@article{Estrades:332956,
      recid = {332956},
      author = {Estrades, Carmen},
      title = {Going backwards: Assessing the impact of NAFTA dissolution  on Mexico},
      address = {2018},
      year = {2018},
      note = {Presented at the 21st Annual Conference on Global Economic  Analysis, Cartagena, Colombia},
      abstract = {In August 2017, Mexico, United States and Canada, the  three members of the North America Free Trade Agreement  (NAFTA), engaged in the renegotiation of the agreement for  the first time in 23 years. To the moment, little progress  has been achieved, and the turnout of NAFTA renegotiation  remains highly uncertain. The lack of agreement in  sensitive issues suggests that one possible turnout is the  end of NAFTA.  A termination of NAFTA would have a strong  impact on Mexico economy and the labor market. The  objective of this paper is to assess the impact of NAFTA  dissolution on Mexico economy in a general equilibrium  framework. To do so, we apply two different general  equilibrium models. First, we apply a multicountry model,  MIRAGE, to assess the impact of NAFTA dissolution on all  NAFTA members. Then, we take results from the global model  as inputs to a single country, dynamic general equilibrium  model, Linkage, calibrated for Mexico, with the aim of  estimating the sectoral impact on Mexico, as well as the  changes in labor market variables.  We simulate the  termination of NAFTA by assuming that the U.S., Canada and  Mexico apply most favored nation (MFN) tariffs to imports  from current NAFTA partners. We also simulate an increase  in non-tariff barriers and a reduction in FDI flows among  NAFTA members. Preliminary results show that the  elimination of NAFTA would have a negative impact on  growth, trade, and welfare among all NAFTA members. Mexico  would be the most harmed, with a fall in GDP of 0.9% with  respect to the baseline scenario in 2025. The negative  results would be accentuated if, besides the increase in  tariffs, NAFTA dissolution also brings about an increase in  NTB and a reduction in FDI flows.},
      url = {http://ageconsearch.umn.edu/record/332956},
}