1. Introduction/History
Mexico’s history goes back to 2000 BC, and during all these years until now, Mexico went through a lot of changes, some good and some bad (Hamnett, 2006) [1] . For obvious reasons, we cannot discuss thousands of years of events in just a few lines. Below we are going to discuss two or three very important events in Mexican history.
Mexico in its history went through three great civilizations, which were the Mayas, the Olmecs and the Toltecs. All three of these civilizations were before the empire of the Aztecs, which were eventually conquered by the Spanish between 1519 and 1521. The Mexicans gained their independence in 1821 after a revolution. The next several decades were not very good for Mexico. It lost Texas in 1836, and then after losing a war to the U.S. between 1846 and 1848, Mexico lost California, Nevada, Utah, most of Arizona and New Mexico, as well as parts of Wyoming and Colorado (Henderson, 2007) [2] .
Another very important event in Mexico took place right after World War II. During that time, the Mexican government concentrated on economic growth, and as a result, in the mid-1970s Mexico became a major petroleum producer. This brought some negatives to the Mexican economy (The World Fact Book, 2008) [3] . Since Mexico was a major petroleum producer, it started borrowing against its reserves. But when oil prices dropped in the 80s, Mexico was not able to meet its international debt. The end resulted from this was devastating for the Mexican economy. Rising unemployment and inflation forced the population to migrate from the rural areas to the cities as well as the United States (Enriquez, 2007) [4] . The next major event was in 1992, and this is when Mexico, Canada and the United States negotiated the North American Free Trade Agreement (NAFTA). This actually turned out to be a very good move for Mexico, because later in 1994 when the peso collapsed, and the overall financial system in Mexico was in trouble, the U.S. came to the rescue with $12.5 billion (Sarkar & Park, 2001) [5] . The economy finally was turned around, and Mexico was able to pay the debt three years ahead of schedule.
2. Current Literature
Mexico is a country with a population of about 120 million (2020), which had and still has its own economic ups and downs over the years. The purpose of this section is to present and discuss these ups and downs at the present time.
Although Mexico has recovered from one of the worst recessions it had during 1994, it still faces some major economic problems, such as low real wages, underemployment for a very large percentage of the population, unequal distribution of income and very few opportunities for advancement. The Mexican economy is a free market economy, and it is of the caliber of multi trillion dollars. Some of the most important components of this multi trillion-dollar economy are the following: some modern industry and agriculture, mostly privately owned, and during the last several years the different administrations of Mexico started expanding into seaports, railroads, telecommunications, electricity, just to name a few areas, as well as expanding trade with the U.S. and Canada since the implementation of NAFTA since 1994 (Adibi & Doti, 2001 [6] ; Mavrokordatos, 1996 [7] ; Mavrokordatos, 1997 [8] ).
Previously we mentioned that the economy of Mexico is characterized by industry and agriculture (Mavrokordatos, 1994 [9] ; Mavrokordatos, 1994 [10] ; Nica et al., 2006 [11] ). The agricultural production includes corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes, beef among other things, and the industrial production (2020 negative growth −9.94), includes food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, motor vehicles and consumer durables. Another important component of the Mexican economy is trade (The Columbia Electronic Encyclopedia, 2007) [12] . In 2020, Mexico exported $435 billion of US dollars, and that included manufactured goods, oil and oil products, silver, fruits, vegetables, coffee and cotton. The majority of these exports went to the US, and a good portion to Canada and Spain.
On the other hand, again in 2020, Mexico imported $423 billion, and again the majority was from the U.S., with China, Japan and South Korea following. Finally when we put all this information together, we have an economy with a GDP of $1.150 trillion, a growth rate of −8.31%, a per capita GDP of $8900, an unemployment rate of 4.45% and an inflation rate of 3.39%, and these basically summarize the economic picture of Mexico during 2020.
The data presented for 2020, does not necessarily show a bad economy, other than the negative growth rate of 8.31%.
