The Mexican Crisis and the Weakness of the NAFTA Consensus

Mexico's financial crisis placed in jeopardy one of the major fundamentals of the North American Free Trade Agreement (NAFTA): the liberalization of financial markets. In the United States, the Mexican crisis threatens to destroy the legitimacy of a so-called Washington consensus, whereby economic liberalization, privatization, and free trade became a panacea to Latin American economies, especially those like Mexico's. In spite of this major crisis, a new consensus seems to be emerging between Washington and the Mexican government, namely, that the Mexican crisis has no connection with NAFTA and that NAFTA is operating according to the major purpose for which it was created: the opening of markets. This article reviews the weakness of this new NAFTA consensus that seems to be shared by Mexico and Washington, and comments on the major institutional challenges that NAFTA has provoked in Mexican society.