Trading Difference Between Mexico & Spain

Trading in Mexico.

The Mexican economy in the 1980’s was marked by inflation and had experienced a declining standard of living. Poverty was not the mean reason for Mexico’s economy, the Mexican government in 1982 could not pay their foreign debt obligations caused the economy to decline. “Mexican began to reverse its protectionist stance in the mid-1980s when the government was

forced to declare that it was unable to repay its debts and to default on its loans” (Angeles, 2010). So, “in 1990, Mexico approached the United States with an idea to form a free trade agreement (FTA)” (Angeles, 2010). The purpose of the FTA with the U.S. was to stabilize the economy, promote economic development, create jobs, an increase exports by attracting foreign investments. In January 1984 the North American Free Trade Agreement (NAFTA) went into effect an “upon the implementation of NAFTA, almost 70% of U.S. imports from Mexico and 50% of U.S. exports to Mexico received duty-free treatment” (Angeles, 2010)

Trading in Spain

In the late 1950s, Spain’s foreign investments played an increasingly crucial role in Spain's economic modernization. In the 1960s, Spain’s economic modernization and foreign trade was below average of other major West European countries. Their exports and imports amounted to only 16.5% of the Spanish GDP. This caused a negative trade balance and Spain has not has a positive balance since 1960s. So how would Spain reduce their trade deficits?

Reference

Angeles, Villarreal M. (2010). NAFTA and the Mexican Economy. Retrieved from http://www.fas.org/sgp/crs/row/RL34733.pdf

http://countrystudies.us/spain/70.htm