Harsh Reality: Mexico's NAFTA Problem

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Harsh Reality: Mexico's NAFTA Problem (15:00)
Item# 39182

More than a decade after NAFTA went into effect, many Mexicans are worse off than before. What went wrong, and why? Focusing on the clothing industry, this program goes straight to the experts south of the border—a shop owner, a factory manager, employees under constant threat of layoff, and an economics professor—to find out. A general inability to compete with Chinese manufacturing is blamed, along with the Mexican government’s failure to improve the nation’s infrastructure and education system. But at least one owner of a niche cut-and-sew operation expresses hope as he leverages better-quality workmanship to outcompete the Chinese in his market. (15 minutes)

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Segments in this Video - (5)

1. Prelude: Uneven Legacy of NAFTA in Mexico (02:04)
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In the early years of NAFTA, North American manufacturers flocked to Mexico to buy cheap labor, foreign investments flooded in, and exports increased 3-fold. Nevertheless, the average Mexican has fallen behind.

2. Post-NAFTA: Boom and Bust for Mexico (02:22)

After NAFTA, American demands for goods increased manufacturing in Mexico. Soon, the same companies shifted to Haiti where labor was even cheaper, and then to the China, where it would be a third less.

3. Why Mexico Lags Behind (02:45)

A general manager shows that his once-thriving cut-and-sew company has very little work and only half its former employee base. Mexico lags behind in production capacities, technology, and competitive wages. The company's business has gone to China.

4. Lower Standard of Living in Post-NAFTA Mexico (02:25)

The standard of living in Mexico is lower now than in 1993. Illegal immigration is twice what it was before NAFTA. A small niche market has grown up around finely detailed apparel for high-end retailers.

5. NAFTA Benefits in Mexico? (03:48)

Mexico's government failed to capitalize on NAFTA's early gains by fixing roads, building up waning energy supplies, and replacing outmoded transportation, education, and communication systems.

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