NAFTA: A Retrospective

NAFTA at Thirty: Lessons for the EU-Mexico Trade Relationship from Dr Jorge Castañeda

The Council of the European Union's decision on 14 July 2026 to conclude the Interim Agreement on Trade (ITA) between the European Union and Mexico represents the most substantial development in bilateral trade relations since the initial EU-Mexico Global Agreement entered into force a quarter of a century ago. Negotiated over more than a decade, the modernised framework illustrates a wider shift in international trade policy, one increasingly formed not only by market liberalisation but also by strategic resilience, supply-chain security and geopolitical competition.

Nevertheless, understanding the significance of this new agreement requires looking beyond its individual provisions. It also requires comprehending the historical experience that fundamentally transformed Mexico's economic model and reconfigured its place within the global economy. Thirty years after the North American Free Trade Agreement (NAFTA) came into force, the questions surrounding its origins, ambitions and legacy remain remarkably relevant. How can governments credibly anchor economic reform? Can international agreements permanently constrain domestic policy? To what extent can trade liberalisation deliver broader political and social transformation? These are questions that continue shaping trade policy well beyond North America.

To explore these issues, I spoke with Dr Jorge Castañeda Gutman, former Secretary of Foreign Affairs of Mexico and Professor of Politics and Latin American and Caribbean Studies at New York University. Drawing on his experience as both a senior policymaker and one of Mexico's leading political thinkers, Dr Castañeda reflected on the economic circumstances that gave rise to NAFTA, the strategic judgments behind the Salinas administration's reforms, the emergence of Mexico's technocratic policymaking class, the consequences of the 1994 peso crisis, and the political evolution of Mexico's relationship with North American economic integration. Although our discussion was not about the newly concluded EU-Mexico Interim Agreement itself, his reflections convey valuable historical perspective to understand how Mexico approaches economic integration today.

NAFTA Was Designed to Solve a Credibility Crisis

NAFTA is often remembered as a landmark free trade agreement. While technically accurate, this description understates the strategic problem that Mexico's leadership was attempting to solve.

According to Dr Castañeda, the origins of NAFTA lie not in a philosophical devotion to free trade, but in the collapse of Mexico's previous development model during the debt crisis of the 1980s. By the end of that decade, policymakers had concluded that external borrowing would no longer provide the capital required to modernise the economy. The restructuring of Mexico's foreign debt in 1989 failed to restore confidence or generate sustainable investment, leaving President Carlos Salinas de Gortari's administration searching for an entirely different development strategy.

The immediate catalyst was the disappointing outcome of that debt restructuring. While the renegotiation eased short-term financial pressures, it failed to convince investors that Mexico had solved its fundamental economic problems. According to Dr Castañeda, Salinas and his economic team recognised that the country could no longer depend upon cycles of sovereign borrowing followed by periodic debt renegotiation. If Mexico was to achieve prolonged growth, it would require a fundamentally different source of capital. The government therefore shifted its focus from international lending towards attracting long-term foreign direct investment, denoting a decisive break with the country's previous development model.

Rather than relying upon international credit markets, the government sought to attract long-term foreign direct investment. The challenge, however, was credibility. Investors required assurance that Mexico's programme of economic liberalisation would survive future changes of government and would not simply be reversed once political circumstances changed.

This was the strategic function that NAFTA ultimately served.

Dr Castañeda explained that Salinas accepted President George H. W. Bush's proposal for closer economic integration after recognising that debt renegotiation had reached its limits. Discussions between the two leaders in Houston in 1988 offered considerably more than the prospect of a conventional trade agreement. They provided a mechanism through which Mexico could replace dependence on foreign creditors with sustained industrial investment tied to the North American market. Rather than asking international banks to finance development, Mexico would encourage multinational firms to build factories, establish supply chains and manufacture goods inside Mexico with guaranteed access to American consumers. The agreement offered something that financial markets alone could not: a legally binding international framework capable of embedding Mexico's economic reforms within North American institutions. Instead of asking investors to trust successive Mexican governments, NAFTA provided an external guarantee that access to the United States market would remain stable and predictable.

