.
The C.D. Howe Institute’s framework for shaping a shared North American economic space.
Co-chaired by John Manley, Pedro Aspe and William Weld: a community whose boundaries “would be defined by a common external tariff and an outer security perimeter,” with the tariff negotiated sector by sector at the lowest rate consistent with multilateral obligations.
El TLC y la formación de una región (FCE) documents how two decades of NAFTA built a region that produces together, and closes by asking whether the next step is a customs union.
A common tariff as the anchor for a customs union, with a staged plan, a revenue formula and institutions that avoid supranational bodies.
04 · The evidence
Ten claims, in the order of the argument. Each source is marked by kind, so you can see what rests on theory, on studies, on official data or on policy.
E1
North American trade is not just exchange between separate economies but production shared across borders.
40¢of U.S. content in each dollar Mexico exports to the United States
On the vision page04 · Built in North AmericaE2
After a generation of free trade, the three economies produce together so closely that separating them would cost more than integrating further.
7–8×border crossings for some car parts before final assembly
On the vision pageThe scrambled egg theoremE3
Proving origin costs firms money, and origin thresholds tend to rise over time, diverting trade.
50% → 75%regional content a car needs to cross duty-free, 1989 to 2023
On the vision page03 · One perimeterE4
Without a common tariff, each country sets its own policy toward the same outside supplier, and origin rules must police the gaps.
3different tariffs on the same Chinese electric car in 2026: 102.5%, 50% and 6.1%
On the vision page02 · The common tariffE5
A customs union removes the need for rules of origin and, if its common tariff is set well, can benefit its members without hurting the rest of the world.
0certificates of origin needed for trade inside a customs union
On the vision page01 · The union at a glanceE6
When a region’s demand moves world prices, a calibrated tariff can lower import prices and raise its welfare.
30–50%of their suppliers’ exports: North America’s purchases of machinery and vehicles
On the vision page02 · The common tariffE7
A customs union can run on coordinated national institutions rather than a new bureaucracy.
5stages, each run by existing national agencies under mirror laws
On the vision page08 · How we get thereE8
Combined, the three populations keep a growing workforce while rival economies shrink.
+5.3%North America’s working-age population, 2025–2050; China −25.3%, EU −17.0%
On the vision page05 · The demographic advantageE9
People move more, and integrate more easily, where language and culture are shared.
43Mpeople in the United States speak Spanish at home
On the vision page06 · Neighbors alreadyE10
The benefits of integration depend on domestic reforms, especially in Mexico.
−0.5%average yearly change in Mexico’s total factor productivity in the decades after NAFTA
On the vision page09 · Questions05 · Open questions
A customs union asks more of each country than a free trade area does. These are the strongest reasons to doubt it, and the replies.
The objection
Since 2025 the United States has raised tariffs on its own partners, and in the July 2026 joint review it declined to extend the USMCA, which now faces annual reviews. A common tariff means setting outside tariffs together.
The answer
Start where rates are already the same: 40.6% of U.S. and Mexican tariff lines, covering 61% of U.S. imports. Add the rest in stages, so each annual review can lock in a step instead of reopening the agreement.
USMCA joint review (July 2026) · Noyola & Serra (2025)
The objection
Mexico’s Economy Secretary has said a customs union is “not in the spirit of the United States.”
The answer
The proposal builds on the “tariff unification” actions Mexico’s own government has put forward since 2024, and its first stage covers only lines where the countries already agree.
Opportimes · Noyola & Serra (2025)
The objection
A customs union can push buyers away from efficient outside suppliers toward costlier ones inside the bloc.
The answer
The common rate converges to the lowest current rate, and GATT Article XXIV requires the union, on the whole, to be no more closed than before. A common tariff can be set so that no member and no outsider is worse off.
Viner (1950) · Kemp & Wan (1976) · GATT Art. XXIV
The objection
Today each country keeps the duties it collects. One tariff means one pool, and a fight over how to split it.
The answer
A two-part formula: a share for the country where goods arrive, the rest by each country’s contribution to regional trade. The EU and the Southern African Customs Union already share revenue this way.
