The Mexican peso crisis struck in late December 1994, coinciding with a
new Mexican administration and the end of the first year of the North
American Free Trade Agreement (NAFTA). The crisis poignantly highlighted
the success and the inadequacy of the treaty--success in the expansion
of trade and capital flows, and inadequacy in institutional capacity.
The Canadian, Mexican, and US governments defined the agreement so
narrowly that they failed to devise a mechanism that could monitor,
anticipate, plan, or even respond to such a serious problem. The
president of Mexico, Vicente Fox, has boldly proposed transforming the
free trade area into a common market like Europe's.
In this visionary study, Robert A. Pastor seizes Fox's idea and maps out
the paths toward making it a reality. He analyzes NAFTA's successes and
shortcomings, extracts lessons from the European Union's 40 years of
reducing disparities between rich and poor countries, and proposes ways
that NAFTA can adapt and incorporate those lessons. The centerpiece of
the book is a detailed proposal for new institutions and "North American
plans" for infrastructure and transportation, immigration and customs,
and projects aimed at lifting the poorer regions. This book is the first
to propose a detailed approach to a North American Community--different
from the European Common Market but drawing lessons from its experience.
It will be of considerable interest to policymakers as well as
researchers and students of international political economy, world
trade, and foreign affairs.
