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Free Trade Agreements Between Developing and Industrialized Countries: Comparing the U.S.-Jordan FTA with Mexico's Experience Under NAFTA

  • Chomo, Grace V.
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    Developing countries are participating in bilateral and multilateral trade agreements in record numbers. Despite their eagerness to improve market access, fears remain that trade liberalization with large industrialized nations will erode infant industrial sectors, hindering the process of economic development. Empirical evidence from the North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico has not supported fears that trade liberalization with industrialized nations slows economic development in less-developed countries. NAFTA trade flows and foreign direct investment into Mexico expanded at a greater rate following NAFTA implementation, taking into account real exchange rate changes and capital flight during the 1995 peso crisis. Like Mexico, Jordan's improved access to the large U.S. market is expected to increase opportunities for Jordanian exports, attract foreign investment, and stimulate economic development with trade as the engine of growth. This study compares and contrasts Mexico's experience under NAFTA with Jordan's potential under the U.S.- Jordan Free Trade Agreement.

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    Paper provided by United States International Trade Commission, Office of Economics in its series Working Papers with number 15868.

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    Date of creation: 2002
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    Handle: RePEc:ags:uitcoe:15868
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    1. Thomas Vollrath, 1991. "A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(2), pages 265-280, June.
    2. Tobey, James A. & Chomo, G. V., 1994. "Resource supplies and changing world agricultural comparative advantage," Agricultural Economics, Blackwell, vol. 10(3), pages 207-217, May.
    3. Tobey, James A. & Chomo, G.V., 1994. "Resource supplies and changing world agricultural comparative advantage," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 10(3), May.
    4. Anne O. Krueger, 2000. "NAFTA's Effects: A Preliminary Assessment," The World Economy, Wiley Blackwell, vol. 23(6), pages 761-775, 06.
    5. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    6. Patrick J. Kehoe & Timothy J. Kehoe, 1994. "Capturing NAFTA's impact with applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 17-34.
    7. Nora Lustig, 2001. "Life Is Not Easy: Mexico's Quest for Stability and Growth," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 85-106, Winter.
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