Foreword 9
1. Economic premises behind trade integration 15 1.1. Trade integration: notion and forms 15
1.1.1. Definitions of trade integration 15
1.1.2. Forms of integration according to Balassa 18
1.1.3. Forms of integration according to the WTO classification 21 1.2. Integration: premises and drivers 23
1.3. Effects of integration of countries at a different level of economic development under conditions of perfect competition 24
1.3.1. Internal and external comparative advantage 27 1.3.2. Multi-product comparative advantage 29 1.3.3. Income divergence and convergence 31
1.4. Effects of integration in conditions of imperfect competition 35 1.5. Summary 37
2. Origins and main provisions of NAFTA 39 2.1. Origins 39
2.2. NAFTA: objectives, principles, and institutions 47
2.3. Trade in goods: liberalisation and control mechanisms 49 2.3.1. General regulations 50
2.3.1.1. National treatment and market access for goods 50 2.3.1.2. Rules of origin 53
2.3.1.3. Technical barriers to trade 55 2.4. Investment and services 56
2.4.1. Investment 57 2.4.2. Services 59
2.4.2.1. Telecommunications and financial services 60 2.4.2.2. Temporary entry for business persons 61 2.5. Summary 62
3. Trade effects of Mexico’s membership in NAFTA 65 3.1. Overview of empirical studies 65
3.2. Impact of trade agreements on Mexico’s foreign trade: a study using the gravity model 71
3.2.1. Description of a gravity model 71
3.2.2. Results of estimations and descriptive statistics 78
3.3. Shifts in Mexico’s foreign trade flows after the establishing of NAFTA 88 3.3.1. Changes in Mexico’s exports 97
3.3.2. Changes in Mexico’s imports 111 3.4. Summary 124
Conclusion 125 Afterword 127 Bibliography 129
List of figures 135 List of tables 137 Appendices 139
