•  
  •  
 

Journal of Undergraduate Research

Keywords

NAFTA, free trade, US and Mexico apparel trade, GDP

College

Family, Home, and Social Sciences

Department

Economics

Abstract

Prior to the enactment of the North American Free Trade Agreement, critics predicted NAFTA would harm the US economy. Even proponents of NAFTA admitted that free trade between the US, Canada, and Mexico would shift low-skilled jobs to Mexico where such work could be done more cheaply. Most economists predicted that such a job shift would occur in the apparel industry, which employs low-skilled workers. For example, Alain de Janvrey noted that “intra-industry trade in this case [between NAFTA countries] is importantly motivated by the chase for cheap labor and hence can induce systematic plant relocation toward Mexico” (de Janvrey, 1991, 1). After Congress enacted NAFTA in 1994, tariffs supposedly decreased in low-skilled industries such as apparels. Why then have US apparel exports to Mexico more than doubled since NAFTA went into effect? In addition to the increase in the United States’s apparel exports, apparel imports from Mexico also increased.

Download

Included in

Economics Commons

Share

COinS