The hegemonic cycle and free trade: the US and Mexico

Abstract

Abstract The North American Free Trade Agreement (NAFTA) is a function of the declining hegemony of the US in the world-system. In the relationship between tariff politics and the hegemonic cycle, a core state rising to hegemony progressively favors a free trade doctrine to exercise its comparative advantages in production. During its decline it progressively favors a protectionist doctrine in the face of an increasing loss of market share in international markets. This paper shows that two periods in US-Mexican economic relations portray the US hegemonic cycle in the world-system. The first period corresponds with the initial stages of the upward slope of the US rise to hegemony in the world-system. In the first decade of the 20th century, lowered economic barriers with Mexico were necessary for the acquisition of raw material resource peripheries critical to the economy of a rising core state entering the first stage of hegemonic production in the world market. The second period of lowered economic barriers is partially in evidence at present and projected to mature with the inception of the North American Free Trade Agreement (NAFTA). This period corresponds to the downward slope of the US descent from hegemony in the world-system and is the manifestation of the increasing protectionism of a declining hegemon as the NAFTA primarily represents an economic barrier to other core states. The NAFTA will allow for the procurement of the resources necessary in an attempt by the declining hegemon to maintain faltering comparative advantage in the second stage of hegemonic production. Thus, US economic relations with Mexico manifests the trade policy of the hegemonic cycle.