The Effect of NAFTA on Energy and Environmental Efficiency in Mexico

Prior to Mexico's entry to the North American Free Trade Agreement (NAFTA), predictions of the consequent impact on the environment in that country ranged from the dire to very optimistic. This article investigates NAFTA's outcomes in terms of energy use and the emission of atmospheric pollutants. Specifically, has entry into NAFTA led to a convergence or divergence in indicators of emissions, environmental efficiency, and emissions‐specific technology in Mexico, the United States, and Canada? A battery of tests is applied to these indicators for energy use and carbon, sulfur, and NOx emissions in the three countries. The results show that the extreme predictions of the outcomes of NAFTA have not materialized. Rather, trends that were already present before the introduction of NAFTA continue and, in some cases, improve post‐NAFTA, but not yet in a dramatic way. There is strong evidence of convergence across the three countries toward a lower intensity of energy use and emissions per unit of GDP. Although intensity is rising initially for some variables in Mexico, it eventually begins to fall post‐NAFTA. Per capita emissions of sulfur and NOx also show convergence, but this is not the case for energy and carbon, and the latter variables also drift moderately upwards. The state of technology in energy efficiency and sulfur abatement is improving in all countries, although there is little, if any, sign of convergence and NAFTA has no effect on the rate of technology diffusion. However, total energy use and carbon emissions increase both pre‐ and post‐NAFTA and total NOx emissions increase in Mexico. Only total sulfur emissions are stable and falling in all three NAFTA partners.     

NAFTA's Impact on Business Environmental Decision Making

Signing the North American Free Trade Agreement (NAFTA) liberalized trade policy and reduced tariffs between Mexico, the United States, and Canada, but activists opposed to the treaty predicted an environmental disaster. This article seeks to analyze the dynamics of environmental spending and changes in companies' profiles following NAFTA. Our results suggest that these predictions have not come true. Through an econometric model, we explore how 2,438 industries in the 1994–2002 period made environmental decisions and how much they spent on cleanup. Estimates were made with a dynamic panel model using the generalized method of moments (GMM) method. Our results suggest that environmental investment decisions depended on business size, their technological capabilities, sales performance, and the need to comply with the standards required by customers in the international market. The last section explores policies to improve compliance with Mexico's environmental regulations and to develop sustainable, eco‐friendly manufacturing.     

THE POLITICAL TRADE‐OFF BETWEEN ENVIRONMENTAL STRINGENCY AND ECONOMIC DEVELOPMENT IN RURAL AMERICA*

ABSTRACT We examine the impact of the political trade‐off between rural economic development and environmental quality on the determination of environmental regulations in the U.S. intensive livestock industry. The political economy model, adapted from Fredriksson (1997) , is tested empirically, using state‐level data on environmental regulation of the U.S. livestock sector. We find that state governments respond to greater potential for water pollution with more stringent environmental regulations. Consistent with our political economy model, we also find that states with lower recent growth in per capita income implement less stringent environmental regulations.     

Can Voluntary Environmental Regulation Work in Developing Countries? Lessons from Case Studies

Hamstrung by weak institutions that undermine conventional environmental regulatory tools, policymakers in developing countries are increasingly turning to voluntary approaches. To date, however, there have appeared few evaluations of these policy experiments. To help fill this gap, we summarize arguments for and against the use of voluntary regulation in developing countries, review the nascent literature on the topic, and present case studies of agreements negotiated between regulators and leather tanners in an industrial city in Mexico, a national environmental audit program in Mexico, and a national public disclosure program in India. Admittedly few in number, these three case studies nevertheless suggest that although voluntary environmental regulation in developing countries is a risky endeavor, it is by no means doomed to failure. The risks can be minimized by emphasizing the dissemination of information about pollution and pollution abatement options and by avoiding voluntary approaches in certain situations—those where regulatory and nonregulatory pressures for improved environmental performance are weak and where polluters can block quantified targets, individual sanctions for noncompliance, and other widely accepted prerequisites of effective voluntary initiatives.     

NAFTA on the Brain: Why Creeping Integration Has Always Worked Better

This paper argues that since the completion of the NAFTA in the early 1990s, there has been too much focus on what governments in Ottawa, Washington, and Mexico City have or have not been doing to deepen North American integration. The NAFTA was an anomaly that obscures the larger history of incrementalism that has shaped North America's political economy. A focus on large, government-led integration projects like the NAFTA as a model for North American integration distracts from an examination of the many connections and processes taking place across borders every day. Security has become fully entrenched as a driving paradigm of North American relations. However, much of the activity in this domain and others is taking place at the bureaucratic, sub-state, and non-state levels rather than via active direction from national leadership. As scholars and analysts of North America, we would do well to move away from the NAFTA as a model for negotiating North America's future.     

