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The Pacific Alliance, Free Trade Agreement


Submitted By adrisosa1
Words 1590
Pages 7
1. Mexico has always portrayed itself as one of the most pro-trade countries in the world. For instance, we have a free trade agreement with the United States and Canada, and another one with the European Union. We are active members of the WTO, the OECD, the APEC, the Pacific Alliance, and have also signed multiple bilateral agreements with many nations, most of them deemed “strategic”. Answer the next two questions in your own words:

a. What are the potential costs and benefits of adopting such a free-trade strategy?

The benefits when a country trades freely with other nations, consumers in that country have access to a wider variety of products. Some of these products may not otherwise be available if the consumers were limited to domestically manufactured goods. Or these products may be prohibitively expensive without a free trade arrangement. Also can boost the quality of life along the countries' shared border. This is the case with the Texas-Mexico border. After the creation of NAFTA, the area servicing the transfer of goods between the U.S. and Mexico experienced an economic boom. Five years after the free trade agreement, John Adams Jr., vice chairman of the Industry Sector Advisory Council, noted that this border area was growing economically at a faster rate than any other region on the planet.

And the potential costs

U.S. exports tend to create jobs in this country, but increases in imports tend to reduce jobs because the imports displace goods that otherwise would have been made in the United States by domestic workers.
In the last two years, some 280,000 jobs have vanished with the closure of more than 350 maquiladoras.

b. What can it be done to reduce the costs and maximize the benefits?
2. Drawing upon the new trade theory and Porter's theory of national competitive advantage, outline the Mexican case for one of these national

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