GLOBALIZATION IN MEXICO: HISTORY, ADVANTAGES AND CHARACTERISTICS - HISTORY - 2025

The globalization in Mexico was a phenomenon of economic, political and social openness to the outside that took place during the 1990s The phenomenon began to develop in 1985, with trade liberalization, the unilateral elimination of tariffs and the elimination of restrictions foreign direct investment.

During this stage, globalization contributed to the economic growth of the country, favoring the development of industries such as manufacturing, automotive and electronics. This was also a period of intense technological modernization.

On the other hand, globalization allowed Mexico to gain a presence in international financial markets. The north and central west regions of the country experienced the phenomenon of globalization with greater intensity. In these regions, this was a period of improved working conditions, higher wages and reduced unemployment.

Likewise, the numerous free trade agreements signed by the country, such as NAFTA and TLCUEM, have allowed it to increase its exports. However, globalization also caused the increase in inequality in the country. Rural and little industrialized areas suffered from falling wages, increased poverty, and forced migration.

Globalization has also had other detrimental effects, such as the degradation of the environment. For these reasons, in Mexico the phenomenon of globalization has many supporters and also detractors.

Characteristics of Mexican globalization

Globalization in Mexico was a phenomenon of economic, political and social opening abroad.

This stage is characterized by the opening of trade barriers and the removal of restrictions on foreign direct investment. In addition, there was an increase in exports and imports.

Globalization did not affect all regions of the country in the same way. The regions bordering the United States and the central west of the state were the most exposed to the phenomenon.

On the other hand, rural and less industrialized areas participated to a lesser extent in globalization.

History

Faced with traditional protectionist policies, in 1985 Mexico adopted a policy of trade liberalization and the promotion of globalization.

Globalization and opening to the outside developed mainly during the 1990s. Mexico was one of the first emerging markets to experience this phenomenon.

During this period, Mexico faced a situation of internal economic contraction, devaluation of the peso and a banking crisis. However, increased exports and integration into international financial markets allowed the country to mitigate its negative impact.

In order to increase its trade openness abroad, Mexico signed multiple free trade agreements.

Especially important are the North American Free Trade Agreement (NAFTA), signed in 1994 with the United States and Canada; and the Free Trade Agreement between Mexico and the European Union (TLCUEM), signed in 2000.

Effects on politics

Starting in 1985, the government adopted measures such as the unilateral abolition of tariffs and the elimination of restrictions on foreign investment. Thanks to political support, the globalization process in Mexico was especially fast.

The main engine of change was the progressive elimination of barriers to trade and investment, in addition to technological modernization.

Globalization has led to an increase in Mexico's participation in international relations and in international politics.

Effects on society

Globalization brought with it the cultural opening of Mexico to the outside. This stage made it possible to improve working conditions and reduce unemployment in the country, especially in the areas most exposed to globalization. Important advances were also made in the area of ​​labor rights.

On the other hand, the increase in foreign direct investment also contributed to reducing unemployment, promoting technology transfer and increasing competitiveness in the country.

During this period, there was a significant increase in wages in the regions of Mexico most exposed to globalization. However, only some regions of the country experienced the benefits of this phenomenon.

In rural and not very industrialized areas, globalization caused the disappearance of certain industries, such as corn, in addition to the drop in prices and wages. In these regions, this stage led to an increase in inequality and poverty.

As a consequence, there was a migration flow of the labor force from the rural environment towards export activities. The volume of transfers abroad also increased considerably.

Effects on economics

Globalization and free trade have proven to be important stimuli for the growth of the Mexican economy. Between 1990 and 2000, the country's GDP went from $ 280 billion to $ 680 billion.

Economic development has also benefited from increased foreign investment. Between 1994 and 2005, Mexico received 170.7 billion dollars of foreign investment.

Between 1980 and 2002, the weight of international trade in Mexico's GDP went from 11% to 32%. Increased imports of goods and technology also contributed positively to the economy.

Furthermore, globalization favored the development of Mexican industries and companies. The commercial opening to the outside allowed to boost some of the main industries of the country, such as manufacturing, automotive and electronics.

At the other end of the scale, industries in which Mexico did not have a comparative advantage suffered from expansionary trade policy. The deterioration of the industry brought with it the loss of income, the appearance of situations of poverty and the consequent forced migrations.

Advantages of globalization in Mexico

The globalization of Mexico has generated numerous opinions both for and against. On the one hand, the phenomenon brought with it a series of advantages for the country, among which the most important are:

- Economic growth.

- Development of industries that represent a comparative advantage for the State.

- Increased legal security and improvement of the climate for doing business.

- Less dependence on the domestic economy, and increased integration in international markets.

- Increase in wages, decrease in unemployment and improve the standard of living, especially in the north and central west of the country.

Disadvantages

Globalization has also caused a series of inconveniences for the country, among which the most relevant are:

- Deterioration of industries in which the country did not have a comparative advantage.

- In rural and not very industrialized regions, economic stagnation, worsening working conditions, increased poverty and forced migration phenomena were generated.

- Increase in inequality and unequal distribution of wealth.

- Environmental degradation, especially in the north of the State, due to the increase in the consumption of fossil fuels and the emission of greenhouse gases.

References

1. Center for International Private Enterprise. 2000. Globalization and the Opening of Mexico. Available at: cipe.org
2. Dabat, A. 1994. Mexico and globalization. Mexico: National Autonomous University of Mexico.
3. Davis, M. Globalization and Poverty in Mexico. United States: The National Bureau of Economic Research. Available at: nber.org
4. García Fuentes, M. Foreign Trade Magazine. Available at: revistacomercioexterior.com
5. Hanson, GH 2005. Globalization, labor income, and poverty in Mexico. United States: The National Bureau of Economic Research.
6. Henrichs, K. 2013. Globalization in Mexico, Part 1: Economic and Social Effects. Borgen Magazine. Available at: borgenmagazine.com
7. Henrichs, K. 2013. Globalization in Mexico, Part 2: Environmental Effects. Borgen Magazine. Available at: borgenmagazine.com
8. IM F. 2018. Report for Selected Countries and Subjects. Available at: imf.org