Examining Indigenous perspectives on the health implications of large‐scale agriculture in Jalisco,Mexico

In Mexico, as in many other parts of the world, industrial agriculture is dramatically changing rural landscapes and altering relationships with the land. This paper draws on community‐based research from a collaborative international research project that examined the perceived health implications of the agricultural industry for Indigenous peoples in the state of Jalisco, Mexico. Thirty interviews were conducted in a Nahuas community experiencing expanding agribusiness industries. The results of this study show that the implications of export‐oriented agricultural industry for this Nahuas community are complex and, at times, contradictory: employment in the agricultural industry provides community members with much‐needed sources of income, but it is precarious work. At the same time, community members are concerned about the long‐term health and environmental implications, such as increased exposure to chemicals, depletion of the soil and water, and loss of traditional food and lifeways. These results suggest that to better understand the costs and benefits of large‐scale agriculture for Indigenous health, a broad lens of health that is situated in the context of colonial legacies and the particularities of relationships with the land is required.     

北美自由贸易协定与美墨关系

北美自由贸易协定(NAFTA)的签定是冷战结束后美墨关系发生变化的一个重要标志,是经济全球化过程中的重要发展趋势。美、加、墨通过建立经济合作关系,实行经济自由化、一体化,既有利于三国经济的互利合作,又促进墨西哥的政治经济体制改革,为墨西哥对外经济开放、发展外向型经济提供机遇。但美墨之间由于历史遗留问题以及墨西哥国内依然存在的强烈民族主义倾向,墨西哥经济对美国经济的过分依赖等,使美墨关系还存在不确定的变数。由于墨西哥积极发展与亚太地区和欧盟的经济合作关系,未来美墨关系的发展,以及建立北美自由贸易区统一货币等问题,是对NAFTA的一个严峻考验。     

REGIONAL INCOME EVOLUTION IN SOUTH AFRICA AFTER APARTHEID*

ABSTRACT South Africa is one of the wealthiest countries on the African continent. The high national level (and growth) of GDP per capita, however, masks significant differences in economic performance across South Africa's regions. This paper uses (spatial) Markov chain techniques to describe the evolution of the entire cross‐section regional income distribution in terms of its intra‐distributional characteristics during the post‐Apartheid period. The results indicate a heavily diverging regional income distribution. Relatively poor regions are likely to remain poor or become even poorer and the richest regions will maintain their lead in terms of income levels. Explicitly taking account of space furthermore shows that these high‐income regions are acting as local growth poles, absorbing economic activity from their immediate surroundings. Location, trade, education, and the variable fortune of the gold mining industry seem to be important determinants of the observed evolution.     

Entrepôt for Chinese Consumer Goods in Central Asia: The Puzzle of Re-exports through Kyrgyz Bazaars

Relying on mirror foreign trade statistics and their reconciliation with official data on balance of payments, two economists demonstrate the important role of bazaars as major conduits of trade in Central Asia, and particularly of Kyrgyz bazaars for the entry of Chinese consumer goods into the region. The authors estimate that in recent years up to three quarters of the goods imported by Kyrgyzstan have been unofficially re-exported to other Central Asian countries, generating substantial income for the Kyrgyz economy. A concluding section explores the implications of the re-export trade for Kyrgyzstan (e.g., positive spillovers for domestic light industry) as well as the potential emergence of new competitors (e.g., Kazakhstan).     

Trade Liberalization and the Fiscal Squeeze: Implications for Public Investment

This article examines the impact of trade liberalization on the level and structure of government expenditures across countries, with particular emphasis on low income countries. It develops the argument that the policies employed during trade liberalization have resulted in a fiscal squeeze as a result of declining tax revenues and rising interest expenditures. To surmount this fiscal hurdle, expenditures on physical capital, which have negligible political ramifications, have been reduced. Other more politically sensitive expenditures, such as spending on social capital, have been financed by incurring additional debt. However, additional debt has exerted upward pressure on interest payments, further exacerbating the fiscal situation. The statistical analysis carried out to examine the evidence uses panel data for eighty developing and industrialized countries over the period 1970–98 and employs a fixed–effects regression framework to account for country–specific characteristics. The results indicate that trade liberalization has indeed resulted in declining revenues and higher interest expenditures and that these factors have contributed to the observed decline in infrastructure spending.     

