Is NAFTA really advantageous for Mexico?

Abstract

ABSTRACTThis article suggests that the much trumpeted US trade deficit with Mexico is only an accounting matter concealing the real story behind the transactions between these two countries and Canada. The statistical exercise performed here shows that the deficit has not made Mexico a net winner from NAFTA. On the contrary, Mexico has had a progressive deterioration of its competitiveness with respect to its exports. The deficit in a trading scheme such as NAFTA is especially healthy for the US because it reflects the proper functioning of the intra-industry trade that is performed by its big companies.