Danielle Schwab

Mexico has taken on many different reputations over the past three decades. In fact, the country can be a bit of a chameleon depending on which news source or expert you ask. The uncertainty surrounding the stability of Mexico has a lot to do with its reliance on oil exports, a volatile commodity, as well as its entrenched economic ties with the United States. Attempting to follow the booms and busts of Mexico’s economy, or at least it’s projected economic future, looking at newspaper headlines can give an idea of how Mexico’s international economic standing has changed over time and is difficult to predict.

Nothing is more contradictory or telling of Mexico’s unpredictable future than the succession of events in 1994; with the collapse of the peso, known as the Tequila Crisis, happening the same year the North American Free Trade Agreement (NAFTA) was implemented. The projected success of NAFTA led many to believe Mexico would be catapulted towards economic growth and development, but decades later the jury is still out whether NAFTA has brought even marginal success to the Mexican economy.

When the financial crisis hit the U.S. in 2008, Forbes wrote of a “Mexican Meltdown.” The explosion of the drug war and the predicted drop in exports due to the contracting U.S. economy seemed like it would bring the growth in Mexico to a halt. That same year, The U.S. Joint Forces Command put Mexico in the same category as Pakistan and implied it was becoming a failed state.[1] Less than three years later, Forbes wrote an article, “The Mexican Miracle: Despite Drug War, Economy Is Booming,” applauding Mexico’s economic growth.[2] By 2011, the country was redefining itself through “MEMO” or “Mexico’s Moment,” a term renowned in publications used to tout Mexico as new and improved. But by 2014, Mexican journalist Carlos Loret de Mola, writing for Huffington Post said, “Nonetheless, the judicial-system and law-enforcement crisis and the Ayotzinapa tragedy unveiled has made the MEMO bubble burst.”[3]

Looking at the swiftly changing international reputation of Mexico is relevant for the focus of this paper, which will look at the inability of Mexico’s export-led development to transpire since moving away from the import-industrialization strategies (ISI) of the 1980s towards free market policies. Beginning with the signing of NAFTA in 1994, Mexico has seen a rise in manufactured exports. Between 1992 and 2008, in the space of just 16 years, the country’s total exports jumped from US$ 46.2 billion to US$ 291 billion. The mean annual growth rate for exports was 9.6% in 1989- 2006, 5.8% between 1989 and 1993, and 14.1% for 1994-2008.[4] Today, manufactured exports continue to rise, with a 3.4 percent increase in the first nine months of 2014, while Brazil and Argentina’s, for example, contracted by 1.8 and 2.4 percent respectively.

Mexico’s auto sector has been particularly strong, experiencing double-digit export growth every year since 2010. Recently, Mexico surpassed Japan as the number two auto exporter to the U.S., though the irony is that the cars are Nissan and Honda.[5] The plastics industry has averaged 13.4 percent growth in exports over the past five years and Mexico’s small but burgeoning aerospace industry, based in the central state of Queretaro, has grown even faster in recent years.[6] For most countries, these developments would be signs of a country transitioning from a developing country to a highly developed country, but unfortunately, in the case of Mexico, this has not proven to be true.

This paper will look at some of the reasons why the boom in export led growth post-NAFTA has not led to a corresponding growth in GDP. I will present the argument that it has been the specifics of rules from NAFTA that have hindered Mexico’s development and kept it as a predominately assembly economy. To prove this point, I will compare the similar path of development with the “Asian Tiger” countries that also began their economic development as assembly economies, but have transitioned into highly developed economies with internationally recognized, competitive, domestic brands.

It is hard to pinpoint what exactly has held Mexico back from sustained development. I will look at the role of imports of intermediate goods and the corresponding lack of domestic value-added growth in the production chain of exports and whether this can explain the lack of growth in GDP.

I will argue that the role of the United States, which receives the majority of Mexico’s exports, has been able to influence it’s supply chains to preserve the interests of American businesses. The authority of the U.S. during Mexico’s transition to liberalized trade has created a situation where Mexico imports a high level of intermediate goods from the U.S., cheap Mexican labor is employed for assembly and the finished product is often sent back to the United States. In order to evaluate the impact of intermediate goods imports, I will look both the role of the maquiladora and the laws that mandated intermediate goods to be imported from the United States as well as the opaque rules of NAFTA mandating rules of origin and how that has impacted domestic value-added growth. Finally, I will show how Mexico’s export-led economy differs in comparison to East Asian countries that have been able to transition from assembly economies to competitive domestic brands owners and entrepreneurs and address the Mexican government’s inability to protect the growth of certain industries to promote competition, as the Asian Tiger countries did post WWII.

