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Imprint
Effects of Free Trade Agreements on Mexican Households
Project
Project code: vTI-MA-08-26
Contract period: 01.10.2005
- 30.09.2008
Purpose of research: Applied research
Mexico has become a prime example of trade and foreign investment as catalysts for economic modernization and growth. Mexico is distinguished among developing countries by its openness trade policy implemented in the last years. Since 1990 Mexico signed the NAFTA with Canada and USA, the agreement entered in force in 1994. Thereafter Mexico has entered into new Free Trade Agreements (FTAs) with Chile, the European Union, Israel, Japan, Singapore, Nicaragua, and the Northern Triangle (El Salvador, Guatemala, and Honduras). At the moment Mexico has more than 30 signed FTA´s.
In the coming years the Mexican economy faces considerable challenges. On the one hand, Mexico must adjust its economic structure to foster the competitiveness and to take advantage of the signed FTA´s. On the other hand, these adjustments should ensure that the negative effects on rural households will be lower than those observed on urban households.
Contrary to developed countries, in developing countries the income distribution is highly unequal. Poor urban households are on average fewer than poor rural households. An appropriate method to evaluate the welfare effects of free trade is quantifying the extent to which the rural households compared with the urban households get better off. Therefore, by evaluating agricultural policies in developing countries the main focus should be on the income effects on rural households.
Section overview
Subjects
- Agricultural Policy
- Agricultural Sociology
