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The Impact of NAFTA on the United States

Author

Listed:
  • Mary E. Burfisher
  • Sherman Robinson
  • Karen Thierfelder

Abstract

We describe the main economic arguments posed for and against the North American Free Trade Agreement (NAFTA) during the U.S. policy debate. To evaluate these arguments, we analyze recent trade data and survey post-NAFTA studies. We find that both the U.S. and Mexico benefit from NAFTA, with much larger relative benefits for Mexico. NAFTA also has had little effect on the U.S. labor market. These results confirm the consensus opinion of economists at the time of the debate. Finally, studies find that trade creation greatly exceeds trade diversion in the region under NAFTA, especially in intermediate goods.

Suggested Citation

  • Mary E. Burfisher & Sherman Robinson & Karen Thierfelder, 2001. "The Impact of NAFTA on the United States," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 125-144, Winter.
    • Handle: RePEc:aea:jecper:v:15:y:2001:i:1:p:125-144
    Note: DOI: 10.1257/jep.15.1.125
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.15.1.125
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    References listed on IDEAS

    as
    1. Joyce Manchester & Warwick Mckibbin, 1995. "The global macroeconomics of NAFTA," Open Economies Review, Springer, vol. 6(3), pages 203-223, July.
    2. David M. Gould, 1998. "Has NAFTA changed North American trade?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q 1, pages 12-23.
    3. Rudiger Dornbusch & Alejandro Werner, 1994. "Mexico: Stabilization, Reform, and No Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 253-316.
    4. Robinson, Sherman & Thierfelder, Karen, 2002. "Trade liberalisation and regional integration: the search for large numbers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), pages 1-20.
    5. Anne O. Krueger, 1999. "Trade Creation and Trade Diversion Under NAFTA," NBER Working Papers 7429, National Bureau of Economic Research, Inc.
    6. Steven Berry & Vittorio Grilli & F. Lopez-de-Silanes, 1992. "The Automobile Industry and The Mexico-Us Free Trade Agreement," NBER Working Papers 4152, National Bureau of Economic Research, Inc.
    7. Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
    8. Hinojosa-Ojeda, Raul & Robinson, Sherman, 1992. "Labor Issues in a North American Free Trade Area," CUDARE Working Papers 198601, University of California, Berkeley, Department of Agricultural and Resource Economics.
    9. David Karemera & Kalu Ojah, 1998. "An Industrial Analysis of Trade Creation and Diversion Effects of NAFTA," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 13, pages 400-425.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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