Since the North American Free Trade Agreement (NAFTA) was enacted in 1994, the amount of foreign direct investment (FDI) inflow in Mexico has increased significantly. After 20 years since NAFTA’s inception, this paper examines how FDI flows into Mexico compare to total factor productivity (TFP) for the 1960-2013 period. Results show there is a statistically significant unexplained portion of TFP positively affecting FDI. Factors used to determine TFP include total imports, total exports, and unemployment rate from 1980-2013. Results conclude that there are implications regarding international trade policy of the negative effects on FDI as they pertain to Mexico before and after the inauguration of NAFTA.
Starting in the 1970s the United States began to demonstrate an interest in expanding their economic market far beyond their national borders. This process soon got the name of Globalization. The North American Free Trade Agreement (NAFTA) is the third agreement the United States signed into effect. This free trade agreement liberalize trade between Canada, the United States, and Mexico. Before and after the negotiations much debate existed as to the potential success and the set backs of this agreement. To this date debate exists, however more evidence is available as to the success of this economic policy. In this paper, I explore the negative effects that Mexico has endured as a result of NAFTA. I examine the economic, public health, and environmental impacts of this agreement. Furthermore, I dive into a series of labor strikes that took place in the later part of 2015 and earlier part of 2016 around the Lexmark Maquiladora. I examine the reality that laborers in Ciudad Juarez, Mexico experience on a daily basis. I examine this case study through a post-colonial lens. Looking at the “left-over” entanglement from Colonialism. My goal in researching this topic is to analyze the potential effects that developing countries like Mexico, might face upon integrating their economy into the Global Market. More specifically what can a developing country suffer upon entering a free trade agreement with an industrialized, imperialist country like the United States.