Economics and Migration: NAFTA's Impact on Mexico

Abstract : The supporters of the North American Free Trade Agreement (NAFTA) believed that the agreement would solve many of the economic problems plaguing the developing economy of Mexico. For Mexico, the goal of NAFTA was a strengthened and prosperous economy leading to increased employment and higher wages. The United States believed a strengthened Mexican economy through the passage of NAFTA would result in fewer Mexicans illegally immigrating to the United States in search of jobs. NAFTA's effect on the economy of Mexico as a whole has resulted in only marginal gains, and it also has failed to reduce the rate of illegal immigration to the United States from Mexico. To realize the economic advantages NAFTA has to offer, Mexico will need to revise its fiscal policies and implement institutional reforms designed to combat corruption and improve the rule of law. Recommendations to the Mexican government will include institutional reforms to strengthen the economy and create a more conducive environment for the provisions of NAFTA to operate in. Recommendations provided to the United States government will help strengthen the Mexican economy and decrease the flow of illegal immigrants to the United States.