NAFTA and Convergence in North America: High Expectations, Big Events, Little Time

Economía, Vol. 4, No. 1 (Fall, 2003), pp. 1-53

54 Pages Posted: 29 May 2012

See all articles by William Easterly

William Easterly

New York University - Department of Economics

Norbert M. Fiess

World Bank

Daniel Lederman

World Bank - Latin America and Caribbean Region

Date Written: 2003

Abstract

The North American Free Trade Agreement (NAFTA) was formally implemented on 1 January 1994 by the United States, Canada, and Mexico. This treaty instantly gained global notoriety following the initiation of formal negotiations in 1991, not only because the initiative represented one of the most comprehensive trade agreements in history, but also because it seemed to be a breakthrough in establishing free trade in goods and services among developed and developing countries. The high expectations were that trade liberalization would help Mexico catch up with its northern neighbors. The ratio of Mexican GDP per capita to that of the United States did increase after unilateral trade reforms were implemented in 1986 and also after the implementation of NAFTA in the aftermath of the so-called tequila crisis. However, other Latin American economies also grew faster than the U.S. economy after the mid-1980s, especially Chile and, to a lesser extent, Costa Rica. Thus it is not obvious that NAFTA was particularly important in helping Mexico catch up with the United States.

Suggested Citation

Easterly, William and Fiess, Norbert M. and Lederman, Daniel, NAFTA and Convergence in North America: High Expectations, Big Events, Little Time (2003). Economía, Vol. 4, No. 1 (Fall, 2003), pp. 1-53. Available at SSRN: https://ssrn.com/abstract=2070240

William Easterly (Contact Author)

New York University - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

Norbert M. Fiess

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Daniel Lederman

World Bank - Latin America and Caribbean Region ( email )

1818 H Street NW
Washington, DC 20433
United States

HOME PAGE: http://sites.google.com/site/danielledermanworldbank/

Register to save articles to
your library

Register

Paper statistics

Downloads
73
Abstract Views
422
rank
321,624
PlumX Metrics