In effect, Mexico was exporting political credibility alongside manufactured goods.

The governments of Miguel de la Madrid and Carlos Salinas had already begun restoring macroeconomic discipline through tighter fiscal management and greater monetary stability. Dr Castañeda drew an important distinction between the two administrations. De la Madrid concentrated on stabilising an economy that had been shaken by repeated crises, restoring fiscal discipline and rebuilding confidence in Mexico's macroeconomic management. Salinas inherited those foundations but recognised that macroeconomic stability alone would not persuade manufacturers to relocate production unless investors also had certainty that access to the American market would remain secure. NAFTA therefore represented the logical extension of De la Madrid's stabilisation programme. Stable public finances reduced macroeconomic risk, while guaranteed access to the United States reduced political risk. Together they converted Mexico into a far more appealing location for long-term manufacturing investment.

Importantly, this strategy also coincided with developing American interests. During the 1980s, the United States faced increasing worries about the international competitiveness of its manufacturing sector as Japanese and other Asian producers expanded rapidly across global markets. Integrating Mexico into North American production networks offered American firms opportunities to restructure supply chains, cut production costs, and strengthen regional competitiveness. The agreement therefore addressed complementary strategic objectives on both sides of the border. Mexico sought capital, technology and industrial investment, while the United States sought a more competitive regional manufacturing base. NAFTA was not simply a concession granted by Washington or an appeal made by Mexico; it reflected a convergence of strategic economic interests.

Mexico's Economic Ambition Reached Beyond Trade

Dr Castañeda's reflections also illustrate that NAFTA formed part of a much broader vision for Mexico's long-term development.

At roughly the same time that Mexico pursued NAFTA, the government also sought membership of the Organisation for Economic Co-operation and Development (OECD). At first glance, the decision appeared incongruous. During the early 1990s, the OECD remained widely regarded as a club of advanced industrial economies, while Mexico was still confronting the consequences of repeated financial crises and remained far from achieving developed-country living standards. Yet, according to Dr Castañeda, that symbolism was precisely the point. Membership reflected where Mexico intended to position itself rather than where it currently stood. Salinas' administration viewed integration into prominent international institutions as a signal of long-term strategic ambition. NAFTA and OECD membership were therefore complementary rather than separate initiatives, each strengthening the message that Mexico intended to become a stable, outward-looking industrial economy capable of competing alongside the world's developed states.

This ambition extended well beyond increasing exports. Policymakers believed closer integration with North America would enable Mexico to escape what would later become known as the middle-income trap by attracting sustained industrial investment, transferring technology and raising productivity. Growth was not expected to remain concentrated in the export-oriented northern states. Rather, the expectation was that investment would gradually spread through central Mexico and eventually into the country's poorer southern regions, creating a wider process of national development driven by manufacturing and inclusion into North American supply chains. Whether those expectations were fully realised remains open to debate, but Dr Castañeda emphasised that this long-term developmental objective sat at the heart of Mexico's strategy.

Whether those ambitions were ultimately realised is still debated. However, understanding them is essential because they demonstrate that NAFTA was never conceived simply as a trade agreement. It formed part of a wider national strategy directed at transforming Mexico's economic model, repositioning the country within the global economy and embedding that transformation within durable international institutions.

Selling NAFTA and Overselling It

One of the most revealing aspects of Dr Castañeda's account concerns the political narratives that surrounded NAFTA during its negotiation. Contrary to common assumptions, he argued that the agreement required relatively little political persuasion within Mexico itself. By the beginning of the 1990s, much of the country's political and economic leadership had already accepted that the debt crisis had exposed fundamental weaknesses in Mexico's existing development model. The principal political battle therefore took place not in Mexico City, but in Washington, where congressional approval depended upon persuading American lawmakers and the wider public that NAFTA would serve broader United States interests.

