The impact of tariff liberalization between the United States and Mexico: an empirical analysis

Abstract

A computable general equilibrium (CGE) model of the US is constructed in order to simulate the impact of tariff liberalization between the United State and Mexico following the implementation of the North American Free Trade Agreement (NAFTA). We find that although this agreement will have a minimal effect on the US economy as a whole, certain sectors and regions may experience substantial gain and losses. Overall, however, the treaty should increase economic welfare and enhance economic growth.