NAFTA’s Economic Effects on Mexico

Since 1994, the Mexican economy has experienced higher growth than in previous years, coinciding with a significant surge in foreign investment and trade, commonly viewed as resulting from NAFTA. The purpose of this study is to identify the effects of this preferential trade agreement, during its first six years of implementation, on some key economic variables and to determine whether the originally predicted benefits are in fact arising. • Economic Research Department, Av. Universidad 1200, Col. Xoco, Mexico City C.P. 03339, Mexico. We acknowledge suggestions from the participants at the NBER 12th Annual Interamerican Seminar on Economics, Buenos Aires, December 2-4, 1999. The opinions expressed in this paper are the responsibility of the authors and not necessarily those of Grupo Financiero Bancomer. We thank Javier Morales for his assistance.