ned. Mexico's gross domestic product (GDP) increased by 6.5 percent annually during the period from 1965 to 1980 but only 0.5 percent yearly during 1980 to 1988. Weak oil prices, rising inflation, a foreign debt of more than $100 billion, and worsening budget deficits exacerbated the nation's economic problems in the mid-1980s, although the economic picture brightened toward the end of the decade. In 1992 the GDP was $324.29 billion. The annual budget included $107 billion in revenue and $122 billion in expenditure. (Encarta, "Mexico") II. NAFTA In December of 1992, Presidents Salinas and Bush and Prime Minister Brian Mulroney of Canada signed the North American Free Trade Agreement (NAFTA). The Mexican legislature ratified NAFTA in 1993 and the treaty went into effect on January 1, 1994, creating the largest free-trade zone in the world. Creating a North American free-trade zone and privatizing state-owned industry was part of a plan by the Salinas government to revive the Mexican economy. By 1993, the Mexican government had sold 80 percent of its industries to private investors for about $21 billion and had reduced inflation from 150 percent to 10 percent. In November 1993, President Clinton predicted that if the trade agreement passes, American companies will add another 200,000 jobs by 1995. NAFTA's promoters predicted that by the end of 1995 the U.S. would enjoy a $9 billion trade surplus with Mexico. The reality is that the post-NAFTA surge in imports from Mexico has resulted in an $8.6 billion trade deficit with Mexico for just the first six months of 1995. By adding the Mexican trade deficit numbers to the current deficit with Canada, the overall U.S. NAFTA trade deficit for the first six months of 1995 alone is $16.7 billion. Using the Department of Commerce trade data in the formula used by NAFTA proponents used to predict job gains, the real ...
