ABSTRACT
In January of 1990, Carlos Salinas arrived in Europe expecting to be warmly received and with considerable attention from both public and private sector groups that favored his program of economic and political reform. The news that Mexico was negotiating a Free Trade Agreement with its northern neighbors surprised many long-time Mexico watchers. The initiation of North American Free Trade Agreement (NAFTA) can be seen as a much delayed outcome of this phase of economic development in Mexico. Promotion of industry through tax exemptions and credit policies became especially significant between 1939 and 1941, and foreign trade policies became overtly protectionist in the four-year period from 1944 to 1947. The chapter argues that Mexican participation in NAFTA is to a considerable extent the result of the exhaustion of the import substitution phase of industrial growth, one should appreciate the political obstacles that Carlos Salinas has overcome.
