Did NAFTA cause a “giant sucking sound”? |
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Authors: | Willem Thorbecke Christian Eigen-Zucchi |
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Institution: | (1) George Mason University, 22030 Fairfax, VA |
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Abstract: | The North American Free Trade Agreement (NAFTA) passed Congress amidst con-tentious debate in 1993. Detractors argued that
it would produce an exodus of jobs while proponents argued that it would create jobs. We examine the economic effects of NAFTA.
The evidence indicates that while the employment effects have been small, NAFTA has caused an explosion of trade. This increase
in exports and imports has mul-tiplied gains from trade. In addition NAFTA helped Mexico recover quickly from the 1994-1995
peso crisis and provided a political anchor for Mexico's attempts to pri-vatize, deregulate, and liberalize. The resulting
growth and stability in Mexico have benefitted the U.S., which shares a 2,000 mile border with Mexico. |
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Keywords: | |
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