The ability to remove export licenses is constrained by their often having been established either to stay within export quotas set by international agreements or to comply with import quotas imposed on Mexico by its trading partners. This is a typical example of how formal and informal trade restricting arrangements might eventually erode the free trade system itself. The discussions of trade liberalization and macroeconomic adjustment are given more or less independently. Trade liberalization generally reduces distortion in resource allocation, but at the same time it has a strong impact on macroeconomic performance. The real exchange rate appropriate for a highly protected regime will not be desirable for one that has been liberated.