 

Looking at Mexico’s transition to a manufactured export economy

 

After the failed policies of ISI, which resulted in the “lost decade” of the 1980s, Mexico looked toward Washington Consensus policies, including trade liberalization and a reduction of state intervention in the economy, to bring them out of their slump. The implementation of NAFTA in 1994 set Mexico on an export-led growth path meant to bring the nation from a highly indebted poor country to a competitive, middle-income nation.

In 1994, total exports represented 16% of Mexico’s real GDP. By the year

2000, this figure had more than doubled, reaching 35.1%. The rise in exports was also coupled with a shift in the composition of its goods exports: in 2008, the value of exports of manufactures, as opposed to commodities, came to US$ 231 billion, which was equivalent to 79% of Mexico’s total exports. [7]

Despite the fact that Mexican manufacturers have been so successful since the 1980s, the gap between exports and GDP continued to widen. (Figure 1) Mexico’s per capita GDP growth of just 18.6 percent over the past 20 years is about half of the rate of growth achieved by the rest of Latin America. (Figure 2 and 3) According to Mexican national statistics, Mexico’s poverty rate of 52.3 percent in 2012 is almost identical to the poverty rate of 1994. As a result, there were 14.3 million more Mexicans living below the poverty line as of 2012 than in 1994.[8]

Many academics have projected why this may be and some point to the corresponding rise in imports as having prevented growth in the Mexican economy. Summed up well in a report by CEPAL:

It is clear that, in general, exports have not constituted a sufficiently powerful engine of growth for the manufacturing sector, nor – given the procyclical nature of the industry – for the whole economy, despite their dynamism. Part of this failure owes to the fact that Mexico’s manufactured exports have become increasingly dependent on imports, and are hence characterized by reduced local content and weak linkages with domestic suppliers.[9]

 

This inability to match growth in exports with a growth in GDP will be further examined in later sections.

Today, Mexico’s manufactured exports as percentage of GDP are the highest in Latin America. (Figure 4) Mexico is still the only country in the region in which products with technological content make up the biggest percentage of total exports. [10] (Figure 5) The top three exports are vehicles, which are 21.6% of global exports, electronic equipment, 20.1% and machines at 15.2%.[11] These are all industries that require high-tech imports and most of which are owned by foreign companies.

 

The Theory Behind Export-led Growth

 

Before going on to argue why a growth in exports did not lead to a corresponding growth in GDP, it is important to understand why those two have been linked in the first place.  Export-led growth, known as export substitution industrialization (ESI) or export led industrialization (ELI), is a trade and economic policy which aims to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage. Export-led growth is important for mainly two reasons. The first is that export-led growth can create profit, allowing a country to balance their finances and pay off their debts. The second, much more debatable reason, is that increased export growth can trigger greater productivity, thus creating more exports and economic development. [12] Key to the success of this theory is that a country must find an export they can manufacture well and be competitive with other countries. This is where Mexico has fallen behind, as their three top manufactured exports all require high-tech imports and are subject to global competition. With the theoretical support that growth in exports should lead to growth in GDP, we can move forward to see what went wrong in the case of Mexico.

 

Maquiladoras

 

Mexico’s export-oriented industries began with a program established in the 1960s by the Mexican government, which allowed foreign-owned businesses to set up assembly plants in Mexico and import duty-free the inputs and machinery they would need for export assembly operations. Known as maquiladoras, these factories were initially required to export 100% of their output up until the signing of NAFTA. To ensure firms abided by this rule, they were required to buy a bond equal to the value of their imports that would be returned to them once they had exported all their imported inputs in the form of final goods. In contrast to other firms in the country, maquiladoras could be 100% foreign owned.[13]

By the early 1990s, maquiladoras provided more than half of Mexico’s total exports of manufactured goods, and more than 40% of Mexico’s total exports. This policy, which was highly influenced by the United States, turned Mexico into a destination for assembly plants, which did increase productivity and exports but had little growth on overall GDP.