According to Dr Castañeda, this fundamentally shaped how the agreement was presented. In Mexico, NAFTA was largely discussed as an economic strategy designed to restore investment, modernise industry and integrate the country into North American production. In the United States, however, supporters increasingly portrayed it as a solution to a much wider range of bilateral challenges. Advocates argued that closer economic integration would transform Mexico into a prosperous developed economy, reduce migration, weaken organised crime and narcotics trafficking, and ultimately address many of the structural problems affecting the bilateral relationship.

Dr Castañeda argued that these claims were politically useful but strategically misleading. NAFTA was never designed to resolve migration, eliminate organised crime or transform Mexico into a First World economy within a generation. Its purpose was considerably narrower but no less significant: creating the institutional certainty necessary to attract long-term investment and embed economic reform. By presenting the agreement as a remedy for problems extending far beyond trade policy, its supporters created expectations that no commercial agreement could realistically satisfy.

This distinction helps explain why NAFTA's political legacy later became so contested. Judged against its actual objectives, the agreement substantially succeeded. Foreign direct investment increased, manufacturing expanded, exports grew rapidly, and Mexico became deeply integrated into North American supply chains. Judged against promises that it would eliminate migration, dismantle organised crime or fundamentally transform Mexico's social and economic structure, disappointment became almost inevitable. As Dr Castañeda suggested, much of the criticism aimed towards NAFTA reflected unrealistic political expectations rather than failures of the agreement itself.

The experience remains relevant for decision makers today. Modern trade agreements continue to attract political narratives that extend well beyond their actual scope. Governments frequently present commercial agreements as solutions to questions of security, migration, technological competition or political rivalry. While trade policy undoubtedly affects these issues, Dr Castañeda's reflections serve as a reminder that agreements should ultimately be evaluated according to the problems they were designed to solve rather than those politicians later claim they will resolve.

The Rise of the Technocrats: Reform as Strategy Rather Than Ideology

The economic transformation that culminated in NAFTA was inseparable from the emergence of a new generation of Mexican policymakers. During the 1980s, economists, finance officials and public administrators gradually displaced the revolutionary nationalist tradition that had dominated the Institutional Revolutionary Party (PRI) for decades. Commonly described as the tecnócratas, they are often portrayed as having simply imported American free-market ideas into Mexican policymaking. Dr Castañeda offered a considerably more nuanced interpretation.

He acknowledged that the intellectual climate associated with what later became known as the Washington Consensus undoubtedly influenced this generation. Many of the architects of Mexico's reforms had studied at leading American universities and were familiar with contemporary debates concerning liberalisation, privatisation and macroeconomic stability. Those ideas shaped how policymakers understood the country's economic problems and the range of policy tools available to address them.

Yet Dr Castañeda cautioned against interpreting Mexico's reforms simply as an ideological import from Washington. The debt crisis had fundamentally altered the country's economic circumstances. Years of financial instability, repeated currency crises and unsuccessful debt restructuring convinced much of the Mexican political establishment that the previous development model had become unsustainable. Liberalisation therefore did not emerge because policymakers wished to imitate foreign economic theories, but because they believed Mexico's existing model could no longer deliver sustained growth.

This distinction is important because it reframes the motivations behind NAFTA. Rather than representing an ideological conversion to free-market economics, the agreement reflected a pragmatic response to organisational constraints. The central objective was to secure investment, restore confidence and create a more durable basis for economic development. In that sense, the technocrats were less ideological reformers than strategic problem-solvers attempting to respond to an unprecedented economic crisis.

The broad acceptance of that diagnosis also explains why support for economic liberalisation spread beyond a relatively small group of foreign-educated economists. By the early 1990s, many within Mexico's political establishment had accepted that some form of structural reform was unavoidable. The principal debate increasingly concerned how reform should be institutionalised and protected rather than whether it should occur at all. According to Dr Castañeda, NAFTA ultimately became the principal mechanism through which those reforms were embedded within an international legal framework.

