NCPA - National Center for Policy Analysis

NAFTA Not So Perfect in Mexico's Eyes

January 14, 2004

Mexico has had mixed success under the 10-year-old North American Free Trade Agreement (NAFTA), say observers.

The successes of NAFTA have been:

  • Foreign investments flooded in to Mexico, rising to an annual average of $12 billion a year over the past decade, three times what India takes in.
  • Exports grew threefold, from $52 billion to $161 billion today; Mexico's per capital income rose 24 percent, to just over $4,000, roughly 10 times China's.
  • Mexico's $594 billion economy is now the ninth largest in the world, up from fifteenth twelve years ago; also Mexico's per capita gross domestic product approaches $6,000.
  • Mexico's economy will grow by 1.5 percent this year, a poor showing for a developing country; real wages in manufacturing have stagnated.
  • Mexicans thought globalization would make them America's workshop; however, the honor now belongs to China, which surpassed Mexico in supplies to the United States.
  • Mexicans had hoped NAFTA would generate enough jobs to keep them at home; instead, the jobless flock in ever-greater numbers across the borders.

Many experts indicate that Mexico can become an economically advanced nation only if it follows the opportunities afforded it by free trade.

Source: Geri Smith and Cristina Lindblad, "A Tale of What Free Trade Can and Cannot Do," BusinessWeek, December 22, 2003.

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http://www.businessweek.com/magazine/content/03_51/b3863008.htm

 

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