In concluding this section, we would like to repeat something that is well known, that Mexico is one of the most important trade partners of the U.S., and the U.S. is the most important trade partner of Mexico. As a result, Mexico’s economy is heavily dependent on the U.S. economy.
3. Statistical Analysis
This next section, the Statistical Analysis section, is also the most important one. In this section, the authors are going to present a lot of economic data for Mexico (1971-2020), in order to do an evaluation of Mexico before and after NAFTA. The data will include but not limited to the Gross Domestic Product, the Unemployment Rates, the Inflation Rates, Exports and Imports just to name a few. The data will go as far back as 1971, and as recent as 2020. This particular time span gives us a number of years of data before NAFTA and a number of years after NAFTA, and it should be enough to help us derive some conclusions about the impact.
From Table 1 and Table 2, we are going to derive several graphs, in order to make it easier for us to see and discuss the economic conditions in Mexico before and after the North American Free Trade Agreement.
What we can see in Figure 1, is that the GDP over the years has shown a steady growth, even though it had some ups and downs over the years, the population growth was not as much, although it was more than doubled during these years.
Figure 2 shows the total trade of Mexico. Exports and imports are almost parallel to each other, with imports exceeding exports most of the time and this is why we have negative net exports, although they have been improving during the last few years.
Figure 3 shows population and inflation, trying to find any connection. As
Source: The World Bank https://databank.worldbank.org/ (2022). IMF International Financial Statistics (IFS); National Income of China, the Directorate General of Budget, Accounting and Statistics, Executive Yuan; Economic and Social Research Institute, Economic Planning Agency, Japan http://investtaiwan.org/ (2021). GDP Constant 2015 Billions US$, GDP per Capita Constant 2015 Thousands US$, Exports (X) Constant 2015 Billions US$, Imports (M) Constant 2015 Billions US$, Net Exports (X - M) Constant Billions US$. Source: The World Bank https://databank.worldbank.org/ (2022).
Source: The World Bank https://databank.worldbank.org/ (2021). Source: IMF International Financial Statistics (IFS); National Income of China, the Directorate General of Budget, Accounting and Statistics, Executive Yuan; Economic and Social Research Institute, Economic Planning Agency, Japan http://investtaiwan.org/ (2021), Labor force in millions, Population in millions.
was mentioned earlier, population had a small but steady growth over the years. On the other hand inflation has been very volatile, especially between 1980 and 1988. After that it showed steady decline and finally in more manageable levels.
Figure 4 shows the relationship between net exports and population. Obviously net exports very unstable but as we can see in the regression, the population growth impacted net exports in a negative way.
Figure 5 shows the relationship between GDP per capita and inflation. Research shows that the per capita GDP impacted inflation but not very much, considering the increase in the GDP.
Figure 6 shows the industrial output growth rate. It is obvious from this graph that the growth of the industrial output has hurt the Mexican economy, since during the last 50 years a number of years had negative growth. Overall the industrial growth has been very unstable.
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Figure 6. Industrial output growth rate.
4. Conclusions
Finally, in concluding the paper, the authors would like to evaluate the data presented, and possibly derive conclusions about whether NAFTA helped or hurt Mexico.
Looking at and evaluating the data presented, we break it down into 2 periods. One from 1971 to 1993, 22 years, obviously prior to NAFTA; the second period covers the years 1994 to 2020, 28 years after NAFTA. Comparing these two periods, we did not find any drastic changes in the economy of Mexico after 1994, positive or negative. It seems that the Mexican economy continued at almost the same rate as before its recovery and development. Having said that though, we also need to say that 2 areas showed a slight improvement, although at this point it is not clear if they had any impact on the economy. These two areas are the inflation rates, and the net trade with the U.S. With respect to inflation, shown in Table 2, we can see that prior to 1994, Mexico had rates in triple digits, and as high as 131% during 1987. After 1994, however, we see a steady decline to single digits and as low as 2.82% during 2016. At this point, there is no indication that this trend will change.
In conclusion, as we stated earlier at this point, we cannot say with any degree of certainty that NAFTA helped or hurt.