In response to the maquiladora program, the U.S. instituted its offshore assembly program (OAP), which permitted the duty-free return of domestically-manufactured components that had been processed in another country. OAP reduced the cost to U.S. firms of moving assembly operations abroad because a U.S. firm that makes components, ships them to a plant in Mexico for assembly, and then reimports the finished good will only have to pay import duties in the United States on the value of Mexican labor and raw materials used in assembly. In contrast, if the firm were to buy inputs in Mexico and have them assembled there, it would pay U.S. import duties on the entire value of the good. [14]

After the signing of NAFTA, all Mexican firms were given duty-free access to imports, yet the maquiladora sector continued to thrive. Though they have created much-needed employment opportunities, especially for women, policies that created the prevalence of maquiladoras made cheap labor and assembly plants the comparative advantage of Mexico well into the foreseeable future.

 

High rate of intermediate good exports

 

Prior to the signing of NAFTA, Mexico required that U.S. owned manufacturing plants had to purchase a share of production inputs from Mexican sources or to export a greater value of goods than they imported. [15] This policy, along with whatever was left of Mexico’s protectionist measures, was done away with after the signing of NAFTA.

Specifically, under NAFTA’s article 303, the waiver of import duties, commonly known as “duty-drawback,” was eliminated, which meant that maquiladoras using non-NAFTA originating inputs to produce goods to export to the United States or Canada would have to pay Mexico’s import duties, which were sometimes as high as 35 percent; while inputs from NAFTA countries would still be duty free.[16] This meant that maquiladoras importing from countries such as Japan or China would have to pay tariffs on those goods, making it no longer possible to import the cheapest intermediate goods, causing products to be more expensive and consequently less competitive.

The Rules of Origin (ROO) under NAFTA are used to identify products eligible for preferential treatment among members of the free trade agreement. These rules determined duty-free status for U.S. and Canadian products exported to Mexico, which have led to the high amounts of imported intermediate goods for products being exported. To illustrate the correlation between the role of exports in Mexico’s growth, the ratio of manufacturing exports to GDP increased from 10.6% in 1999 to 37.1% in 2007. The ratio of imports to GDP followed a similar trend, increasing from 16.3% before the enactment of NAFTA to 34.8% in 2000 and to 43.6% in 2007. Intermediate goods were the largest component, accounting for at least three quarters of goods imports.[17]

This surge of imports of intermediate goods takes away from domestic value-added in a supply chain. Using this framework it is important to differentiate the difference between domestic and foreign value-added in a given product. A commonly cited example is of the Apple iPod, which showed that while the Chinese factory gate price of an assembled iPod is $144, only $4 constitutes Chinese value added,[18] meaning the assembly labor comes from China, while the idea, components and even machinery are shipped in from abroad. In the case of Mexico, U.S. manufacturing industries, including automotive, electronics, appliances, and machinery, all rely on the assistance of Mexican manufacturers. On average, Mexico’s manufacturing exports have a foreign value-added share of about 66 percent. Those industries that have a foreign content share of 50 percent or more account for 80 percent of the country’s manufacturing exports.[19] One study estimates that 40% of the content of U.S. imports from Mexico are of U.S. origin. In comparison, U.S. imports from China are said to have only 4% U.S. content.[20]

 

This rise in imports seems to have offset the potential positive impacts on the economy due to growth in manufactured exports. These rules built into NAFTA were meant to promote U.S. business interests while putting at a disadvantage the interests of Mexican businesses. The inability of Mexican businesses to engage in perfect competition as well as government policies that offer multinationals incentives to outsource their assembly production to Mexico, has kept workers unskilled and prevented the growth of domestic value-added.

 

Contrast to “East Asian Miracle”

 

At early stages of their development, both East Asian countries and Mexico were seen as newly industrializing countries (NIE’s), but at some point, East Asian countries surged ahead, while Mexico was held back. Looking at the similar adaptations of export-led growth strategy, why did one region develop while the other lagged behind? I will present the case that it Mexico’s over-commitment to free trade and ideas of comparative advantage, while East Asian countries maintained some protectionist policies that allowed domestic firms to graduated into higher value-added manufacturing (original equipment and own-brand production) and become competitive exporters of manufactured goods. Meanwhile Mexico has “progressed” from assembling apparel to assembling electronics and auto parts.

