Trade liberalisation in Mexico: rhetoric and reality


  • Pennelope Pacheco-Lopez
  • Anthony P. Thirlwall



Agreement, Exports, GDP, Liberalization, NAFTA, Trade


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.


JEL Codes: F13, F14, F32, O19, O24


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How to Cite

Pacheco-Lopez, P., & Thirlwall, A. P. (2012). Trade liberalisation in Mexico: rhetoric and reality. PSL Quarterly Review, 57(229).