MEXICO
Analysts cite economic growth in Mexico since NAFTA was implemented. Attributing this growth directly to the deal is a fuzzy process, however, and some experts say Mexican growth has underperformed expectations. Since 1994, Mexico's GDP has increased at an average annual rate of 2.7 percent, below the average growth rates of 3.3 percent and 3.6 percent in the United States and Canada, respectively. Mexican exports to the United States have quadrupled since NAFTA's implementation, from $60 billion to $280 billion per year. U.S. exports to Mexico have also increased sharply, more than tripling as Mexico's economy has grown.
US-Mexico trade relations increased, also spurred by NAFTA and Mexican economic growth, despite some fluctuation during Mexican economic dips. Mexico had problems servicing its debt in December 1994, requiring U.S. assistance to stabilize its currency. As a percentage of exports, exports to the United States constituted 78 percent in 1995, 77 percent in 1996, but exports since show a general upward trend. U.S. imports constitute 65 percent of Mexican total imports, and economists expect the trend to grow further under NAFTA. The top 5 U.S. export potentials for goods to Mexico include automotive parts, franchising, chemical production and pollution control equipment, and telecommunications equipment. This shows that the U.S. can benefit while helping Mexico industrialize, and that the auto industry has not disappeared from the United States. Equally important is the inclusion of consumer goods, such as apparel, computers, furniture, and refrigerators within the top 25 potential exports; illustrating that a growing GDP in Mexico will induce consumer goods demand. Except for 1995, when the Peso crisis triggered high inflation, interest rates, and a slowdown in growth, Mexican GDP shows an upward trend.
Despite recent progress, Mexico still needs to reform its economy in order to build structures that will foster achievement of higher standard of living. During the 1995 US-led bailout of the Mexican economy, 12.5 billion dollars in support funds propped up the Peso from a collapse in value.