The World Trade Organization views newly industrializing countries’ as those transitioning from exporters of raw materials to manufactured goods. Because Mexico is almost in a class of it’s own in Latin America in terms of manufactured exports, it has held onto the regional liberalization policies of the 1990s and has not followed the trends that led to the success of East Asian countries in the 1960s-1980s.

The “East Asian Miracle” refers to countries that experienced extremely rapid manufactured export growth, classified in two stages: the ‘Gang of Four’ NIEs: Korea, Taiwan, Hong Kong and Singapore, followed by the 3, second tier NIEs: Malaysia, Thailand and Indonesia, who also experienced rapid growth later during the 1980’s. The share of the ‘Gang of Four’ in world exports of manufactures rose from 1.5 % in 1965, to 5.3 % in 1980 and to 7.9% in 1990; the combined share of Malaysia, Thailand and Indonesia rose from 0.4% in 1980 to 1.5% a decade later. At the same time, these countries also experienced high levels of GDP growth. The 4 “Tigers” had annual growth rates of output per person well in excess of 6 percent, which were sustained over a 30-year period.[21] Mexico, on the other hand, was not experiencing a similar rise in GDP. In fact, Mexico’s per capita GDP growth of just 18.6 percent over the past 20 years is about half of the rate of growth achieved by the rest of Latin America.

There are many factors that contributed to reasons why East Asia had such success with export-led growth, but for the context of this paper I will look at certain policies adopted by the “Asian Tiger” governments that Mexico has been unable or unwilling to implement for themselves.

The first difference has been East Asia’s high domestic savings as a proportion of GDP that has provided them the bulk resources for investment that later fueled the economy. Where Mexico’s domestic savings have hovered around 20% of GDP since industrialization, East Asian countries continued to rise over time and Singapore, for example, was at 50% in 1993. (Figure 6)

The second difference was the role of the government in many East Asian countries that worked to protect domestic industries and to strategically help move industries away from labor and resource-intensive goods towards more skill and knowledge intensive products, which has been the missing link in Mexico to reach the level of sustainable expansion that East Asia achieved. In general, many East Asian countries protected domestic industries with export tax credits, import tariff protection, access to credit for exporters, subsidized infrastructure supplies and financial support and tax credits for research and development. These policies have proven successful and though they should not be viewed as a recipe for export-led economic growth, Mexico should work to transition away from their dependency on the United States and certain government policies that prevent the future development of domestic brands.

 

Policy recommendations

 

Mexico must move away from its dependence on imports of intermediate goods and prioritize their development. To demonstrate how this policy has been used in practice, one can look at an example of how the government intervened in South Korea to protect domestic industry. Recognized internationally for their large deposits of tungsten, a metal used in the production of steel, South Korea was expected to specialize. But, instead of retaining their competitive advantage by exporting tungsten so other countries could produce steel, the government did the opposite and restricted steel imports and tungsten exports, resulting in a powerful domestic steel industry.[22] This is where Mexico can strive for improvement by focusing on the production of certain intermediate goods that they currently import. If Mexico continues to import components and export high tech manufactured goods owned by foreign companies, they will continue to be an assembly economy and will not see the same success the “Asian Tigers” saw by initially protecting nascent domestic industry.

Another recommendation is for the Mexican government to focus it’s spending on

physical infrastructure (ports, roads, power supplies), and social infrastructure (a well educated labor force) because these are the fundamental elements of sustainable economic development. Without proper infrastructure, not only multinationals will be hesitant to invest, but domestic industry will suffer as well. Mexico currently ranks 64 of 148 countries in terms of infrastructure, according to the Global Competitiveness Index of the World Economic Forum. Economists agree that Mexico’s prospects for becoming a truly industrial economy will remain limited unless the country accelerates its construction of roads, railroads, ports, energy plants and other physical infrastructure essential in any modern industrial economy. [23]  In 2014, the Mexican government published its National Infrastructure Program for 2014-2018, a comprehensive array of projects that would cost the public and private sectors a combined total of about $600 billion, but plans to upgrade its transportation sector, communications networks, energy sector, health care, urban development and housing and infrastructure for tourism. The challenge will be if this can actually be implemented or if falling oil prices and instability will derail the plan.

