corn is among some of the more sensitive commodities with tariffs to be phased out over 15 years, it is a controlling yardstick to factor out much of NAFTAs immediate impact. Yet, like many imports, corn also dropped in 1995 and led to a draw-down of Mexicos stocks because the economic recession reduced corn consumption, according to the USDA. In fact, NAFTA was a cushioning and stabilizing factor during Mexicos economic crisis. USDA analysts say the 22-percent drop in U.S. exports to Mexico could have been worse without NAFTA, because the agreement kept Mexico from installing new barriers to stem imports. In addition, USDA officials say, NAFTA gave the United States and Canada an advantage over other agricultural traders in the Mexican market in 1995, and U.S. market share in Mexico increased even as its exports to Mexico declined. More generally, the National Foreign Trade Council, a U.S. trade association, said that although 1995 U.S. exports to Mexico were nearly 9 percent lower than 1994 levels, European and Japanese exports fell by 24 percent and 21 percent, respectively. Analysts also say that having a trade agreement that locks in economic ties between the United States and Mexico probably helped curb money flight from Mexico and stimulated a return of foreign investment. Without such an agreement in 1982, when Mexico had another debt crisis, the government took different measures that actually slowed recovery and further undermined investor confidence.In 83, we (Mexico) had a very large trade deficit, and we turned it into a surplus by cutting imports, Heath said from Mexico City.Almost 90 percent of the adjustment was on the import side. This time, 90 percent of the adjustment was on the export side. Because of policies locked in by NAFTA, we were able to fix the deficit by increasing exports. EmploymentNAFTA's effect on employment in the United States and Mexico remains a hotly debated question, with no definitive answer. Re...
