Trade Liberalization Lecture # 14 Week 7. Structure of this lecture Theoretical arguments for trade liberalization Reasons for liberalizing trade in Latin.
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Presentation on theme: "Trade Liberalization Lecture # 14 Week 7. Structure of this lecture Theoretical arguments for trade liberalization Reasons for liberalizing trade in Latin."— Presentation transcript:
Case Study:MEXICO Middle income country High income inequalities 54.6 (higher than Argentina’s) Population: 109 000 000 Per capita income: one fourth of US Increasingly dominated by private sector in: Industry: food, beverages, tobacco automobile, chemicals, tourism State-owned: Petroleum, mining, Natural gas Free market economy: NAFTA, and Many other bi-lateral free trade agreements
NAFTA: North American Free Trade Agreement (1994) Mexico, USA, and Canada Largest in the world in the world in GDP purchasing power Criticisms and controversies: - Canadian disputes - Impact on Mexican farmers - Immigration debate - US deindustrialization…….
-Banking crisis (“Tequila Crisis”) after trade liberalization and NAFTA
Credit crunch contributed to N-sector stagnation Another contributing factor: slow pace of structural reforms Corrective measures? Eliminate “bottlenecks” in the N- sector via: Improve contract enforceability Structural reforms in key sectors such as energy → Next Class: Privatization. Case Study: TELMEX Have a nice weekend -