The Socio - Economic Impacts of NAFTA in Tlaxcala , Mexico

NAFTA has impacted farm commodity prices and labor allocations in Mexico. This study takes a close look at a rural/industrial region (Tlaxcala) in Mexico where the growth of post-NAFTA industrial employment opportunities has impacted the rural population and the agricultural economy. Through personal interviews and surveys, the impact of NAFTA on the interaction between agricultural and industrial sectors at the regional and household levels is examined. Introduction and Objectives The North American Free Trade Agreement (NAFTA), which was signed in December of 1992 and went into effect in 1994, is the most extensive free trade agreement short of a common market ever negotiated and is unique in its inclusion of both developing (Mexico) and industrial (Canada and U.S.) nations. This agreement is the first of its kind between nations with such extensive cultural, social and economic differences, and many fears have been expressed on the part of all countries involved as to the outcome of this integration. In particular, Mexico has feared that its small proprietorships, manufacturers, and agriculturists will be unable to compete against the large American and Canadian firms with their seemingly unlimited access to capital and ability to exploit existing economies of scale (Barajas, 1993). i This study was partially funded from a grant from the Ford Foundation and Midamerica International Agicultural Consortium. The authors would like to acknowledge significant participation and contribution from Professors Emma Zepata Martelo and Veronica Vasquez Garcia from the department of rural development of Colegio de Postgraduados. However, the views expressed here are those of the authors and do not necessarily reflect those of the other contributing individuals or organizations.