As for social infrastructure, if Mexico continues to uphold its comparative advantage in cheap labor, there is little incentive to educate the workforce. Mexico is caught in a tough position because it is currently viewed in competition with China in terms of products exported to the U.S. market. In this sense, Mexico is at a disadvantage because it has higher wages then in China, but has yet to invest in human capital to bring Mexico into the ranks to compete among highly developed countries. It is now thought that the East Asian economic miracle can be largely attributed to the regions’ sustained investment in human capital. Looking at the numbers, many of the East Asian countries had growth in government spending on education equal to their growth in GDP. Public expenditure on education increased in real prices at an annual rate of 9.5 percent in Korea between 1980 and 1990, while the GDP grew at a rate of 9.7 percent. In Singapore and Hong Kong, the expenditure on education increased faster than the GDP. [24] (Figure 7)

As a country with constant budget problems, education programs in Mexico are often underfunded and difficult to implement. As compared to other OECD countries, Mexico spends less then US$4,000 per student, compared to the OECD average of around US$10,000.[25] This must change if Mexico has hopes to encourage domestic entrepreneurs and highly skilled laborers to diversify their exports.

Another lesson learned from the East Asian miracle is the future payoff from government spending on research and development or tax credits for private R&D initiatives, which were seen in Korea, China and Singapore. This includes policies to promote technological innovation in manufacturing. (Figure 8) Mexico continues to lag behind when it comes to innovation, which has inhibited competitive domestic industries. According to a recent report from the Wilson Center, Mexico is behind many countries in innovation performance indicators, including public and private investment in research and development, science and technology journal publications, number of patents filed, tertiary education levels, and internet accessibility.[26] Mexico should work to spend more of its budget on innovation and promote entrepreneurs at home. This combined with a move away from a reliance on imported intermediate goods could allow Mexican industry to diversify and create more of their own brands, rather than relying on foreign multinationals.

In conclusion, there is no clear reason why Mexico has not achieved the growth in GDP it was promised with the signing of NAFTA, but there are many changes Mexico can make to work to change their fate of being stuck in the middle. What is certain is that observers should be careful when referring to Mexico’s “success” in the rise in exports of manufactured goods and applauding their development. Because on closer inspection, they have merely moved from a country that assembles t-shirts to a country that assembles cars, which in turn, has translated to little economic benefit for their own population.

Works Cited

Case, Brendan, “Mexico Surpassing Japan as No. 2 Auto Exporter to the U.S.” Bloomberg News. January 31, 2014. http://www.bloomberg.com/news/articles/2014-01-31/mexico-surpassing-japan-as-no-2-auto-exporter-to-u-s-

“Competitiveness in the Latin American Manufacturing Sector” BBVA Research. Working Paper No. 14/11. March 2014.

Deebusman, Bernard. Among Top U.S. Fears: A Failed Mexican State. The New York. Times. January 9.2009. http://www.nytimes.com/2009/01/09/world/americas/09iht-letter.1.19217792.html?_r=0

Duncan Wood, Christopher Wilson, and Alejandro Garcia. “Fostering Innovation In Mexico” The Wilson Center. September 2014. https://www.wilsoncenter.org/sites/default/files/InnovationInMX_ENG.pdf

Gerardo Fujii G. and Rosario Cervantes M. “Mexico Value added in exports of manufacturers” CEPAL Review No. 109 April 2013. http://repositorio.cepal.org/bitstream/handle/11362/37357/S2012915_en.pdf?sequence=1

Hanson, Gordon. “The Role of Maquiladoras in Mexico’s Export. Boom”. The National Center of Economic Research. July 26, 2002. https://migration.ucdavis.edu/rs/more.php?id=8

Haber, Stephen and Klein, Herbert. “Mexico Since 1980” Cambridge University Press: 2008.

