Since its implementation in 1994, NAFTA has been at the center of controversy. Its critics point out that it affected key sectors of the Mexican national industry, such as agriculture, because it generated an increase in the entry of US agricultural products into the national market that competed with national products. As well as the massive loss of jobs generated in the maquiladora sector in the US, because many companies now prefer to install their assembly plants attracted by cheap labor and geographical proximity. And these factories make huge profits from these advantages.[14][15].
The Treaty, due to its magnitude, has generated benefits for the countries, but also economic damage in some sectors. According to different analyzes, the level of extreme poverty in Mexico has risen rapidly since the implementation of the agreement in 1994, going from 16% to 28% only in the first five years. Five million farmers abandoned their lands, raising urban unemployment in Mexico and increasing the migration of farmers to the US, generating political pressure on the US government and much criticism of the Mexican government.[16].
The increase in migratory flows responds to various causes, one of them is that Mexico has had problems maintaining economic growth and this, in turn, has not allowed the conditions for the generation of formal jobs to arise; which results in an increase in the number of people engaged in informal employment. Thus, the difference in salaries in Mexico compared to those in the US becomes greater and the interest of Mexicans in going to work in the neighboring country becomes more frequent.[17].
Another aspect of the immigration issue is that:
With the signing of NAFTA, Mexico considerably increased its exports, mainly to the United States. There was an increase from 31.1 to 94.6 million dollars only in the period from 1991 to 1998, becoming the second trading partner of the American Union. According to the World Bank, Mexico's exports between 1994 and 2003 would have been 25% lower without the treaty.[19] However, this caused commercial dependence on a single destination to increase.[20].
The treaty has not achieved dynamic growth of the Mexican economy, but it has made Mexico become more dependent on the North American economy. Before and after the processes of signing NAFTA, FDI [Foreign Direct Investment] flows to Mexico came and come mainly from the United States, 61.5% of the total FDI in the period 1980-1993, and 51.6% of the total for the period 1994-2012 (...), although the origin of the investment was diversified, the country continues to be dependent on what happens with the North American economy.[21].
Another problem that arises with Foreign Direct Investment is that it widens inequality between federal entities. The most important investments are made where there is greater productive infrastructure, since companies require efficient communication routes, so that there is rapid mobility and for their goods to circulate. Example: Mexico City, Nuevo León, State of Mexico and Chihuahua. On the other hand, the entities that have received the least FDI are: Chiapas, Tlaxcala, Zacatecas, Oaxaca, etc., which are those with less developed infrastructures.[22].
In Mexico, the sector of the productive apparatus that has benefited has been very limited and corresponds to that which is linked to "innovation and technological modernization, while the other part, which is the vast majority of economic units, have low productivity and capacity to absorb technological change.[23].
Prior to the Treaty, Mexico supported exports in the oil sector. Later, with economic liberalization, exports were no longer expressly of oil, but also of manufactured products such as: automobile parts, computers, electrical equipment, among others. However, the problem was that development did not cover all productive activities in Mexico. Yes, there were sectors with a greater presence in international markets, but others retreated.[24].
It was assumed that, by opening up to foreign direct investment and expanding exports, such economic dynamism would be generated in Mexico that it would make it possible to reduce the difference between Mexican and American GDP per capita. However, the opposite occurred.[25].
Regarding the legal field:
(…) The clause or principle that becomes the norm of national treatment of NAFTA, together with the ordinary provisions established in Mexico, broke and continue to break with the constitutional order, since it is the Constitution that has been adapted to the Treaty, and is not to the Constitution, as the official voices of the time 1992-1994 propagated (…)[26].
The president of the United States of America for the Republican Party "Republican Party (United States)"), Donald Trump, announced during the election campaign that he would seek to renegotiate the free trade agreement with the government of Mexico and that, if he did not reach an agreement satisfactory to the country's interests, his government could withdraw from NAFTA.
Mexico has also warned that it could leave NAFTA if it fails to obtain greater benefits in the renegotiation, in response to President Donald Trump, who would soon begin renegotiating NAFTA with Canada and Mexico. President Enrique Peña Nieto announced a trade diversification plan with other countries, which includes negotiating bilateral pacts with other countries in the world.
In September 2018, it was announced that the United States, Mexico and Canada had reached an agreement to replace NAFTA with the United States-Mexico-Canada Agreement (USMCA or USMCA).