Has Neo-Liberalism Failed Mexico?

Sep 26, 2006 J. Bradford DeLong

Six years ago, I was ready to conclude that the North American Free Trade Agreement (NAFTA) was a major success. The key argument in favor of NAFTA had been that it was the most promising road the United States could take to raise the chances for Mexico to become democratic and prosperous, and that the US had both a strong selfish interest and a strong neighborly duty to try to help Mexico develop.

Since NAFTA, Mexican real GDP has grown at 3.6% per year, and exports have boomed, going from 10% of GDP in 1990 and 17% of GDP in 1999 to 28% of GDP today. Next year, Mexico’s real exports will be five times what they were in 1990.

It is here – in the rapid development of export industries and the dramatic rise in export volumes – that NAFTA made the difference. NAFTA guarantees Mexican producers tariff and quota-free access to the US market, the largest consumer market in the world.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

Featured

Xi Jinping’s Vision for Global Governance

Jul 11, 2018 Kevin Rudd
Work in an Age of Automation

Jul 12, 2018 Susan Lund & Eric Hazan
How To Avoid a Trade War

Jul 10, 2018 Dani Rodrik
Time to Untie the ECB’s Hands

Jul 12, 2018 Stefan Gerlach
The Global Economy’s Uncertain Future

Jul 9, 2018 Jim O'Neill

J. Bradford DeLong

Writing for PS since 2002
196 Commentaries

J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.