What is positive is that overall trade between the three NAFTA partners – the United States, Canada and Mexico – has increased sharply over the course of the pact`s history, from $290 billion in 1993 to more than $1 trillion in 2016. Cross-border investment has also increased sharply in recent years, with the stock of foreign direct investment in Mexico increasing from $15 billion to more than $107.8 billion in 2014. In terms of job growth, according to the U.S. Chamber of Commerce, six million U.S. jobs depend on U.S. trade with Mexico, an electricity that has been greatly facilitated by NAFTA, which has helped eliminate costly customs and non-tariff barriers. NAFTA has also enabled multi-layered integration of the U.S., Mexico and Canada`s supply chains. According to the Wilson Center, 25 cents of every dollar of goods imported from Canada to the United States is actually “Made in USA” content, like 40 cents of every dollar for goods imported to the United States from Mexico. Some critics argue that NAFTA is responsible for job losses and wage moderation in the United States, because competition from Mexican firms has forced many U.S. companies to relocate to Mexico. Between 1993 and 2014, the trade balance between the United States and Mexico fluctuated from a surplus of $1.7 billion to a deficit of $54 billion. Economists such as Dean Baker of the Center for Economic and Policy Research and Robert Scott, chief economist at the Economic Policy Institute, say the increase in imports from Mexico to the United States coincided with the loss of 600,000 U.S. jobs over two decades, although they admit that some of that import growth would likely have occurred without NAFTA.
For optimists in Mexico, nafta 1994 seemed to be full of promise. The agreement was indeed a 1988 Canada-U.S. extension. Free trade agreements, and it is the first that has linked an emerging market economy to development. The country has undergone difficult reforms and has begun a transition from the type of one-party economic policy to market orthodoxy. Proponents of NAFTA argued that the economy`s attachment to that of its wealthier northern neighbours would lock these reforms in and stimulate economic growth, ultimately leading to a convergence of living standards between the three economies. However, the effects of NAFTA in the United States were often masked by the Boom and Bust cycle, which fuelled domestic consumption, investment and speculation in the mid and late 1990s. Between 1994 (the year of NAFTA) and 2000, total employment in the United States increased rapidly, bringing overall unemployment to a record high. However, unemployment began to rise in early 2001 and 2.4 million jobs were lost in the national economy between March 2001 and October 2003 (BLS 2003).