The North American Free Trade Agreement is an agreement between Mexico, Canada and the USA, which is based on the principles of the European Union. It was established in January 1, 1994 and has the purpose to lower trading barriers as much as possible to reach a more fluent international trade, which means more gains from trade for each of the countries. Even though the three countries are neighbors it is remarkable that two first world countries and the third e.g. second world country, Mexico, are responsive to such a close agreement. One wonders how the interaction between those countries works. Indicators for poverty in Mexico are for example that in 2002 half of the population in Mexico was living in poverty and one fifth in extreme poverty. As we can see by taking a closer look to their GDP as an indicator for their financial and economic situations we recognize large differences between the two richer countries and Mexico, which of course does not belong to the poorest of the poor but still does not take in one of the first places in the world rank. [...]
Table of Contents
1. Mexico as a NAFTA member
1.1 NAFTA’s influence on Mexico’s agriculture
1.2 NAFTA’s influence on Mexico’s industry
1.3 Conclusion
2. Mexico’s position on
3. Mexico’s position on
4. Conclusion: Multilateralism vs. Bilateralism
Research Objectives and Core Themes
The primary objective of this essay is to evaluate the impact of the North American Free Trade Agreement (NAFTA) on Mexico’s economic situation, specifically focusing on the agricultural and industrial sectors, while assessing the efficacy of multilateral versus bilateral trade strategies in the context of Mexico's global trade relations.
- Economic impact of NAFTA on Mexican agriculture and rural labor
- Industrial shifts and the role of the Maquiladora sector
- Mexico’s strategic participation in the Free Trade Area of the Americas (FTAA)
- Mexico’s engagement in the WTO Doha Round negotiations
- Comparative analysis of Multilateralism versus Bilateralism for developing economies
Excerpt from the Book
1.1 NAFTA’s influence on Mexico’s agriculture
The more developed the country the less important is agriculture for the economy. In high developed countries as in the example of the USA agriculture contributes in average 2% to the GDP. In Mexico’s case agriculture makes up 8% of the Gross Domestic Product (GDP) and employs 22 %of the labor force, which makes this sector very influential.
Exports from the USA to Mexico amount to 12 % of all US American agricultural exports whereas Mexico exports to the US $4.7 billion. This makes up 60% of all agricultural exports for Mexico. Only 12% of Mexico’s land is arable while the US has 19 percent of arable area.
Those numbers show us how much each country is depending in the agricultural sector. Agriculture still plays an important role for Mexico’s economy and due to the large working force a large part of the population lives on it.
Shortly after NAFTA entered into force the employment in agriculture in Mexico started to reduce constantly. In 1993 there were 8.1 million Mexicans employed in the agricultural sector; in 2004 6.8 million were working in this area. The percentage of population that was engaged in the agricultural sector withered from 1991 between 2004 at about 10 %.
Summary of Chapters
1. Mexico as a NAFTA member: This chapter provides an overview of the NAFTA agreement and introduces the economic discrepancies between Mexico and its North American partners.
1.1 NAFTA’s influence on Mexico’s agriculture: This section details the negative impacts of trade liberalization on Mexican agricultural employment and the challenges posed by US agricultural subsidies.
1.2 NAFTA’s influence on Mexico’s industry: This section examines the transition of Mexico's industrial focus toward manufacturing and the specific role of Maquiladoras within the export sector.
1.3 Conclusion: This summary highlights that while NAFTA boosted export performance, it also resulted in a dangerous economic dependence on the US market and a lack of domestic innovation.
2. Mexico’s position on: This chapter analyzes Mexico’s involvement and strategic stance regarding the proposed Free Trade Area of the Americas (FTAA).
3. Mexico’s position on: This chapter discusses Mexico’s participation in the WTO Doha Round and its identification with the interests of other developing nations.
4. Conclusion: Multilateralism vs. Bilateralism: The final chapter weighs the benefits of multilateral trade strategies against the limitations of bilateralism for Mexico’s long-term development.
Keywords
NAFTA, Mexico, Agriculture, Industry, Maquiladora, FTAA, WTO, Doha Round, Multilateralism, Bilateralism, Trade Liberalization, GDP, Export, Subsidies, Economic Development
Frequently Asked Questions
What is the core focus of this publication?
This essay explores Mexico's foreign trade affairs, specifically evaluating how trade agreements like NAFTA have impacted its domestic sectors and how Mexico positions itself in global trade negotiations.
What are the central thematic areas?
The work centers on agricultural displacement, industrial manufacturing growth, the reliance on US markets, and the strategic differences between multilateral and bilateral trade frameworks.
What is the primary research goal?
The aim is to determine if trade liberalization under NAFTA has actually improved Mexico’s economic situation or if it has created an unhealthy dependency on a single trading partner.
Which scientific methodology is applied?
The author utilizes an analytical approach, examining economic indicators such as GDP, trade volume data, and labor market statistics to assess the outcomes of international trade agreements.
What does the main body cover?
The main body investigates specific sectors—agriculture and industry—before analyzing Mexico's tactical involvement in the FTAA and the WTO Doha Round.
What are the primary keywords associated with this text?
Key terms include NAFTA, Mexico, Multilateralism, Bilateralism, Maquiladoras, Agricultural subsidies, and the Doha Round.
How did the corn producers fare under NAFTA?
According to the text, corn producers were among the hardest hit, with over one million jobs lost between 1991 and 2000 due to low trading barriers and competition from subsidized US crops.
Why does the author argue that Multilateralism is preferable to Bilateralism for Mexico?
The author argues that while bilateralism creates dependency on a single power, multilateralism offers broader opportunities, access to diverse markets, and a more egalitarian framework for developing nations.
- Quote paper
- Gerda Frentz (Author), 2006, Mexico's trade Affairs, NAFTA, FTAA, Doha Round, Munich, GRIN Verlag, https://www.grin.com/document/69676
