The Impact of NAFTA on Mexico Essay Example | Topics and Well Written Essays - 1000 words

The Impact of NAFTA on Mexico - Essay Example NAFTA was established as a free trade agreement between Mexico, Canada and America and it has become one of the most debated free trade agreements in the world. While the Mexican economy has suffered when it comes to agricultural sector, it has made tremendous gains in other sectors which have made the overall affect of the agreement to be positive for Mexico. As more studies are made into the topic, the picture is likely to get clearer for all concerned parties but as of now, the NAFTA has been a blessing for the Mexican economy rather than a curse. The North American Free Trade Agreement is commonly known as NAFTA and it is an agreement to promote free trade amongst the countries of America, Canada and Mexico. The agreement was signed into effect on the first of January in 1994 and it now has remained in effect for more than thirteen years ro date (World Bank Group, 2001). An understanding of the economic effects and the benefits of this agreement is important for all students of economics, sociology and business since it affects all those fields of study. As an agreement between a developing country and two countries which are considered economically developed, the first beneficiary of the agreement seem to be large American corporations that choose to deploy a part of their operations in Mexico or Canada (Hill, 2006). This benefit comes from the economic advantage of lowered recruitment and Human Resource Cost for skilled and unskilled labor as compared to the uneconomical labor market in America (Sayre & Morris, 2004). Additionally, American operations managers and executives of companies working in Mexico have the advantage of a higher standard of living in Mexico since the cost of living is lower.