Skip to main content
Contribution to Book
The North American Free Trade Agreement: Comparison with Southern EC Enlargement
The North American Free Trade Agreement: Opportunities and Challenges (1993)
  • Robert C. Shelburne, United Nations Economic Commission for Europe
This study compares how Mexico's addition to the U.S.-Canadian Free Trade Agreement compares to the southern enlargement (Spain, Portugal, and Greece) of the European Community (EC). Comparisons are made of incomes, populations, trade volumes, trade structures, intra-industry components, trade barriers, capital and labor mobility, and macroeconomic conditions. The major institutional differences between the two cases is developed emphasizing how the proposed free trade area will differ from the customs union, common market, and economic union aspects of the EC. Although there are many differences between the southern enlargement of the EC and the creation of the NAFTA, there are sufficient similarities to make a comparison useful. The major difference between the two cases is the difference in the per capita income of Mexico relative to the EC-3. The two cases are surprisingly similar in terms of the relative size and structure of their trade flows, their historical growth patterns and their openness to trade. Of the three nations to join the EC, the Spanish case appears to provide the scenario most likely to be followed by Mexico. The actual experience of the EC after accession is reviewed; the EC-9 did not appear to experience any significant adjustment problems due to the accession of the EC-3. Investment in the EC-9 was not significantly affected. The implications for the U.S. and Mexico based on the EC's experience are discussed. Changes in trade and production in the two countries will evolve slowly; there will be no rapid increase in Mexican productivity nor convergence to U.S. wage levels. In order for Mexico to benefit substantially, Mexico must create and maintain a stable macroeconomic climate with prudent fiscal and monetary policy. Significant foreign investment will be required for Mexico to grow rapidly.
  • NAFTA,
  • Mexico,
  • EC Enlargement,
  • Spain Accession,
  • Greece Accession,
  • Portugal Accession
Publication Date
September, 1993
Khosrow Fatemi
MacMillian Press
Citation Information
Robert C. Shelburne. "The North American Free Trade Agreement: Comparison with Southern EC Enlargement" London, UKThe North American Free Trade Agreement: Opportunities and Challenges (1993)
Available at: