How?. What will happen with trade with China if we impose environmental restrictions on Mexico?. Does a lax environmental policy in Mexico give them an unfair advantage?. Should the US Government subsidize competing domestic (U.S.) industries? Seeking to address these questions with respect to international trade, we now turn to an exploration of Mexico (Foreign Policy Association, 2009).
Economic globalization has dramatically raised the standard of living in Mexico, albeit with environmental pitfalls. Mexico, a developing country which has embraced economic liberalization and is now a member of NAFTA (the North American Free Trade Agreement), has exhibited recent economic gains since joining this regional trade block. With a population of 108.3 million and a GDP of $839 billion, Mexico has benefited tremendously from economic liberalization and market-oriented growth. In response to its inclusion in NAFTA, employment has risen consistently over the past decade and a half and annual GDP growth over a ten year period from 1997 to 2007, is estimated at 3.7%. This level of steady and consistent growth over a period of 10 years is remarkable for a country which has remained underdeveloped relative to its North American counterparts since its creation nearly two centuries ago. Accordingly, as a percentage of its labour force, the average Mexican unemployment rate from 1995 to 2006 stood at a low 2.8%. Compare that with Mexico’s neighbor to the south, Columbia which still does not have a free trade agreement with the world’s largest economy, the United States, and the results are astounding. Over the same period, Columbia had an average unemployment rate of nearly 15% . Since industrialization in Mexico – as in China – has been relatively rapid, economic conditions have tended to supersede environmental concerns.