Question

In: Economics

What role did NAFRA play in Mexico-US migration?

What role did NAFRA play in Mexico-US migration?

Solutions

Expert Solution

NAFTA is preferential trade agreement between USA, Canada and Mexico. It was expected that through NAFTA, Mexican farmers would becomes well off and legal migration to USA shall be reduced. American workers were fearing that it would lead to mass exodus of US companies to Mexican territories in search of low cost and market.

But such projections did not come true. Massive and irrational subsidies by the US government to its farmers reduced cost of agricultural products in USA. Farmers through reduced tariffs, exported its products to Mexico where many farmers who were hitherto protected through the tariffs, were ruined. There was significant fall in demand for Mexican agro products.

Such distortions were created through Lavish subsidies by US government to its farmers. Mexican farmers were rendered jobless and they took illegal route to reach US states. Hence, problem of illegal migration to US is indirect impact of US policies.

To sum, Migration to US can be minimized if Mexican farmers are adequately protected.


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