Summary
Judging the effects of the North American Free Trade Agreement (NAFTA) ten years after its inception is far from an empirical exercise. Parsing which factors have been responsible for various economic phenomenon is subject to interpretation. And to make the analysis particularly complicated, another major event took place in Mexico in 1994, the year NAFTA was put in place - a peso devaluation that buffeted the Mexican financial sector.
For the United States, the impact of NAFTA appears to be mixed. Although U.S. employment grew by more than 20 million jobs between 1993 and 2000, America's trade deficit with NAFTA countries grew from about $9 billion in 1993 to $87 billion in 2002. With an economy the size of the United States' ($11 trillion), gauging the impact of NAFTA, with its $620 billion in total trade, is subject to much conjecture. In and of itself, NAFTA wasn't expected to affect the United States significantly, (giant sucking sound predictions not withstanding). Trade in the aggregate would be a different story, though.See the full content of this document
Extract
Nafta at 10
To a large degree, therefore, the ultimate barometer of the effects of NAFTA is the impact the trade agreement has had in Mexico, with the smallest economy. A clo...
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