Trade Liberalisation in Mexico: Rhetoric and Reality

Penélope Pacheco-López () and Anthony Thirlwall

Studies in Economics from School of Economics, University of Kent

Abstract: This paper examines the process of trade liberalisation in Mexico, particularly since the mid-1980s and the signing of the NAFTA agreement, and its impact on economic performance. The average growth of GDP of the Mexican economy since liberalisation has been only one-half the rate pre-liberalisation and we attribute this deteriorating performance to a rise in the income elasticity of demand for imports (partly associated with an increase in foreign direct investment with a high import content) which has not been compensated by a sufficiently fast growth of exports, leading to severe balance of payments difficulties. Mexican exchange rate policy has not helped the situation.

Keywords: trade liberalisation; economic growth; balance of payments; foreign direct investment; Mexico; NAFTA (search for similar items in EconPapers)
JEL-codes: C22 F13 F14 F32 F43 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-com, nep-his, nep-ifn and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Trade liberalisation in Mexico: rhetoric and reality (2004)
Journal Article: Trade liberalisation in Mexico: rhetoric and reality (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ukc:ukcedp:0403

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