Journal
“Trade Liberalisation in Mexico: Rhetoric and Reality” (2004), co-author A.P. Thirlwall, Banca Nazionale del Lavoro Quarterly Review, 229, June: 141-167.
Abstract/Resumen
Abstract
Trade liberalisation in Mexico started in a significant way in 1985/86, and was consolidated by the NAFTA agreement 1994. Mexico was expected to benefit in terms of increased export growth, employment, real wages, and above all, a faster rate of economic growth. In practice, there has been a divorce between rhetoric and reality. The growth of GDP post-liberalisation has been only one-half that pre-liberalisation. This paper gives three explanations. Firstly, export growth has hardly changed. Secondly, there has been a sharp increase in the propensity to import (partly related to US direct foreign investment) which has reduced the growth of GDP consistent with a sustainable balance of payments equilibrium on current account. Thirdly, liberalisation has been used as a substitute for a development strategy.
Key words/Palabras clave
Latin America, Mexico, Trade Liberalisation, Exports, Imports, Balance of Payments