Bachelor Thesis from the year 2005 in the subject Economics - International Economic Relations, grade: 1,0, Jönköping International Business School, course: Economics, language: English, abstract: Mexico has concluded various free trade agreements over the last decade, with NAFTA and the EU-Mexico FTA being the most important ones. In this paper, the effect of both agreements on bilateral trade is presented through descriptive statistics on the one hand, and by applying a time series analysis in the form of an export and import demand function on the other. The results of the graphical analysis indicate that the coming into force of NAFTA has led to a rise in Mexico’s trade with that bloc, even though the econometric analysis does not support the assertion that the conclusion of the agreement is responsible for that. The EU-Mexico FTA has not led to a significant rise in Mexico’s exports to the EU, mainly due to transport costs. These costs are also the dominant factor in explaining exports from Mexico to its NAFTA partners, and therefore lead to the conclusion that the change in transport costs over time is more important than tariff reductions granted by the parties. Interestingly, Mexico’s imports from these two blocs are mainly determined by Mexico’s GDP and the exchange rate, rather than by transport costs.

The EU-Mexico Free Trade Agreement is the first volume in a series of monographs encompassing text and analysis of all multilateral and bilateral free trade agreements. All this adds up to the kind of information business and economic analysts need in order to make sound decisions both in the long and short terms. For example, The EU-Mexico Free Trade Agreement, containing the most detailed and practical comparison of NAFTA and the EU-Mexico Agreement available anywhere, offers a wealth of material and insight with which to build realistic answers to such critical questions as: -How is Mexico's preferential access to the EU markets for agricultural exports affected by US trade in produce, livestock and meat? - Has the EU-Mexico Agreement hurt the "big three" US auto manufacturers? - Has the mandated cooperation between Mexican and European standards-related agencies given rise to standards that conflict with NAFTA? Published under the Transnational Publishers imprint.

The seven contributions in this book examine the potential impact of a North American Free Trade Agreement (NAFTA) with Mexico on the U.S. economy. They cover such key aspects as the general sources of comparative advantage between Mexico and the U.S., regional and local effects on production and employment, and the effect on production in particular industries. The authors start from the premise that the trade agreement will have a small impact on the overall U.S. gross national product because the U.S. economy is large compared to that of Mexico and because there is already much unrestricted trade between the two countries. Several chapters consider how some sources of comparative advantage that cut across industries differential environmental regulations and wage differentials - may affect the outcome. These are followed by chapters that assess the locational effects on U.S. production, either from the viewpoint of which metropolitan areas will gain employment or of the scale effects-transportation cost-tradeoff. Concluding chapters address the effect of the NAFTA on several individual U.S. sectors such as agriculture, automobiles, and financial services. Peter M. Garber is Professor of Economics at Brown University. Contents: Introduction, Peter M. Garber. Environmental Impacts of a North American Free Trade Agreement, Gene M. Grossman, Alan B. Krueger. Wage Effects of a U.S.-Mexico Free Trade Agreement, Edward E. Leamer. Some Favorable Impacts of a U.S.-Mexico Free Trade Agreement, J. Vernon Henderson. Mexico- U.S. Free Trade and the Location of Production, Paul Krugman, Gordon Hanson. Trade with Mexico and Water Use in California Agriculture, Robert C. Feenstra, Andrew K. Rose. The Automobile Industry and the Mexico-U.S. Free Trade Agreement, Steven Barry, Vittorio Grilli, Florencio Lopez-de-Silanes. Opening the Financial Services Market in Mexico, Peter M. Garber, Steven R. Weisbrod.