Nafta Pros And Cons

NAFTA’s implementation brought a great opportunity for Mexico’s economy. During its early days, it was believed that NAFTA would bring rapid growth, raise wages, and reduce emigration. NAFTA resulted in a 11.3% increase in U.S-Mexico trade, which lead to the increase of 10.5% in exports. NAFTA allowed the U.S to become Mexico’s primary market for export at a whopping 77.6%. Although exports and trade increased, Mexican economy did not develop at the rate it was hoped. Between 1993 and 2013 Latin America was going through a major growth. Mexico, however, only saw an annual increment of 1.2% of its per capita income. Along with slow growth, poverty levels have remained unchanged and unemployment rated rose.1 NAFTA has been accused of having a negative impact on the agricultural industry of Mexico. Corn has been the product to suffer the consequences of the agreement. The negative impact is due to NAFTA only taking away tariffs and not limiting subsidies. U.S agricultural policies allow American farmers to sell corn at a cheaper price. Due to competition, it has been estimated that 1.3 million Mexican
Previously mentioned, the net loss of 1.9 million jobs has forced displaced workers to search for better quality of life. To put the matter in a fathomable perspective, “Mexico’s current minimum wage is $4.60 (U.S.) a day. In contrast, the U.S. federal minimum wage is $7.25 per hour, while it is $7.65 in Arizona, $8 in California, $7.50 in New Mexico, and $7.25 in Texas.” Minimum wage in Mexico is low and the lack of employment pushes worker to migrate north. Mexico’s central bank has stated that migrant workers have sent roughly $22.7 billion. If a limitation on subsidies existed, then migrant worker would not find the need to leave Mexico. In addition, Mexican farms would have the possibility of fair competition and growth, which could result in the $22.7 billion being generated in