From NAFTA to USMCA : Can a Good Idea that Came Too Late Be Born Again?

This paper analyses from an international trade perspective the lower-than-expected growth dividends of the export-led strategy adopted by Mexico in the 1990s. Particular attention is given to employment, labour productivity and regional outcomes. The North American Free Trade Agreement caused Mexican exports to skyrocket in the first years of its implementation. This initial lift was quickly sapped by China’s emergence, especially after its WTO accession in 2001. The recent period witnesses a renewed dynamism of Mexican presence in the US market. In an international context marked by deglobaliza-tion and decoupling, this rebound is expected to continue under the United States–Mexico–Canada Agreement which became effective in 2020. Yet, in order to deliver economic growth, one of the challenges for Mexico is to diversify the geographical loca-tion of its exporting industries. The analysis of Mexican exports shows also that idiosyn-cratic weaknesses, such as the low contribution of the business services sector, need to be addressed