The North American Free Trade Agreement (NAFTA)

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The North American Free Trade Agreement (NAFTA) was thoroughly reviewed and studied, with the conclusion that it only meets the interests of the United States and Canada (Oliver, 2007). On the other hand, top political leaders in Mexico described it as the primary source of drug violence in the country because it made drug smuggling easier. According to this viewpoint, any nation with basic economic principles and a democratic government that engages in free trade benefits all parties concerned. However, the trade pact between the United States, Canada, and Mexico was accompanied by sluggish economic development and political turmoil. Subsequently, the effects were unemployment, low wages, poverty, and immigration, whereas, the political institutions being corrupt and encouraging crimes such as drug trafficking (Hartman, 2010).

Economically, the report refers to the national statistics that indicated Mexico was sluggishly advancing from poverty as compared to other Latin American countries. Through the poverty statistical analysis, it exhibits that Mexico undergoes a gradual economic development as compared with other Latin Americans country. The statistic shows other Latin American countries advances with about 26 percent while Mexico at about 8 percent (Hartman, 2010). Also, the center of Economic and Policy Research report rated Mexico 18 out of 20 in Latin American countries in growth of real GDP per person. Which was the best way the economist measured the nation’s standard of living, it was analyzed that from 1960 to 1980 the GDP growth was at 98.7 percent in Mexico (Hartman, 2010).Unfortunately, after the NAFTA implementation in the period between 1994 and 2014, the growth reduced rapidly to 18.6 percent (Hartman, 2010).

Moreover, the report revealed that from 1991 to 2007, about 1.9 million jobs were lost in agriculture sector industries. Additionally, about 4.9 million Mexican working in their farms became squatters in their land. As a result immigration of Mexicans from their own country to the United States and also the emergence of agro-export industries. This showed how the labor market in Mexico deteriorated (Hartman, 2010). Similarly, eliminating tariffs on imported corns and programs that support small-scale farmers without controlling U.S subsidized agriculture, led to tremendous change in the Mexican landscape. Further, the government paid 66 percent less for their cones after NAFTA implementation. This led to many abandoning their lucrative jobs for low wages jobs in the United States.

Prior to the year 2000, the Party of Revolutionary Institution (PRI) regime elected the Drug Trade Organization (DTOs) into its corporatist system, for their mutual benefits (Oliver, (2007). This was because the PRI gained firmness through controlling the drug trade by authorizing a small number of DTOs. As a result, the DTOs got benefits from the political power accorded to them and also the exorbitant profits available in the drug trade. In return, the DTOs helped the PRI to remain in power by targeting and suppressing the political opposition, giving rise to a common disease in Mexican political system known as corruption.

Precisely, NAFTA has pervasively hurt the economy of Mexico encouraging the populace to be dependent on drugs while forgoing job opportunities, which relatively leads to decrease per capita income. Similarly, it has affected the government stability by posing several security threats based on actions influence by drug use.


Hartman, S. W. (2010). NAFTA, the Controversy. The International Trade Journal, 25(1), 5-34.

Oliver, R. S. (2007). In the Twelve Years of NAFTA, the Treaty Gave to Me... What, Exactly: An Assessment of Economic, Social, and Political Developments in Mexico since 1994 and Their Impact on Mexican Immigration into the United States. Harv. Latino L. Rev., 10, 53.

November 09, 2022

Economics World



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Free Trade Agreement Mexico

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