What Was The North American Free Trade Agreement

Instead, the number of Mexican immigrants more than doubled, again between 1990 and 2000, when it approached 9.2 million. According to Pew, the river has reversed, at least temporarily. Between 2009 and 2014, 140,000 more Mexicans left the United States than they did, probably due to the effects of the financial crisis. One of the reasons NAFTA did not cause the expected reduction in immigration was the peso crisis from 1994 to 1995, which sent the Mexican economy into recession. Another thing is that the reduction of tariffs on Mexican maize has not prompted Mexican corn growers to plant other more lucrative crops. This led them to abandon agriculture. A third point is that the Mexican government has not secured the promised infrastructure investments, which has largely limited the impact of the pact on production in the north of the country. Many analysts explain these differences in results by the fact that the Mexican economy is “two-speed”, where NAFTA has led the growth of foreign investment, high-tech production and wage growth in the industrial north, while the south, largely agricultural, has remained disconnected from this new economy. University of Pennsylvania economist Mauro Guillen argued that Mexico`s growing inequality is due to NAFTA workers receiving much higher wages from trade-related activities in the north. From the beginning, critics of NAFTA feared that the agreement would result in a move of U.S. jobs to Mexico, despite additional NAALCs. NAFTA, for example, has affected thousands of U.S.

auto workers in this way. Many companies have relocated their production to Mexico and other countries where labour costs are lower. However, NAFTA may not be the source of these measures. President Donald Trump`s USMCA should allay those concerns. The White House estimates that the USMCA will create 600,000 jobs and increase the economy by $235 billion. Maquiladoras (Mexican assembly plants that absorb imported components and produce goods for export) have become the emblem of trade in Mexico. They left the United States for Mexico, hence the debate about the loss of American jobs. Revenues in the maquiladora sector had increased by 15.5% since nafta in 1994. [68] Other sectors have also benefited from the free trade agreement and the share of non-cross-border exports to the United States has increased over the past five years [when?], while the share of exports from border states has declined.

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