NAFTA at Ten: Unfulfilled Promises in Mexico



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Code : ITW0034B

Year :
2006

Industry : International trade

Region : :Mexico

Teaching Note:Not Available

Structured Assignment : Available

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Abstract: On Jan 1st, 2004, the U.S.A, Canada and Mexico celebrated the completion of 10 years of one of the most controversial trade agreements, NAFTA. The free trade agreement, NAFTA, was to herald a new era of economic growth for the three NAFTA countries, especially Mexico. NAFTA did bring in enormous growth not only to U.S.A and Canada, but also to Mexico by increasing exports and FDI. NAFTA’s appraisal, after a decade, reveals a lot of shortcomings, as against what the free trade supporters claimed. It is argued that Mexico’s economic growth is dependent on the growth of the U.S. economy. A slowdown in the U.S. would result in a subsequent decline in the economic growth of Mexico, as witnessed during 2001. At the same time, many farm livelihoods in Mexico have been destroyed, real wages have decreased and there has been environmental degradation near the U.S.-Mexico border. Analysts feel that economic liberalisation because of NAFTA has been incomplete in Mexico. It is felt that Mexcio requires significant policy and institutional reforms to make NAFTA more effective. Critics feel that NAFTA is an experiment in globalisation, that went wrong and caused irreversible damage to Mexico.

Pedagogical Objectives:

  • To understand the working of a free trade agreement, with special reference to NAFTA
  • To understand the industrial background and economic structure of Mexico
  • To analyse whether the objectives of NAFTA have been achieved
  • To analyse the gains and losses for Mexico due to NAFTA
  • To understand the implications of the complete removal of agricultural tariffs by 2007 on Mexico’s economy.

    Keywords
    NAFTA, International Trade & World Economy Case Study, Mexico, International, Trade, Maquiladora, Exports, FDI, Stability, Agriculture, Local Partnerships, North american, Free Trade Agreement, Tequila Peso, Natural Resources

    Contents :
    » About Mexico
    » Industry and Economy
    » The North American Free Trade Agreement (NAFTA)
    » Effects of NAFTA on Mexico


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