NAFTA’s Impact
Effects on the U.S. and Mexican Economies
Free trade agreements are supposed to enhance the welfare of participating countries, so evaluating their effects is a valuable exercise. The North American Free Trade Agreement (NAFTA) is particularly relevant to the bilateral trade agreements being considered by the United States today because it was the first trade agreement in a nonmultilateral setting between a developing and two developed countries. This report focuses on U.S.-Mexico issues, not because Canada is unimportant, but because the U.S.-Canadian free trade agreement predates NAFTA, is less controversial in the eyes of most trade critics, and is less relevant (because it entails trade between two…
