How NAFTA Explains the Two Mexicos

NAFTA coincided with a wider period of change for Mexico as the country sought to rebuild after its infamous “Lost Decade.”

These changes have fundamentally transformed Mexico. Exports have grown by more than 500 percent since 1993 thanks to growth in manufacturing. Mexican universities are increasingly producing high-skilled workers while firms in the aerospace, tech, and the financial industry, are innovating at a rapid clip. The country’s middle class grew by 11 percent between 2000 and 2010. Meanwhile, NAFTA’s integrated legal framework, which strengthened property rights and dispute mechanisms, has enhanced the rule of law in a private sector long hamstrung by political interference. “This has been one of the most understated achievements of NAFTA,” Valeria Moy, an economist at the Autonomous Technological Institute of Mexico, told me. “The market has helped usher in changes that the Mexican government couldn’t.”

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