Effects of NAFTA on Mexico
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The North American Free Trade Agreement of 1994's effects on Mexico have long been overshadowed by the debate on the Agreement's effects on the economy of the United States. As a kind partner in the agreement, the effects that NAFTA has had on the Mexican economy is essential to understanding NAFTA on a whole. A key factor in this discussion is the way the Agreement was presented to Mexico; namely, that it would increase development of the Mexican economy by providing more middle class jobs that would enable more Mexicans to lift themselves out of the lower classes. Thus, wages, employment, attitudes, and migration all present essential areas of analyses to understand effects NAFTA has had on the Mexican economy.
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Overall, NAFTA has not met the expectations promised during its negotiation. Economic growth has been steady at around two percent, but that growth is far from the growth the deal was supposed to bring. NAFTA initially decreased employment, and wages have largely remained static over the years that NAFTA has been in place. Mexicans overall have a critical view towards the trade deal, but are generally opposed to a complete repeal of the law.
In 2020, NAFTA was officially replaced by the United States–Mexico–Canada Agreement (USMCA). USMCA was originally initiated by former US president Donald Trump to remedy perceived imbalanced in NAFTA that disadvantaged the US. However, the finalized of USMCA differs very little from NAFTA, and is not expected to make a significant change in the economy.[1]