The Corner

Re: Has Nafta Done Any Good?

Many thanks to a pal at the Congressional Research Service, who dug up a

lengthy report on “NAFTA at ten.”

In summary: “For Mexico, the Carnegie Endowment and the World Bank note

that real wages are lower than when NAFTA began, but conclude that it was

not the

cause. Decomposing the trend shows that Mexico experienced a 25% fall in

real wages after the 1994 peso crisis. Real wages began a steady recovery in

1997 and are approaching 1994 levels. Interestingly, the World Bank study

showed that those Mexican states tied to FDI [= Foreign Direct Investment],

exports, and maquilas had higher and faster-growing wages than other

states.”

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