North American Monetary Union
. The benefit of NAFTA is evident through the rising of living standard and economic growth in the three countries (Foreign Affairs and International Trade Canada) . The successful launch of the Euro monetary union in 1999 has raised wonders if monetary union was possible in North America . The members of the Euro Monetary Union removed their national currencies and adopted the new Euro currency . The use of the common currency of Euro has eliminated the risk of exchange rate and has eliminated the pervious hedging cost incurred by businesses . The lowered transaction cost has strengthened each country’s ability to specialize which promoted integration between the countries that belongs to the Euro monetary union . The theory of having a North American Monetary Union was thought to foster similar changes in North America while assisting the benefits NAFTA has already created; NAFTA increased the trading activities, lowered the cost of tariffs between Canada, United States, and Mexico . Having a single North American currency would further decrease the trading cost among North American countries . According to the theory of North American monetary union, the conversion of existing currencies into the single currency will take place at rates that leave unchanged each country's real income, wealth, and international competitiveness at the time of conversion (The Fraser Institute) . There will be a greater price stability and increase in trade among the members of the union due to the elimination of the costs of currency trading and risk (The Fraser Institute) .