Ross Perot famously predicted that if Congress passed the North American Free Trade Agreement, we'd hear a "giant sucking sound" as American jobs were exported to our southern neighbor. Not only did that not happen, but American exports to Mexico have jumped. According to an analysis by Howard J. Wall of the Federal Reserve, real U.S. manufactured exports to Mexico rose by 54 percent in the decade after NAFTA passed. All but four states in the U.S. benefited from this export boom.
But those who had hoped the NAFTA would prod Mexicans to modernize their economy were disappointed. Mexico remains among the most corrupt and least efficient nations in the world -- tainted by a yawning gap between the tiny minority of very rich and the rest of the country, particularly the 40 percent who are very poor.
Time and again we've heard rumors that Mexico was going to tackle corruption and improve its judicial system. Outside observers and Mexican reformers alike were elated in 2000 when Vicente Fox's National Action Party defeated the PRI (Institutional Revolutionary Party), which had held authoritarian control for 71 years. At last, it seemed possible that Mexico would begin to tackle its strangling bureaucracy, its rotten police, its corrupt labor unions (who did nothing for labor) and its anti-competitive environment. If Mexico made even modest progress in improving the lives of its citizens, the gusher of illegal migration north would slow.
But as Fredo Arias-King explained in a 2005 article for The National Interest, Fox proved to be a lousy new broom. Instead of sweeping out the PRI officials, Fox kept them on, even hiring operatives from his opponent's campaign to run the Finance Secretariat and his own office, and reaching back to a particularly unsavory PRI official with ties to a deadly extortion attempt in the 1970s as head of the Public Security Secretariat. As for members of Fox's party, the PAN, only 78 received jobs in the new administration.