Trade creation and trade diversion under NAFTA. Mexican perspective

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Foreword           9

 

1. Economic premises behind trade integration 15

1.1. Trade integration: notion and forms             15

1.1.1. Definitions of trade integration          15

1.1.2. Forms of integration according to Balassa      18

1.1.3. Forms of integration according to the WTO classification       21

1.2. Integration: premises and drivers   23

1.3. Effects of integration of countries at a different level of economic development under conditions of perfect competition      24

1.3.1. Internal and external comparative advantage             27

1.3.2. Multi-product comparative advantage           29

1.3.3. Income divergence and convergence             31

1.4. Effects of integration in conditions of imperfect competition           35

1.5. Summary    37

 

2. Origins and main provisions of NAFTA  39

2.1. Origins         39

2.2. NAFTA: objectives, principles, and institutions         47

2.3. Trade in goods: liberalisation and control mechanisms         49

2.3.1. General regulations 50

2.3.1.1. National treatment and market access for goods      50

2.3.1.2. Rules of origin            53

2.3.1.3. Technical barriers to trade    55

2.4. Investment and services     56

2.4.1. Investment  57

2.4.2. Services         59

2.4.2.1. Telecommunications and financial services  60

2.4.2.2. Temporary entry for business persons           61

2.5. Summary    62

 

3. Trade effects of Mexico’s membership in NAFTA         65

3.1. Overview of empirical studies          65

3.2. Impact of trade agreements on Mexico’s foreign trade: a study using the gravity model    71

3.2.1. Description of a gravity model            71

3.2.2. Results of estimations and descriptive statistics         78

3.3. Shifts in Mexico’s foreign trade flows after the establishing of NAFTA         88

3.3.1. Changes in Mexico’s exports               97

3.3.2. Changes in Mexico’s imports               111

3.4. Summary    124

 

Conclusion         125

 

Afterword          127

 

Bibliography      129

 

List of figures    135

 

List of tables      137

 

Appendices       139

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