Author: Bharathi S. Gopal

Publisher:

Published: 2006

Total Pages: 26

ISBN-13:

On Jan 1st, 2004, the U.S.A, Canada and Mexico celebrated the completion of 10 years of one of the most controversial trade agreements, NAFTA. The free trade agreement, NAFTA, was to herald a new era of economic growth for the three NAFTA countries, especially Mexico. NAFTA did bring in enormous growth not only to U.S.A and Canada, but also to Mexico by increasing exports and FDI. NAFTA's appraisal, after a decade, reveals a lot of shortcomings, as against what the free trade supporters claimed. It is argued that Mexico's economic growth is dependent on the growth of the U.S. economy. A slowdown in the U.S. would result in a subsequent decline in the economic growth of Mexico, as witnessed during 2001. At the same time, many farm livelihoods in Mexico have been destroyed, real wages have decreased and there has been environmental degradation near the U.S.-Mexico border. Analysts feel that economic liberalisation because of NAFTA has been incomplete in Mexico. It is felt that Mexcio requires significant policy and institutional reforms to make NAFTA more effective. Critics feel that NAFTA is an experiment in globalisation, that went wrong and caused irreversible damage to Mexico.