Shielding Reform Through International Commitments

If attracting investment represented the immediate objective, preserving reform represented the longer-term challenge.

One of Dr Castañeda's most important observations was that NAFTA was deliberately designed to protect Mexico's economic reforms from future political reversal. Domestic legislation can always be amended or repealed by subsequent governments.

International treaty obligations are considerably more difficult to abandon because doing so carries considerable diplomatic, legal and economic consequences. NAFTA therefore functioned not only as a trade agreement but also as an institutional mechanism intended to lock in Mexico's new economic direction.

Dr Castañeda described this objective as "shielding the reforms". Rather than asking investors to trust that future governments would voluntarily maintain market-oriented policies, Mexico embedded many of those principles within a legally binding agreement negotiated with the United States and Canada. This substantially boosted investor confidence by decreasing the perceived political risk associated with long-term manufacturing investment. Companies considering factories, supply chains or large capital commitments could be more confident that preferential access to the North American market would survive changes of government in Mexico.

Looking back more than three decades later, Dr Castañeda offered a balanced assessment of this strategy. In his view, it proved partly true and partly false. The agreement undoubtedly made it much more difficult for subsequent administrations to dismantle Mexico's economic integration with North America. At the same time, governments retained considerable freedom to pursue interventionist policies in other areas while formally remaining within the treaty framework. The institutional "straitjacket" constrained governments without eliminating policy divergence.

USMCA subsequently tightened those constraints even further. Dr Castañeda noted that the updated agreement introduced more detailed obligations in strategically important sectors such as energy, electricity and mining, making it increasingly difficult for future governments to reverse aspects of earlier liberalisation without risking disputes with their North American partners. While Mexico retained considerable room to pursue domestic policy priorities, the legal framework governing economic integration became more comprehensive than under the original NAFTA.

The durability of this institutional framework is perhaps one of NAFTA's most significant legacies. Successive Mexican governments have disagreed profoundly over the appropriate role of the state in the economy. Yet, none has chosen to abandon the system of economic integration established during the early 1990s. For Dr Castañeda, that continuity demonstrates that NAFTA ultimately succeeded in addressing the credibility problem it was originally designed to solve.

The Peso Crisis and the Distortion of NAFTA's Early Legacy

Few major international agreements have experienced worse political timing than NAFTA.

The agreement entered into force on 1 January 1994. Within months, Mexico was engulfed by the peso crisis, one of the most severe financial crises in its modern history. However, the crisis resulted primarily from domestic macroeconomic imbalances, fiscal overspending and the sharp devaluation of the peso rather than from NAFTA itself; the proximity of the two events fundamentally shaped public perceptions of the agreement.

Dr Castañeda recalled that the devaluation severely undermined confidence within the private sector. Investment slowed, uncertainty increased, and businesses delayed expansion plans as financial markets reacted to the crisis. Although the causes of the turmoil lay elsewhere, many Mexicans inevitably associated the country's deteriorating economic conditions with the newly implemented trade agreement. The coincidence proved politically damaging because NAFTA entered public consciousness at precisely the moment confidence in the wider economy was collapsing.

The immediate effect was a sharp deterioration in private-sector confidence. International investors questioned Mexico's short-term stability, while many domestic firms postponed investment decisions until financial conditions improved. For policymakers, this created an unfortunate paradox. The agreement had been negotiated to strengthen investor confidence over the long term, yet its introduction coincided with a crisis that temporarily produced the opposite impression. As a result, the benefits of NAFTA were initially obscured by macroeconomic instability unrelated to the agreement itself.

