Mexico now has ninth largest economy in the world
Mexico has had mixed success under the 10-year-old North American Free Trade Agreement (NAFTA), say observers. Foreign investments flooded in to Mexico, rising to an annual average of $12 billion a year over the past decade, three times what India takes in.
The successes of NAFTA have been:
Exports grew threefold, from $52 billion to $161 billion today; Mexico's per capita income rose 24 percent, to just over $4,000, roughly 10 times China's.
Mexico's $594 billion economy is now the ninth largest in the world, up from fifteenth twelve years ago; also Mexico's per capita gross domestic product approaches $6,000.
But a large proportion of Mexicans today believe the sacrifices exceeded the benefits. In an October 2003 survey, only 45 percent of Mexicans said NAFTA had benefited their economy; down from the 68 percent in November 1993.
Mexico's economy will grow by 1.5 percent this year, a poor showing for a developing country; real wages in manufacturing have stagnated.
Mexicans thought globalisation would make them America's workshop; however, the honour now belongs to China, which surpassed Mexico in supplies to the United States.
Mexicans had hoped NAFTA would generate enough jobs to keep them at home; instead, the jobless flock in ever-greater numbers across the borders.
Many experts indicate that Mexico can become an economically advanced nation only if it follows the opportunities afforded it by free trade.
Source: Geri Smith and Cristina Lindblad, A Tale of What Free Trade Can and Cannot Do, BusinessWeek, December 22, 2003.
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FMF Policy Bulletin/ 20 January 2004
Publish date: 28 January 2004
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