Trade Integration of Countries with Different Level of Economic Development – the Case of Mexico in North American Free Trade Agreement Cover Image

Integracja handlowa krajów o różnych poziomach rozwoju gospodarczego. Przypadek Meksyku w Północnoamerykańskim Porozumieniu o Wolnym Handlu
Trade Integration of Countries with Different Level of Economic Development – the Case of Mexico in North American Free Trade Agreement

Author(s): Justyna Wieloch
Subject(s): National Economy, Supranational / Global Economy
Published by: Wydawnictwo Uniwersytetu Łódzkiego
Keywords: North American Free Trade Agreement; NAFTA; international trade; developing countries; mexican economy; trade integration; economic integration; free trade area; trade creation; trade diversion
Summary/Abstract: Economic integration is definitely one of the most common forms of cooperation in the modern global economy – it would be difficult to indicate a country not belonging to at least one integration group. According to theory, such cooperation between countries should be followed by two effects: trade creation and diversion. The baseline study for this problem is the model provided by Viner, who was a precursor of analysis concerning welfare effects of economic integration. He was the one who proposed the concept of trade creation and trade diversion as a starting point for further, more complex studies on the effect of creating trade agreements. Viner implemented numerous limitations to his model, which on the one hand, enabled to avoid ambiguities arising in more detailed studies. On the other hand, however, the assumptions affect final conclusions, and therefore other researchers modify Viner’s assumptions and demonstrate how that determines theoretical integration effects. The dissertation topic was chosen because conclusions regarding profitability of integration are still inconclusive. The author has decided to conduct studies on NAFTA as, despite the existence of extensive literature containing research on the effects of economic integration, there are only few empirical analyses of specific groups in which attempts at identifying and evaluating membership in the trade agreement through the prism of creation and diversion effects were undertaken. The aim of the study was to assess the impact of membership in NAFTA on the Mexican economy, particularly on the country’s trade creation and diversion occurrence. This purpose distinguishes the dissertation from other studies on integration effects, since the majority of such studies involve either the theory or empirical analysis of the effects of integration in specific agreements. However, only in few studies, the differences in economic development are taken into consideration.

  • Page Count: 254
  • Publication Year: 2018
  • Language: Polish