Consequently, political support remained limited throughout 1994 and 1995 despite the agreement playing little role in causing the crisis. Only as the economy gradually recovered, exports accelerated, and foreign investment increased did perceptions begin to shift. Over time, businesses and policymakers increasingly distinguished between the temporary financial crisis and the structural changes that NAFTA had introduced into Mexico's economy.

Dr Castañeda's assessment presents a broader lesson for policymakers implementing major economic reforms. Structural reforms are rarely judged solely on their own merits. Their political fortunes often become intertwined with unrelated economic or political events occurring during implementation. A sound reform introduced during a period of crisis may struggle to gain public support, while a weaker policy implemented during favourable economic conditions can receive disproportionate credit. NAFTA's early political reception demonstrates how timing can shape the perceived success of even the most consequential economic agreements.

From Political Controversy to National Consensus

Perhaps the clearest indication that NAFTA achieved its principal strategic objectives lies in the remarkable durability of political support that eventually emerged around it.

According to Dr Castañeda, once the economic benefits of North American integration became increasingly visible, support expanded across almost every major centre of influence within Mexican society. Political elites broadly accepted the agreement. The business community strongly supported it. Much of academia likewise concluded that integration with North America had become a permanent feature of Mexico's economic development. While disagreements remained over specific policies, relatively few influential voices continued advocating a fundamental reversal of the country's economic opening.

This emerging consensus reflected more than the growth of exports or foreign investment. It also reflected the palpable impact that integration had upon the everyday lives of ordinary Mexicans. Dr Castañeda observed that trade liberalisation changed consumer markets in ways that are often overlooked in macroeconomic analysis. Large sections of Mexico's lower and middle classes gained access to a much wider range of consumer goods that had previously been scarce, expensive or simply unavailable. These changes provided visible evidence that economic integration was affecting daily life rather than remaining an abstract policy debate confined to economists and politicians.

He illustrated this point with a memorable example. Jokingly referring to peanut butter, Dr Castañeda argued that, for many ordinary Mexicans, the arrival of affordable American supermarket products ultimately proved more politically significant than debates surrounding sovereignty or cultural Americanisation. Improvements in living standards, increased consumer choice and greater access to goods often carried greater political weight than ideological arguments for or against globalisation. The practical consequences of integration became more persuasive than the theoretical debates that had dominated its negotiation.

This evolution helps explain why NAFTA gradually moved from being one of Mexico's most controversial public policies to becoming one of its most enduring. Governments changed. Political parties alternated in office. Economic priorities shifted. Yet the broad consensus supporting North American economic integration remained largely intact. As Dr Castañeda's reflections suggest, this durability reflected the cumulative effect of investment, employment, industrial development and improvements in consumer welfare rather than any single economic indicator.

By the early twenty-first century, the central political debate had therefore changed. The principal question was no longer whether Mexico should remain economically integrated with North America. Instead, successive governments increasingly debated how that integration should be managed, how its benefits should be distributed and how much room remained for pursuing more interventionist national economic policies within the framework instituted by NAFTA.

USMCA, López Obrador and the Limits of Economic Nationalism

The election of Andrés Manuel López Obrador in 2018 appeared, at least initially, to present the most major challenge yet to the economic model established under NAFTA. Having spent decades criticising aspects of Mexico's neoliberal reforms, López Obrador entered office pledging a stronger role for the state, greater public investment and increased national control over strategic sectors. Many observers therefore anticipated a decisive break with the liberal economic consensus that had formed Mexican policy since the early 1990s.

Instead, according to Dr Castañeda, Mexico's approach proved considerably more complex. López Obrador ultimately accepted the renegotiation of NAFTA into the United States-Mexico-Canada Agreement (USMCA), recognising that continued preferential access to the American market remained indispensable to Mexico's long-term economic prosperity. President Donald Trump's repeated threats to terminate NAFTA undoubtedly created profound uncertainty during the negotiations, yet preserving tariff-free access to the United States remained one of the Mexican government's overriding strategic priorities.