THE EFFECTS OF TRADE WITH DEVELOPING COUNTRIES ON THE REGIONAL DEMAND FOR SKILL IN THE U.S.: EVIDENCE FROM COUNTY DATA*

ABSTRACT Using county‐level data from the 1980s and 1990s and a county‐level trade measure that incorporates the county's industrial mix and patterns of international trade across industries, I provide new evidence that trade with developing countries raises the demand for skill and the skill premium in the U.S. Consistent with Heckscher–Ohlin, I find that trade driven by differences in factor endowments has an economically significant impact on local labor markets. The evidence suggests that when trade with developing countries rises, counties with higher skill endowment and greater employment in industries with larger trade shares experience greater relative demand for high‐skilled labor.     

Mapping international flows of electronic waste

In this paper, we map the international trade in electronic waste (e‐waste). We quantify the directions and magnitude of this trade at the global scale and examine the utility of the pollution haven hypothesis for explaining the observed trade patterns. Our results demonstrate four key findings: the international trade in e‐waste is a more complex story than being one about ‘rich’ countries dumping waste in ‘poor’ countries; the trade in e‐waste is highly regionalized, with intra‐regional trade accounting for most of the total trade flows; the pollution haven hypothesis is an important, but partial, explanation of observed trade patterns; and there is a need to conceptualize the trade and traffic of e‐waste as open ended and contingent processes facilitated by situated practices of wasting and valuing that rely on geographic difference and mobility for the exchanges between the domains of waste and value to occur.     

Local Community Characteristics and Cooperation for Shared Green Reputation

This article examines how basic socioeconomic and political factors are associated with higher levels of cooperation to garner a local community's shared green reputation. We analyze panel data on participation efforts in a collective voluntary environmental program, the Ecological Blue Flag Program, by the entire population of beach communities in Costa Rica between 2001 and 2009. Collective voluntary environmental programs are relatively new and aim to improve environmental performance and shared “green” reputation through joint participation and certification of multisector groups comprising businesses, governmental institutions, and nongovernmental organizations. Our results indicate that higher levels of within‐community cooperation for shared green reputation are more likely in seashore localities with lower income inequality and/or a higher number of businesses. These findings run counter to research suggesting these same characteristics are associated with lower levels of cooperation in the management of common pool natural resources such as fisheries and forests. We also find that within‐community cooperation is positively correlated with a greater proportion of expatriates from industrialized countries and/or with higher levels of democratic political participation.     

Welfare accounting and the environment: reassessing Brazilian economic growth, 1965-1993

Few countries in recent decades have experienced economic growth as rapid as that in Brazil. The period spanning the late 1960s and mid 1970s, during which GDP growth was especially strong, is often referred to as the ‘economic miracle’. Yet, the use of per capita GDP growth as a proxy for economic development (or social welfare improvement) can be questioned on both distributional and environmental grounds. Scholars such as Ahluwalia and Chenery have noted that per capita GDP growth places greater weight on the income of richer income groups, and have proposed distribution‐neutral and pro‐poor alternatives. More recently, studies by the World Resources Institute and others have questioned the environmental sustainability of GDP growth and have introduced an alternative national income accounting methodology that factors in estimated losses associated with natural resource depletion. To date, no studies have undertaken both types of revisions concurrently, creating a revised national welfare measure based on per capita GDP, but corrected for both distributional bias and resource depletion. Such a measure is derived in this article and applied to the Brazilian case. The results cast doubt on the proposition that rapid economic growth in Brazil has resulted in comparable welfare gains.     

Subprime Housing Goes South: Constructing Securitized Mortgages for the Poor in Mexico

Mexico represents the largest market for residential mortgage‐backed securitization (RMBS) in Latin America. Despite its significance to questions of development, there has been no critical analysis on the social implications and power dimensions of RMBS with regard to low‐income housing in Mexico. This essay fills this gap by demystifying the technical and thus apolitical nature of RMBS as well as by explaining how and why state‐sponsored securitization schemes subsidize financial and construction interests in the name of expanding home ownership for the poor. In so doing, the analysis employs a historical materialist approach that, first, places RMBS within the contradictory nature of capital accumulation processes in Mexico and relations of class‐based power therein, and second, views RMBS as an integral feature of housing policy that is inextricably linked to the nerve centre of capital accumulation, namely: the credit system.     

