NCPA - National Center for Policy Analysis

NAFTA Benefits Tangible

December 11, 2002

Ten years after one of the first battles over economic globalization, foes of the North American Free Trade Agreement turn out to have been mostly wrong. What's more, NAFTA's real significance probably goes beyond economics now. The agreement launched an era of economic, political and social intimacy between the United States and Mexico.

  • NAFTA has been a bonanza for some companies since it took effect. The automotive sector has taken the lead in squeezing benefits out of cross-border integration.
  • Mexico is now a key country in the global supply chains of such giants as General Motors Corp., Ford Motor Co. and Delphi Corp. -- and Mexican automotive companies such as Sanluis Corporación SA and Grupo Desc SA have also profited.
  • Mexico is the largest foreign market for Dallas-based corporate giants such as Mary Kay Inc., as well as for Texas companies such as Home Interiors and Gifts Inc.
  • A Mexican tycoon, Carlos Slim, controls Dallas-based CompUSA, while Grupo Bimbo SA, which is based in Mexico City, owns Mrs. Baird's Bread and a host of other bread brands throughout the Western United States.
  • U.S. exports to Mexico grew from $45.29 billion in 1993 to $113.77 billion in 2001. Mexican exports to the United States rose from $42.85 billion to $140.3 billion in the same period.

Still, NAFTA has failed to help Mexico create enough opportunities for Mexicans to stay at home. More than 1 million Mexicans join that nation's labor force every year.

Analysts reckon that about 300,000 Mexicans migrated to the United States each year during the last decade in search of higher wages than they could earn on farms and in maquiladoras, or assembly-for-export plants, back home.

Source: Brendan M. Case and Alfredo Corchado, "The Real NAFTA Yields Mixed Bag," The Dallas Morning News, December 9, 2002.


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