This represented a major political moment. A president elected on a platform critical of many aspects of Mexico's economic liberalisation nevertheless chose to defend the institutional framework underpinning North American integration. For Dr Castañeda, this demonstrated the extent to which NAFTA had reshaped Mexico's strategic outlook. Governments might disagree profoundly over taxation, public ownership or industrial policy, but very few were prepared to jeopardise privileged access to Mexico's largest export market.

USMCA did more than preserve the original agreement. As Dr Castañeda observed, it strengthened legal disciplines governing strategically important sectors including energy, electricity and mining, further limiting the scope for future governments to reverse aspects of Mexico's economic opening without creating disputes with their North American partners. The institutional constraints originally established by NAFTA therefore became more detailed and, in several respects, more robust.

The Return of Economic Nationalism

Yet the continued existence of USMCA has not prevented Mexican governments from pursuing more interventionist economic policies. Rather than abandoning North American integration, López Obrador's administration sought to expand the role of the state while remaining formally within the treaty's legal framework. Public investment increased, state-owned enterprises assumed greater prominence, and successive governments sought to reassert public authority over sectors regarded as strategically important to national development. As Dr Castañeda observed, governments have found ways to undertake what he described as "crazy things" while remaining inside the institutional "straitjacket" created first by NAFTA and subsequently reinforced through USMCA.

According to Dr Castañeda, this evolution illustrates the limits of using international agreements to permanently determine domestic economic policy. Trade agreements can constrain governments, increase the costs of reversing liberalisation and establish clear legal obligations. They cannot eliminate political disagreement over the appropriate role of the state or prevent governments from pursuing interventionist objectives within the space that those agreements continue to permit. The result has been an ongoing process of adaptation rather than outright reversal.

This has been particularly visible in strategic sectors. Successive Morena administrations have sought greater public involvement in energy policy, expanded the role of state-owned enterprises and reasserted stronger governmental influence over infrastructure regarded as central to national sovereignty. Rail provides one clear example of this broader approach. Rather than challenging North American economic integration directly, the government has selectively expanded state control over strategically important infrastructure while remaining committed to the broader framework created by USMCA. For Dr Castañeda, this demonstrates that contemporary Mexican economic policy is characterised less by rejecting economic integration than by redefining the balance between markets and the state within its existing institutional constraints.

Dr Castañeda also highlighted what he regarded as one of the defining contradictions of Morena's approach. During its years in opposition, the movement frequently criticised what it viewed as the excessive Americanisation associated with the NAFTA era and expressed concern about the extent of United States influence over Mexican affairs. Once in government, however, it largely accepted the economic architecture established by NAFTA and preserved through USMCA while continuing to reject what it regarded as political interference from Washington.

He described this as an inherently contradictory, almost schizophrenic, approach to North American integration. Economically, Mexico remains deeply dependent upon privileged access to the United States market. Manufacturing exports, cross-border supply chains and foreign investment continue to underpin much of the country's economic growth. Politically, however, successive Morena administrations have sought to reinforce narratives centred on sovereignty, national autonomy and resistance to external influence. The result is not a rejection of economic integration, but an attempt to separate economic interdependence from political dependence. These two objectives coexist in an uneasy but durable equilibrium that increasingly defines Mexico's contemporary relationship with the United States.

This tension extends beyond Mexico. Across many middle powers, governments increasingly seek to preserve the commercial benefits of globalisation while simultaneously expanding their room for independent domestic policymaking. Economic openness and political autonomy are no longer viewed as naturally complementary objectives in the way they often were during the immediate post-Cold War period. Instead, governments are increasingly attempting to maximise the benefits of international economic integration while limiting its perceived political consequences.

A Different Trading Environment

Although Mexico has largely preserved its commitment to North American integration, the international environment surrounding that integration has changed fundamentally since NAFTA was negotiated. During the early 1990s, policymakers broadly assumed that international trade would become progressively more liberalised. Expanding supply chains, declining tariffs and deeper economic interdependence were widely viewed as the natural direction of the global economy. That assumption shaped both NAFTA and many of the trade agreements that followed it.

