Trade policy in Mexico

Abstract

This paper provides an evaluation of the trade policies applied in Mexico in the last quarter century (1956–1982). It examines the policies in three well-defined periods: (1) 1956–1971, considered to be a period of relative stability following the rapid inflation and devaluations of the first post-war decade, though characterized by increasing overvaluation of the peso; (2) March 1972–December 1976, beginning with the acceleration of government spending under President Echeverria and ending with the devaluations of the peso; (3) December 1976–December 1982, covering the Presidency of José López Portillo. For each period, the author discusses macroeconomic policy, trade policy developments and changes in Mexican exports and imports and their contribution to industrial growth. Having demonstrated the interdependence of macroeconomic and trade policies, the paper concludes with recommendations for policy reform, e.g. for remedying macroeconomic disequilibria, reducing price distortions and reforming trade policy, with a view to moving towards an outward-oriented development strategy in Mexico.