Introduction
Regional trade agreement is one in which a group of countries eliminates barriers to international trade and competition on a regional rather than a global scale.
Mexico and NAFTA
Broadly speaking, NAFTA has been good for Mexico. Total two-way trade between Mexico and the United States grew from $81 billion in calendar 1993 to $231 billion in 2002, and Mexico steadily turned a modest trade deficit into a $37 billion trade surplus.
Mexico's exports to all countries grew 80 percent between 1985 and 1993, following its accession to the GATT (General Agreement on Tariffs and Trade, forerunner of the World Trade Organization), and that growth rate has nearly doubled since the inception of NAFTA. Its exports of manufactured products account for nearly 90 percent of total exports, and it's estimated that higher paying (37 percent higher on average) export jobs account for just over one in five jobs in Mexico.
Its annual growth in GDP (gross domestic product) averaged 5.4 percent flora 1996 to 2000, well above the average of 3.9 percent from 1990 to 1994. Most analysts agree that exports were a key factor in accelerating Mexico's recovery from the 1995 financial crisis. GDP growth slowed considerably in 2001 and 2002, due in part to U.S. economic woes, but growth improved in the latter part of 2002.
Mexico's agricultural exports have also benefited from NAFTA. While Mexico has run a consistent annual deficit of around $1.5 billion with the United States, its agricultural exports to the United States have nearly doubled since NAFTA's inception, and were up 9 percent through August 2003 from a year earlier. Freer trade and increased competition have helped provide lower cost inputs for Mexico's livestock and food processing industries. Lower rates of inflation for food products have played a key role in stabilizing.......