According to Dr Castañeda, that world no longer exists. One of the defining changes of the past decade has been the collapse of the assumption that preferential access to major markets is politically permanent. Donald Trump's first presidency demonstrated that even one of the world's most significant trade agreements could be reopened and fundamentally renegotiated. More importantly, the emergence of the "America First" agenda challenged the belief that tariff-free North American trade represented an irreversible feature of the regional economy. As Dr Castañeda succinctly observed, the era in which governments could simply assume "no tariffs" has effectively come to an end.

For Mexico, this represents a more profound strategic change than the transition from NAFTA to USMCA itself. The legal framework governing trade remains largely intact, but the political assumptions underpinning that framework have shifted. Future Mexican governments can no longer assume that preferential market access will remain insulated from domestic political debates in Washington. Instead, access to the United States market has become a recurring political issue, influenced by broader discussions surrounding industrial policy, migration, national security and strategic competition.

This shift is not unique to North America. Around the world, governments increasingly evaluate trade policy through the lenses of economic security, technological competition and geopolitical resilience rather than economic efficiency alone. Critical minerals, semiconductor production, advanced manufacturing, energy security and strategic supply chains have become central components of commercial diplomacy. Trade agreements are now expected not only to liberalise markets but also to strengthen resilience, protect strategically important industries and support wider geopolitical objectives.

What Mexico's Experience Means for Europe

These broader changes help explain why modernising the EU-Mexico trade relationship required almost a decade of negotiations. As Dr Castañeda observed, the length of those negotiations reflected far more than technical complexity. Both parties were attempting to update an agreement negotiated for a fundamentally different international economy. Issues that occupied relatively little attention during the 1990s, including energy security, strategic industries and state intervention, have become central features of contemporary trade policy. In Dr Castañeda's assessment, much of that modernisation proved both necessary and worthwhile, particularly regarding the treatment of energy and other strategically important sectors.

The contrast between NAFTA and the modernised EU-Mexico agreement illustrates how profoundly international trade has evolved over the past three decades. NAFTA emerged from an era characterised by optimism about globalisation, market liberalisation and expanding economic interdependence. Today's agreements are negotiated in a world defined by geopolitical competition, fragmented supply chains, industrial policy and renewed concerns over economic sovereignty. Contemporary trade agreements must therefore perform functions that extend well beyond reducing tariffs. They increasingly seek to balance openness with resilience and commercial integration with strategic autonomy.

Nevertheless, Dr Castañeda's reflections suggest that one lesson from Mexico's experience remains remarkably durable. Trade agreements are rarely transformative in isolation. They can encourage investment, strengthen institutional credibility and create the stability required for long-term economic planning. They cannot substitute for effective domestic governance, sound macroeconomic management or coherent national economic strategy. Nor can they resolve political tensions that ultimately lie beyond the scope of commercial policy.

NAFTA did not make Mexico a developed country. It did not eliminate regional inequality, end migration or resolve debates surrounding sovereignty and national identity. What it did achieve was something both more modest and, arguably, more enduring. It solved a credibility problem. By embedding Mexico's economic reforms within a binding international framework, it provided the institutional certainty required to attract sustained investment, anchor cross-border manufacturing and fundamentally reshape the country's economic trajectory. More than three decades later, every Mexican administration, regardless of ideology, has ultimately chosen to preserve that framework, even while pursuing markedly different domestic policies.

As the European Union and Mexico begin implementing their modernised trade relationship, that experience offers an important lesson. The lasting success of a trade agreement depends not simply on the provisions negotiated by governments, but on whether it creates sufficient credibility for businesses to invest, innovate and plan for the long term. In an increasingly fragmented global economy, that challenge remains as relevant today as it was when Mexico first turned to North American integration more than thirty years ago.