“How a New Infrastructure Plan Could Help Build Mexico’s Future.” Knowledge @ Wharton. September 15, 2015. http://knowledge.wharton.upenn.edu/article/how-a-new-infrastructure-plan-could-help-build-mexicos-future/

Ibarra, Carlos A. “Maquila, currency misalignment and export-led growth in Mexico” CEPAL Review. No.104 August 2011. http://www.cepal.org/publicaciones/xml/0/45340/rvi104ibarra.pdf

Justino De La Cruz, Robert B. Koopman and Zhi Wang “Estimating Foreign Value added in Mexico’s Manufacturing Exports U.S. International Trade Commission. April 2011. http://www.usitc.gov/publications/332/EC201104A.pdf

Lau, Lawrence J., “East Asian Economic Growth: Miracle or Bubble?” Stanford University. July 20, 2001. http://web.stanford.edu/~ljlau/Presentations/Presentations/010720.pdf.

Loret de Mola, Carlos. How ‘Mexico’s Moment’ Became ‘Mexico’s Murder’. The Huffington Post. November 5, 2014. http://www.huffingtonpost.com/carlos-loret-de-mola/how-mexicos-moment-became_b_6103284.html

Mark Weisbrot, Stephan Lefebvre, and Joseph Sammut. “Did NAFTA Help Mexico? An Assessment After 20 Years. The Center for Economic Policy Research. February 2014. http://cepr.net/documents/nafta-20-years-2014-02.pdf

McCombie, J.S.L., and A.P. Thirlwall. Economic Growth and the Balance-of-Payments Constraint. New York: St. Martin’s, 1994.

“Mexico’s Manufacturing Sector Continues to Grow” Stratfor. April 6, 2015. https://www.stratfor.com/analysis/mexicos-manufacturing-sector-continues-grow

Robert Koopman, William Powers, Zhi Wan and Shang-Jin Wei. “Give Credit Where Credit is Due” Tracing Value Added in Global Production Chains” National Bureau of Economic Research. September 2010. http://www.nber.org/papers/w16426.pdf

Tilak, Jandhyala. “Building Human Capital in East Asia: What Others Can Learn” National Institute of Educational Planning and Administration. http://siteresources.worldbank.org/WBI/Resources/wbi37166.pdf

Vardi, Nathan. The Mexican Miracle: Despite Drug War, Economy is Booming. Forbes. October 15, 2012. http://www.forbes.com/sites/nathanvardi/2012/10/15/the-mexican-mircale/

Villarreal, Angeles M. “U.S.-Mexico Economic Relations: Trends, Issues, and Implications” Congressional Research Service. April 20, 2015. https://www.fas.org/sgp/crs/row/RL32934.pdf

Weiss, John. “Export Growth and Industrial Policy: Lessons from the East Asian Miracle Experience” ADB Institute Discussion Paper No. 26. February 2005. http://siteresources.worldbank.org/EXTEXPCOMNET/Resources/2463593-1213975515123/17_Weiss.pdf

Workman, Daniel. Mexico’s Top 10 Exports. http://www.worldstopexports.com/mexicos-top-exp

Footnotes

[1] Deebusman, Bernard. Among Top U.S. Fears: A Failed Mexican State. The New York. Times. January 9.2009. http://www.nytimes.com/2009/01/09/world/americas/09iht-letter.1.19217792.html?_r=0

[2] Vardi, Nathan. The Mexican Miracle: Despite Drug War, Economy is Booming. Forbes. October 15, 2012. http://www.forbes.com/sites/nathanvardi/2012/10/15/the-mexican-mircale/

[3] Loret de Mola, Carlos. How ‘Mexico’s Moment’ Became ‘Mexico’s Murder’. The Huffington Post. November 5, 2014. http://www.huffingtonpost.com/carlos-loret-de-mola/how-mexicos-moment-became_b_6103284.html

[4] Justino De La Cruz, Robert B. Koopman and Zhi Wang “Estimating Foreign Value added in Mexico’s Manufacturing Exports U.S. International Trade Commission. April 2011. http://www.usitc.gov/publications/332/EC201104A.pdf

[5] Case, Brendan, “Mexico Surpassing Japan as No. 2 Auto Exporter to the U.S.” Bloomberg News. January 31, 2014. http://www.bloomberg.com/news/articles/2014-01-31/mexico-surpassing-japan-as-no-2-auto-exporter-to-u-s-

[6] “Mexico’s Manufacturing Sector Continues to Grow” Stratfor. April 6, 2015. https://www.stratfor.com/analysis/mexicos-manufacturing-sector-continues-grow

