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The NAFTA Preference and U.S.-Mexico Trade

Author

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  • Agama, Laurie-Ann
  • McDaniel, Christine A.

Abstract

This paper focuses on the U.S. tariff preference afforded to Mexico vis-à-vis non-NAFTA trading partners, and allows us to evaluate the impact of NAFTA in a manner consistent with the idea behind a preferential trading agreement. The estimation technique exploits the time-varying dimension of the tariff preference, over 1983 to 2001. We find that a higher tariff preference corresponds to increased U.S. import demand for goods, and that import demand was more responsive to changes in the tariff preference once NAFTA was in place than it was on average.

Suggested Citation

  • Agama, Laurie-Ann & McDaniel, Christine A., 2002. "The NAFTA Preference and U.S.-Mexico Trade," Working Papers 15873, United States International Trade Commission, Office of Economics.
  • Handle: RePEc:ags:uitcoe:15873
    DOI: 10.22004/ag.econ.15873
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    References listed on IDEAS

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    1. Murray, Tracy & Ginman, Peter J, 1976. "An Empirical Examination of the Traditional Aggregate Import Demand Model," The Review of Economics and Statistics, MIT Press, vol. 58(1), pages 75-80, February.
    2. Kimberly A. Clausing, 2001. "Trade creation and trade diversion in the Canada – United States Free Trade Agreement," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(3), pages 677-696, August.
    3. Hélène Erkel‐Rousse & Daniel Mirza, 2002. "Import price elasticities: reconsidering the evidence," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 35(2), pages 282-306, May.
    4. 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.
    5. James Devault, 1996. "Competitive Need Limits And The U.S. Generalized System Of Preference," Contemporary Economic Policy, Western Economic Association International, vol. 14(4), pages 58-66, October.
    6. 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.
    7. Anne O. Krueger, 1999. "Trade Creation and Trade Diversion Under NAFTA," NBER Working Papers 7429, National Bureau of Economic Research, Inc.
    8. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
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    Cited by:

    1. Naanwaab, Cephas B. & Yeboah, Osei-Agyeman, 2012. "The Impact of NAFTA on Agricultural Commodity Trade: A Partial Equilibrium Analysis," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119730, Southern Agricultural Economics Association.

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