Twenty years since NAFTA: Mexico could have done worse, but it’s not clear how

Real-World Economics Review Blog

from Mark Weisbrot

It was 20 years ago that the North American Free Trade Agreement (NAFTA) between the U.S., Canada, and Mexico was implemented. Here in Washington, D.C., the date coincided with an outbreak of the bacteria cryptosporidium in the city’s water supply, with residents having to boil their water before drinking it. The joke in town was, “See what happens, NAFTA takes effect and you can’t drink the water here.”

Our neglected infrastructure aside, it is easy to see that NAFTA was a bad deal [PDF] for most Americans. The promised trade surpluses with Mexico turned out to be deficits, some hundreds of thousands of jobs were lost, and there was downward pressure on U.S. wages – which was, after all, the purpose of the agreement. This was not like the European Union’s (pre-eurozone) economic integration, which allocated hundreds of billions of dollars of development aid to the poorer…

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