NAFTA and the Environment: What Can the Data Tell Us?

The article focuses on the impact of the North American Free Trade Agreement (NAFTA) on the environment in Mexico. Trade and Investment Liberalization along with weaker environmental and worker's protection in developing countries, have raised concerns that industries are more polluting in their production processes located in industrial countries to evade stricter regulations. NAFTA critics have expressed their concerns for environmental conditions because growth in manufacturing industries would worsen environmental quality in Mexican border cities where polluting industries are located. This article focuses on the manufacturing sector in Mexico and discusses how the composition, location and technique of production have been effected by NAFTA. It also examines the impact of NAFTA on the composition of trade between Mexico and the United States.