'NAFTA will simply compound the ills created by the administrations policy of monopolistic free trade.' In the short run the U.S. and Canada would hardly feel any effect, while Mexico would face great disruptions as a result of opening its borders. This is because of the small size of the Mexican economy would barely create a crease in the economies of its northern neighbours. The problem is that unemployment may soar in Mexico because of the large inflow of manufacturers from its new trading partners. Indeed, Mexico's economy could collapse. In fact, in the last two years the number of unemployed in Mexico has increased by more than 1.1 million, while salaries have lost more than 41.6% of their dollar value. In 1993, 8.5% of the economically active population of Mexico earned less than the minimum salary; today 11.9 percent find themselves in the very same position.
Much like East Germany, Mexico suffers from 'backward technology and inefficient, bloated state monopolies. The trauma of exposure to giant northern firms could be fatal to Mexican manufacturing.' NAFTA proposes to open Mexican markets to Canada and the U.S. gradually, thus constraining the 'foreign onslaught,' however, the short run suffering that Mexico would endure would be massive. Especially since Mexico which has been buried in a deep slump since 1982, will not, unlike East Germany, receive huge financial aid.
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