Mexico and the USA - A recent history framed by the North American Free Trade Agreement : the borderless economy in a "Neo-Monroeist" order ?

Résumé du document

In 1994, the North American Free Trade Agreement (NAFTA) represented a turning point in the relationship between Mexico and the USA and was considered likely to resolve key bilateral issues. NAFTA was thus a sort of promising frame to achieve the benefits of interdependence in a globalizing world. Nowadays, North America is the largest free trade area in the world in gross product and territory, and no three nations in the world trade as much with each other as do the United States, Canada, and Mexico. The theoretical justification of regional agreements underlines several elements: peace in the area, cooperation between countries, bargaining power, the "dépassement" of the WTO and before the GATT (uncertainty of discussions and of economic sectors at stake), and the promotion of internal reforms. When analyzing the situation in order to assess the effects of the agreement, the problem is, to make the distinction between what would normally take place without NAFTA and the weight of other factors that influence the observed trends, and those that are directly induced by the agreement. In the case of regional agreements, many economists and analysts use what it is called an anti world perspective, thus assessing the trends and evolutions in a scenario without the agreement. In the present paper, we will only try to qualify the observations by highlighting different studies on the actual effects of NAFTA.

Extraits

[...] We saw that such poverty has increased since the 80's but it is important to note that such evolution cannot be entirely attributed to Mexico's membership in NAFTA because wider policy process was implemented in the 80's and 90's. According to Henriques and Patel, “NAFTA is part of a wider constellation of policies and policy changes that affect the rural poor. Mexican trade liberalization was accompanied by national policy revisions that did away with government support programs and, instead, focused on increasing export led-growth” (2005). In Mexico, corn production and consumption are deeply intertwined in the nation's social and cultural fabric and is one of the three traditional elements of Mexican food with beans and chile. [...]

[...] To sum up, NAFTA has had major impacts on Mexico in several areas but it has never lead to the entire integration of the country to North America through social and economic convergence with its trading partners. The actors are actually part of an extremely imbalanced relationship that does not benefit Mexico in the same way it does for the USA and Canada. Obvious improvements have been made in Mexico since 1994, but when compared to the dramatic negative consequences generated, we can wonder if the country did move ahead as it is commonly said. [...]

[...] Source: NAFTAWorks However this surge began prior to NAFTA so, as for all the other observations, the question is to know how much of the effects can be attributed to NAFTA. Different studies actually found that NAFTA had a modest effect on U.S.-Mexico trade growth and estimated that 85% of the U.S. export growth and 91% of U.S. import growth would have occurred without NAFTA. A large part of the trade between the USA and Mexico is actually driven by macroeconomic trends in both countries. [...]

[...] Another aim of such regional agreement is to gain bargaining power. In that perspective, the three countries are looking for more competitive power in the international markets to face the growing competition of the emerging countries such as the BRICs. On March 2005, President Bush, Canadian Prime Minister and President Fox of Mexico met in Texas and announced the Security and Prosperity Partnership of North America (SPP) whose goals were to enhance competitiveness by improving productivity and reducing the costs of trade, and to enhance the quality of life. [...]

[...] From the beginning the North American Free Trade Agreement was likely to generate inequalities among the different countries and inside the countries themselves. The potential losses for Mexico were mainly concentrated in the agricultural sector –mainly targeted small farmers– even if at the time agriculture only accounted for less than 5 percent of the GDP. This issue of winners and losers is extremely relevant when regional agreements are made in such diversified context. In Mexico, the disparities are blatant with a huge discrepancy between large-scale farming and the estimated 6.6 million agricultural workers without land; between the Northern and Southern regions etc. [...]