Noyola & Serra (2025) · EU · SACU
The objection
Farm trade is where each country protects most, and where import quotas differ most.
The answer
One duty for each product, with the three countries’ import quotas pooled and auctioned among importers across the region.
Noyola & Serra (2025)
The objection
In the decades after NAFTA, Mexico’s total factor productivity fell 0.5% a year, held back by informality, weak competition and legal uncertainty.
The answer
The union is an anchor for reform, not a substitute: it comes with a gradual end to the special export regime, stronger competition policy and independent institutions.
Levy & López-Calva (2023) · Noyola & Serra (2025)
06 · Fact sheet
Each figure with its value and source. Search, filter by section, or download the table.
| Section | Figure | Value | Source |
|---|
07 · Data & methods
Rates are most-favored-nation duties for countries without a trade agreement: U.S. Harmonized Tariff Schedule (T-shirts 16.5%, cars 2.5%, light trucks 25%); Canada’s Customs Tariff (vehicles 6.1%, apparel 18%); Mexico’s import-tariff law as reformed on Dec. 29, 2025 (light vehicles 50%, apparel 35%). Computers and phones are duty-free in all three. Averages are WTO simple MFN averages (Canada and U.S. 2025, Mexico 2026). Temporary additional duties imposed since 2025 are excluded. Common rates follow the rules shown and are illustrative.
UN World Population Prospects 2024, medium variant, single-year ages (wpp2024 data package). North America is the sum of Canada, the U.S. and Mexico; the EU is its 27 members. Working age is 15–64. Median ages are interpolated from single-year distributions.
U.S. Census Bureau, top trading partners 2024. U.S. Commerce Department, imports by source 2023. U.S. Energy Information Administration: Canada’s share of U.S. crude imports (2023) and pipeline gas exports to Mexico (2024).
INEGI 2020 census (religion; U.S.-born residents). Pew Research Center Religious Landscape Study 2023–24 and Mexican-origin population (2021). Statistics Canada 2021 census. American Community Survey 2023 (Spanish spoken at home).
Nominal GDP in current U.S. dollars for 2024, rounded, from IMF and national accounts: North America about $33 trillion (roughly 30% of world output), the EU and China about $19 trillion each.
Charts from Serra Puche (2015) were rebuilt with the latest data: non-oil exports from INEGI’s merchandise trade balance (2025: $643.6 billion, divided by 365 days); foreign direct investment from the Secretaría de Economía (2025: $40.9 billion, a record); trade openness from the World Bank (exports plus imports, 74% of GDP in 2024); workforce projections from UN WPP 2024. His charts of U.S. content in Mexican exports (2004) and of business-cycle correlation (1981–2013) were not reproduced for lack of comparable recent data.
Rules of origin: USMCA Chapter 4 and the Congressional Research Service. Use of USMCA preferences: Federal Reserve Bank of Dallas (August 2026) and USTR’s 2026 Autos Report to Congress. Electric-vehicle tariffs: USTR’s Section 301 review (2024), the Government of Canada (2024 surtax, 2026 quota) and Mexico’s 2025 tariff reform. Shipping: Drewry World Container Index, Shanghai–New York, October 22, 2026.
Illustrative: the three eggs are drawn the same size, and the dots and lines do not stand for quantities. The figures beside it are sourced. U.S. goods trade (exports plus imports): Mexico $81.5 billion and Canada $211.7 billion in 1993; Mexico $837.6 billion and Canada $762.4 billion in 2024 (U.S. Census Bureau). Parts crossing borders: CRS IF11387 (2021). U.S. content in Mexican exports: Koopman, Wang & Wei (2014). USMCA claims: Federal Reserve Bank of Dallas (2026).
Natural Earth boundaries (1:50m) in a conic equal-area projection. Internal borders shown dashed remain borders for people; the proposal removes customs only for goods.
The site is open source. The scripts that rebuild the map and the population figures, the generated data and the full source list are public.
08 · Bibliography
How to cite this page