Mexico In Nafta: Challenges For Integration Policy

Mexico's entry into NAFTA in 1994 has brought the country the benefits of greater integration with its neighbors to north. Mexican exports have become an important engine driving the country's economic growth, but these are highly concentrated in a few sectors, included the maquiladora sector. Meanwhile the performance of non-exporting economic sectors has been slow and inconsistent; and imports have shot up not due to increased domestic consumption but because of the lack of added value in the export sector. The lack of credit resources has impeded growth of entrepreneurship in small and middle sized firms and in consumption. One suggestion for improving overall Mexican socioeconomic performance in the context of greater integration could be to take greater advantage of existing NAFTA clauses that promote joint ventures and imports of high technology in preferential conditions. Mexico could also negotiate the creation of mechanisms similar to those employed in the European Union to support its less developed members. At the same time, Mexico must seek the diversification of export markets and o