North American Free Trade Agreement (NAFTA)

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Mexico relied on the protectionist regime for several decades, and over time, this protectionism created an important system of factories that industrialized the country. But with time, the advantages of protectionism began to disappear and the disadvantages grew in number. It took several crises and money devaluations for the Mexican governments to decide to put an end to the era of protectionism.
In the 70’s, it began to be strongly questioned, and in 1986, the year in which Mexico joined GATT, the era of protectionism was brought to a definite end. (Enrique Lazcano Espinoza, 1999)
The North American Free Trade Agreement (NAFTA) consists of a free trade treaty between Canada, the United States, and Mexico to eliminate most tariffs on trade …show more content…
Mexico had to recover from the oil crisis of 1982 and China was becoming a serious competitor because of its cheap workforce. Mexico was able to access a new big market of consumers. Its exportations started to increase fast and trade became very dynamic in this north American region. It also attracted a lot of foreign companies on the border with the US due to the cheap and accessible workforce and increased industrial integration. Mexico also experienced an increase in wages thanks to the technological progress.

However, NAFTA is said to have brought some problem to the country. When Mexico integrated NAFTA, it experienced an increase in the number of moderate poor and extreme poor people. The same happen with the inequalities between the higher and lower classes of the society.
We could think that the reason is NAFTA but 2 years later, poverty and inequality started to decrease.
We could also think that it is because of economic crisis of 1994 which started in Mexico because of a lack of international reserves and caused the devaluation of the peso. Moreover, we know very little about the effects of economic integration on poverty and …show more content…
With the NAFTA, the US got a bigger influence over Mexico and the other Latin American countries, a bigger market and a cheaper workforce. The commercial opening brought many benefit to Mexico such as more foreign investment, increase in wages, more jobs and built a better business environment. But in order to be more competitive, more instruments of trade should be implemented.
However, NAFTA did not bring all the expected benefits and we can take into account many arguments.
According to the infant argument, Mexico was too different from the US and Canada.
As a developing country and without protecting its agriculture, Mexico had few chance to be competitive against the others countries of NAFTA. Mexico should have signed agreements with other developing countries and not just focused on the bilateral relationship with the US.

In this unequal relationship, the US was using massive agricultural subsidies and used the non-tariff barriers in an unfair way. In other words, the US was putting barriers when Mexico wanted to enter their market even though they had a non-tariff
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