Canada–Mexico Relations: Interdependence,Shared Values … and the Limits of Cooperation

This article offers a historical overview of the evolution of the relationship between Canada and Mexico, emphasizing its exiguity, its fundamental economic nature and the consequences of sharing borders with the United States. It is organized as follows: the first section covers the period going from the establishment of diplomatic relations in 1944 to the late 1960s, a period during which the bilateral relation failed to consolidate despite sporadic efforts; the second section deals with the period starting with the convergence of political visions in the two capitals in the early 1970s up to the period immediately preceding the starting of the negotiations leading to NAFTA. The period during which the most significant engagement between the two countries has taken place to the present is reviewed in the third section. The article concludes presenting some thoughts on the possibilities and limits of cooperation between the two countries.     

Macroeconomic Effects of 21st Century Trade and Investment Agreements: The Case of the Trans‐Pacific Partnership

Following United States withdrawal, the Trans‐Pacific Partnership agreement (TPP) is likely to be replaced or complemented by a series of bilateral deals between the US and TPP partners. In this case, TPP will shape trade, finance and public policy globally even without formal US participation. Proponents of TPP emphasize its prospective economic benefits, with economic growth increasing due to rising trade volumes and investment. Widely cited projections suggest modest GDP gains after 10 years, varying from less than half a percentage point in the USA to 13 per cent in Vietnam. However, these projections assume full employment and constant income distribution in all countries, excluding some of the major risks of trade liberalization. This article provides alternative projections of the TPP's economic effects using the United Nations Global Policy Model, which allows for changes in employment and income distribution. Using this model, the authors obtain very different results. They find that the benefits to economic growth are even smaller than those projected with full‐employment models, and are negative for Japan and the USA. More importantly, they find that the TPP will likely lead to losses in employment and increases in inequality.     

Evolution of the Labor Market in a Regional City:The Changing Economic Performance of Emigrants from Mexico City*

Abstract. This paper draws on micro‐level data to fully inform the debate on decentralization and regional development. Using labor‐income trajectories of emigrants from Mexico City, the paper analyzes how the labor market in a regional city, Leon, evolves. Results from the econometric model suggest that migrants’ labor‐income trajectories differ between the large agglomeration and the regional city in an early stage of the evolution of the labor market, but converge in a later stage. Specifically, the slope of the earning function for recent migrants is steeper and statistically different from the slope for early migrants. The findings presented in this paper enrich the existing theory by providing microfoundations to a typically macroeconomic area of research and enable policy makers to better understand the processes underpinning the evolution of regional labor markets.     

Socioeconomic impacts of Russian invasion of Ukraine: A multiregional assessment for Europe

History shows that wars can be enormously disruptive of economic activity, especially international trade, national income, and global economic welfare. This article analyzes the impact on the European regions the Russian invasion of Ukraine using the largest and most updated multiregional input-output model for Europe. Two shocks, trade and inflation, and four alternative scenarios are simulated. The scenarios are considered regarding the number of countries applying a trade embargo, the exemption of oil and gas, and the potential trade diversions with third countries such as China. We obtained a significant fall in GDP (−1.7%), 3.7 m lost jobs and 3% raise over the prewar inflation rate. For trade shock, large indirect effects are obtained, indicating the high relevance of the sectors and countries exposed to the war and the sanctions. The republics of the former Soviet Union, as well as the satellite countries of the former communism, face the harshest adverse impacts. This work shows the importance of breaking Russia's colonial economic ties to the countries in Eastern Europe.     

NAFTA's Labor Side Agreement and International Labor Solidarity

The North American Free Trade Agreement (NAFTA) and its supplemental labor pact, the North American Agreement on Labor Cooperation (NAALC) reflect the uneven advances of labor rights advocacy in connection with international trade. NAFTA provides extensive rights and protections for multinational firms and investors in such areas as intellectual property rights and investment guarantees. The NAALC only partially addresses labor rights and labor conditions, but within its limits it has shown itself to be a viable tool for cross-border solidarity among key actors in the trade union, human rights, and allied movements. The NAALC's principles and complaint mechanisms create new space for advocates to build coalitions and take concrete action to articulate challenges to the status quo and advance workers' interests. Cooperation, consultation, and collaboration among social actors have brought a qualitative change to transnational labor rights networks in North America.