Effects of the integration of Mexico into NAFTA on trade, industry, employment and economic growth
2003
M.C. Guisan | C. Malacon | P. Exposito
This paper compares the experience of economic development of Mexico with that of some OECD countries (France, Spain and the USA) and Latin American countries (Brazil and Argentina), and analyses the evolution of employment in Mexico taking into account the positive impact that industrial development has in non-agrarian employment and the effects of the integration into NAFTA on trade and industrial development. The paper presents an econometric model to explain non-agrarian employment depending on direct and indirect effects of industrial development, and relates these findings to other studies on the effects of integration.Findings include:although the impact of integration was in many aspects positive, it is clear that it is not enough to foster industrial investment at the level necessary to achieve high rates of non-agrarian employment and development in many Mexican regionsthe problem of the negative evolution of agrarian employment of Mexico during the last years of the 20th century was more due to the consequences of the evolution of international relative prices of agriculture than to the direct effects of the integration into NAFTA, and it was common to other countriesThe paper recommends:promoting industrial investmenta focus on regional and rural developmentincreasing the number of non-agrarian jobs, not only in urban areas but also in rural ones, in order to avoid compulsory emigration and to fight against povertyThe paper concludes that the adoption of these complementary policies would amplify the positive impacts of integration. [adapted from author]
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