Free trade areas are able to operate quite successfully even if they lack an overarching authority and full integration of currencies, such as NAFTA.1 Economic homogenisation is not necessarily a good thing. Common currencies are best deployed in Optimal Currency Area, which are areas with sufficiently similar economies that a common currency can successfully function. Problems exist where there is a lack of political capital between nations in a federation or when there are logistical barriers (such as the different languages within the EU or the differing strength of public finances).2 There is no reason why federal states are required for comparative advantage to exist, though economies of scale could be less. 1 Office of the United States Trade Representative, 2004, 'NAFTA: A Decade of Success,' . 2 Wikipedia , 2011, 'Optimal Currency Are