Essays on Impact of Free Trade in Mexico Case Study

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The paper "Impact of Free Trade in Mexico" is a perfect example of a macro and microeconomics case study.   Economic development (ED) refers to economy progressions, and which can be qualitatively measured. It refers to a general improvement in the standards of living, paradigm shift or transition from economic aspects based on agriculture to industrialization and new (modern) technologies adoption. A country, experiencing economic development is always timely in putting in place the right product, thus gaining huge returns. Globally, all countries face similar challenges of achieving higher living standards, economic growth and financial stability despite their economic development.

There exist various channels that can be embraced to attain these objectives, of which each country has a unique channel following the distinctive political systems and national economies environment. For instance, in the past two decades, China has adopted various unique ingredients contributing to the noticeable high growth rate, which is quite different to that adopted by Malta and Malaysia (IMF, 2008). Globalization refers to opening to the international world economies and being integrated to international business in reference to technological knowledge across international borders, manpower movement, financial inflows, trade, as well as environmental, political and cultural globalization aspects.

Globalization provides a broad scope for authentic worldwide development opportunities for the internal or local markets reaching the wide international business though it has not realized uniform progression. To some nations, globalization is seen as a stepping stone to success while to other nations is seen as a threat to economic development, as it may deprive countries of their internal market sovereignty (World Health Organization, 2016). This essay will focus on various reasons that have seen up and a downturn in economic development in various nations for the last two decades with a key evaluation of international business trade and globalization.   Impact of Free Trade in Mexico Mexico has had strong protectionist policies in trade between the 1930s-1980s with the main objective that this would contribute to independence from a foreign power and subsequently ensure industrialization.

However, this did contribute to deeper levels of poverty in the end following economic fluctuations. Thus, the opening of the national boundaries to free trade has had significant effects on the growth of various nations.

For instance, the North American Free Trade Agreement (NAFTA) affected in 1994 to necessitated bilateral trade between the United States and Mexico has contributed greatly to the economic relationship (Villareal, 2010). Further, the countries have built their bond in other aspects that are not directly linked to investment and trade such as health issues, migration, environmental and security issues. The NAFTA effects on Mexican economic status and Mexico impacts both political and economic interest on the U. S. The desire to create jobs, increase exports, attract foreign investors with the main objective of promoting economic development and stabilizing Mexican economy were the key motivator for the Mexican to enter into FTA with the U. S.

(Villareal, 2010). Mexico is a fertile zone for export with most of its product being exported to the U. S. Mexico’ s exports was 31% of GDP in 2008, which was a 21% increment compared to twenty years ago. Following the implementation of NAFTA free trade, investment and trade barriers were eliminated among its trading partners. For instance, about 50% of Mexico import from the U. S.

and 70% export from Mexico to the U. S. was given duty-free treatment. In reference to World Bank 2005 assessment on the NAFTA economic impacts on Mexico, conclusions were that NAFTA has been a key bridge to Mexico’ s development nearing those of Canada and the U. S. Further, Mexican manufacturers with the NAFTA assistance were able to adopt the technological innovations of the U. S. fast subsequently creating employment opportunities. Also, the general macroeconomics wide variation or volatility in the growth rate of the GDP declined in Mexico since the effect of NAFTA.

In addition, The NAFTA did neutralize the Mexican high sensitivity economic sectors to embrace the U. S. economic developments as well as ensuring higher synchronizing levels of Canada, the U. S. and Mexico business cycles (Villareal, 2010). Despite the NAFTA notable milestone in the Mexican economy, Mexico faces steep competition following high costs in electricity, transportation and other key infrastructures costs in economic development. Besides, the country has a high number of low and uneducated labour-force (Dahlman, 2006).


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