t that forced the government to stay the course, despite the instincts of some major officials and endless cries by opposition parties and small businessmen. But the process of political change of which NAFTA is an integral part has itself also been experiencing an extraordinary transformation. Whereas elections were always bitterly disputed, today everybody in Mexico sees elections as the normal way to select that is going to govern them. Though many Mexicans disagree with NAFTA and blame it for all sorts of ills, there is hardly a question that NAFTA has been a critical factor of political change. NAFTA has had an extraordinary impact on Mexico's trade. Between 1994 and 1997 trade between Mexico and the United States increased. Total trade between Mexico and the United States went from 89.6 billion dollars in 1994 to 176.71 billion in 1997 and an estimated 188 billion in 1998. NAFTA had enabled Volkswagon, IBM, and businesses in the textile industry to seek labor and materials in less-expensive Mexico. IBM has created plants in Guadalajara that would otherwise have been built in Asia. As a result, the exports of IBM de Mexico have increased and created hundreds of new jobs. In addition, Mexico’s textile industry has grown as a product of NAFTA, and in 1996, Mexico surpassed China to become the largest supplier of textiles to the United States. In early 1995, Mexico was forced to dramatically devalue its peso by 50 percent, making its exports far more competitive, and reducing its imports both because they were relatively more expensive and because Mexico experienced a severe recession in 1995. From 1995 to 1998, the peso has appreciated in real terms against the dollar by about 25 percent.The Mexican overall trade balance went from a $18.5 billion deficit in 1994 to a $7.1 billion surplus in 1995 after the peso devaluation in December 1994. The impact of this change on the U.S. exports to Mexico was significantly less than...
