Nafta in Mexico

Former president of Mexico, Carlos Salinas, used to promise that free trade and foreign investment would help in this country’s development, empowering a richer and more prosperous Mexico. The Mexican economy has slowed down, but Mexico’s growth performance since the inception of NAFTA has been better than it was before the agreement. After 15 years, it seems clear that NAFTA’s promise of broad-based dynamic growth did not come true in Mexico.

Since NAFTA has came effect in 1994, Many American companies came to Mexico to establish their factories because of a pro-business government, a thriving economy, moderate climate, above-average education and good roads. But most importantly is cheap labor in Mexico. For example, now Saltillo has been invaded by Americans again. General Motors, Chrysler and John Deere all have factories here.

We can see the increase in foreign direct investment and domestic investment decreased. There are some reasons for this. Local companies became insolvent because they could not compete with imports. Foreign companies that invested in Mexico did not source from Mexico, and NAFTA’s conditions prevented Mexico from requiring local purchases.

Mexico's agriculture to become huge affected after NAFTA's. Compared with the United States, Mexican farmers do not have high agricultural technology to compete with US. The efficiency of agricultural production is low, prices high. In addition, America's huge agricultural subsidies in agriculture and further makes the situation worse in Mexico. NAFTA came into effect, the United States, China and Canada.

For example, Mexican farmers can not compete in the corn market. Corn from the United States has been dumped on Mexico thirty percent below the market value. To help protecting agriculture in Mexico, Mexican farmers need to be continue to receive an increasing subsidies; instate quotas that limit the amount of US farm products come into Mexico; create training program to help switch famers to...