CIAO DATE: 03/04

NAFTA's Promise and Reality. Lessons from Mexico for the Hemisphere

John Audley, Sandra Polaski, Demetrios G. Papademetriou, and Scott Vaughan

November 2003

Carnegie Endowment for International Peace

Abstract

This new report from the Carnegie Endowment for International Peace examines the impact of NAFTA after ten years. The report asks

• whether NAFTA has achieved-or is on track to achieve-its policy objectives;
• what impact it has had on the lives and livelihoods of North Americans, particularly Mexicans; and
• what lessons can be drawn for future trade policy for the US and for developing countries that negotiate trade pacts with the US.

To answer these questions, the authors looked beyond the two headline figures that have typically been used to measure the impact of NAFTA: the increase in the volume of trade between the countries and the increase in the flow of foreign investment.

Chapter 1: Jobs, Wages, and Household Income (PDF, 27 pages, 283.5 KB)

Chapter 2: The Shifting Expectations of Free Trade and Migration (PDF, 21 pages, 248.6 KB)

Chapter 3: The Greenest Trade Agreement Ever? Measuring the Environmental Impacts of Agricultural Liberalization (PDF, 27 pages, 284.4 KB)

Errata:

In Figure 10 (page 25) the trend line labeled "wages" inadvertantly showed unit labor costs. The new figure correctly presents the data on wages.

On page 27, the study cited in footnote 37 claims that NAFTA eliminated 766,000 net jobs during its first seven years. The text has been changed to reflect this.