Mexico’s NAFTA: More Pros than Cons

The document argues that NAFTA has been an empirical success for Mexico, driving substantial growth in trade, foreign direct investment, and industrial diversification, while acknowledging significant socio-economic costs in agriculture and a lack of broad-based wage growth.

• NAFTA is described as an empirical success in terms of trade and investment, with intra-regional trade growing from $289 billion in 1993 to $659 billion in 2000, averaging 13% annual growth.
• The agreement provided Mexico with critical political and financial stability, particularly during the 1995 Tequila Crisis, by granting the country international credibility and encouraging US lenders to extend credit.
• NAFTA facilitated a shift in Mexico's export profile from oil dependency to manufacturing. Oil exports dropped from 70% of total exports in the 1980s to approximately 7% of $160 billion in exports by the time of the report.
• The automotive, electronic, and textile industries saw significant growth; Mexico became the 9th largest automotive producer in 2001 following $10.1 billion in capital inflows since NAFTA's implementation.
• The Maquiladora assembly plants, while employing 5% of the labour force and accounting for 95% of manufactured exports, are criticized for adding little substance to the economy, contributing as little as 3% local content to final products.
• The agreement had detrimental effects on the agricultural sector, specifically maize production, with critics claiming the influx of subsidised US products displaced roughly two million maize farmers.
• Mexico's negotiating position was weakened by a rushed process, a lack of resources in its trade secretariat, and political instability, leading to a failure to secure adequate special and differential treatment (SDT).

APA

White, L. (2004). Mexico’s NAFTA: More Pros than Cons. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/08/tpb4.pdf

Chicago

White, Lyal. Mexico’s NAFTA: More Pros than Cons. South African Institute of International Affairs, 2004. https://saiia.org.za/wp-content/uploads/2010/08/tpb4.pdf.

Wikipedia

{{cite report |last1=White |first1=Lyal |title=Mexico’s NAFTA: More Pros than Cons |publisher=South African Institute of International Affairs |date=January 2004 |url=https://saiia.org.za/wp-content/uploads/2010/08/tpb4.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{white2004mexicos, author = {White, Lyal}, title = {{Mexico’s NAFTA: More Pros than Cons}}, institution = {South African Institute of International Affairs}, year = {2004}, month = jan, url = {https://saiia.org.za/wp-content/uploads/2010/08/tpb4.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }