Market Comment 016 – NAFTA AT 20: Personal

reminiscences and speculations

NAFTA is a story of mixed success, of pluses and minuses. There is a temptation to depict the successes of NAFTA in terms of trade statistics, as the purpose of the agreement is ostensibly about trade. It turns out, however, that there is a global problem with U.S. and Mexican trade statistics, which is that they do not take into account intra-firm commerce, that is, the flow of goods and services between related companies.

In 1991, Mexico changed its national chart of accounts to include what, previously, had been “border transactions”; the result was that all articles for temporary import were counted as if their commercial destination was the Mexican domestic market. The same articles were counted again as a Mexican export when a finished or semi-finished product was returned to the U.S. So, statistics are of little help in trying to gauge the significance of NAFTA.

This 3-page report offers anecdotes as an alternative window through with to view the origins and significance of NAFTA, and comments on the failure of negotiators to design a new oil regime in 1993, one that would wait 20 years before Mexican leaders had the courage to do.

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Written by

Mexico Energy Intelligence

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.