Nafta from a Mexican Perspective

Expanding NAFTA southwards?

- a Mexican perspective

Implemented in 1994, NAFTA had ambitious goals. It aimed at ameliorating and stabilizing the economies of the three member countries through free trade and a shared set of rules. As the name reveals, it was not meant as a customs union with a common market or supranational institutions, which can arguably be attributed to the liberal orientation of the countries that all are quite reluctant to cede sovereignty. The achievements of NAFTA, so far, have been remarkable in one way or another. Advocates of NAFTA is likely to say that since its implementation, the economic profile of the member countries has improved, and points to the tremendously increased trade within the FTA-region and the rise in, especially, Mexican FDI. On the other hand, critics of NAFTA points to the increased inequality between and within the member states, the much-increased migration (especially into the US), and maybe even the lack of social initiatives embodied in the deal. One can deduce from this dispute that there, as in many other political initiatives, are winning groups; and losing groups. When discussing a potential expansion of the deal to include other Latin American countries, the same problem applies: Who will win, and who will lose? This essay will try to illuminate this issue by taking its point of departure in the “pro’s and con’s” seen from a Mexican perspective.

“Upon implementation [of NAFTA], almost 70% of US imports from Mexico and 50% of US exports to Mexico received duty-free treatment” (Villarreal, 2010), the rest were eliminated over time. In the light of these facts, many economic studies predicted high growth in the US, Canada and Mexico due to strongly increased trade. These predictions has later been confirmed by estimates from the World Bank that show a level of Mexican FDI 40% higher than without NAFTA, and figures showing that Mexico went from a $1.3 billion trade deficit with the US in 1994, to a $84.8...