[7] Gerardo Fujii G. and Rosario Cervantes M. “Mexico Value added in exports of manufacturers” CEPAL Review No. 109 April 2013. http://repositorio.cepal.org/bitstream/handle/11362/37357/S2012915_en.pdf?sequence=1

[8] Mark Weisbrot, Stephan Lefebvre, and Joseph Sammut. “Did NAFTA Help Mexico? An Assessment After 20 Years. The Center for Economic Policy Research. February 2014. http://cepr.net/documents/nafta-20-years-2014-02.pdf

[9] Gerardo Fujii G. and Rosario Cervantes M.

[10] “Competitiveness in the Latin American Manufacturing Sector” BBVA Research. Working Paper No. 14/11. March 2014.

[11] Workman, Daniel. Mexico’s Top 10 Exports. http://www.worldstopexports.com/mexicos-top-exports/2636

[12] McCombie, J.S.L., and A.P. Thirlwall. Economic Growth and the Balance-of-Payments Constraint. New York: St. Martin’s, 1994.

[13] Hanson, Gordon. “The Role of Maquiladoras in Mexico’s Export. Boom”. The National Center of Economic Research. July 26, 2002. https://migration.ucdavis.edu/rs/more.php?id=8

[14] Ibid

[15] Haber, Stephen and Klein, Herbert. “Mexico Since 1980” Cambridge University Press: 2008. Pg. 76

[16] Daniel Lederman, William F. Maloney and Luis Serven. “Lessons from NAFTA” The World Bank. 2005. Pg. 289

[17] Ibarra, Carlos A. “Maquila, currency misalignment and export-led growth in Mexico” CEPAL Review. No.104 August 2011. http://www.cepal.org/publicaciones/xml/0/45340/rvi104ibarra.pdf

[18] Robert Koopman, William Powers, Zhi Wan and Shang-Jin Wei. “Give Credit Where Credit is Due” Tracing Value Added in Global Production Chains” National Bureau of Economic Research. September 2010. http://www.nber.org/papers/w16426.pdf

[19] Justino De La Cruz, Robert B. Koopman and Zhi Wang “Estimating Foreign Value added in Mexico’s Manufacturing Exports U.S. International Trade Commission. April 2011. http://www.usitc.gov/publications/332/EC201104A.pdf

[20] Villarreal, Angeles M. “U.S.-Mexico Economic Relations: Trends, Issues, and Implications” Congressional Research Service. April 20, 2015. https://www.fas.org/sgp/crs/row/RL32934.pdf

[21] Weiss, John. “Export Growth and Industrial Policy: Lessons from the East Asian Miracle Experience” ADB Institute Discussion Paper No. 26. February 2005. http://siteresources.worldbank.org/EXTEXPCOMNET/Resources/2463593-1213975515123/17_Weiss.pdf

[22] Ibid

[23] “How a New Infrastructure Plan Could Help Build Mexico’s Future.” Knowledge @ Wharton. September 15, 2015. http://knowledge.wharton.upenn.edu/article/how-a-new-infrastructure-plan-could-help-build-mexicos-future/

[24] Tilak, Jandhyala. “Building Human Capital in East Asia: What Others Can Learn” National Institute of Educational Planning and Administration. http://siteresources.worldbank.org/WBI/Resources/wbi37166.pdf

[25] Duncan Wood, Christopher Wilson, and Alejandro Garcia. “Fostering Innovation In Mexico” The Wilson Center. September 2014. https://www.wilsoncenter.org/sites/default/files/InnovationInMX_ENG.pdf

[26] Ibid

[27] Gerardo Fujii G. and Rosario Cervantes M.

[28] Mark Weisbrot, Stephan Lefebvre, and Joseph Sammut

[29] Ibid

[30] “Competitiveness in the Latin American Manufacturing Sector” BBVA Research. Working Paper No. 14/11. March 2014.

[31] Ibid

[32] Weiss, John.

[33] Ibid

[34] Lau, Lawrence J., “East Asian Economic Growth: Miracle or Bubble?” Stanford University. July 20, 2001. http://web.stanford.edu/~ljlau/Presentations/Presentations/010720.pdf. Pg. 6