IESET.
Hypotheses·trade·trade_lib_nafta_1994_mexico_manufacturing_employment

NAFTA (effective 1994-01-01) raised Mexican manufacturing value-added and merchandise-export intensity over the 1994-2007 pre-China-shock window relative to a synthetic-control pool of Latin American non-NAFTA economies.

The Heckscher-Ohlin / Krugman-style claim is that bilateral preferential access to the US market combined with rules-of-origin-driven supply-chain integration shifted Mexico's tradeable-sector composition toward manufacturing exports faster than its non-NAFTA peers. Wage and aggregate-employment effects are documented to be small and heterogeneous; the cleaner first-order signal is on manufacturing-sector value-added share and goods-export intensity.

SUPPORTEDengine/runs/trade_lib_nafta_1994_mexico_manufacturing_employment

SUPPORTED — sign matches claim +, mean_gap=+3.33, |gap|/pre_sd=31, p_perm=0.0769

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

When countries open more of the economy to trade and competition, do people end up with better long-run income or productivity outcomes?

plain answer

The data clearly moved in the predicted direction. sign matches claim +, mean_gap=+3.33, |gap|/pre_sd=31, p_perm=0.0769

why it matters

This matters because trade claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 13 country or place units from 1985 to 2007, using a synthetic control design.

what was measured
What changed
  • Nafta indicator
What we checked
  • Log manufacturing value added
  • Merchandise exports pct income
  • Trade openness pct income
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

0 input datasets, 0 unresolved missing series, provenance status: no input vintages recorded.

Results

engine/runs/trade_lib_nafta_1994_mexico_manufacturing_employment
1007550250198519962007MEXARGBRACHLCOLCRIDOM
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show log_manufacturing_value_added across 13 sampled countries over 1985–2007.
The shapes above are stylised — none of the lines are real data.
Placeholder for trade_lib_nafta_1994_mexico_manufacturing_employment. Published chart will be generated from engine/runs/trade_lib_nafta_1994_mexico_manufacturing_employment/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-05-15T20:30:49Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

NAFTA (effective 1994-01-01) raised Mexican manufacturing value-added and merchandise-export intensity over the 1994-2007 pre-China-shock window relative to a synthetic-control pool of Latin American non-NAFTA economies. The Heckscher-Ohlin / Krugman-style claim is that bilateral preferential access to the US market combined with rules-of-origin-driven supply-chain integration shifted Mexico's tradeable-sector composition toward manufacturing exports faster than its non-NAFTA peers. Wage and aggregate-employment effects are documented to be small and heterogeneous; the cleaner first-order signal is on manufacturing-sector value-added share and goods-export intensity.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if both (a) the SC gap on log manufacturing value-added is positive and persistent (>=5% gap by 2000) AND (b) the SC gap on merchandise-exports-share-of-GDP is positive and persistent (>=3 percentage points by 2000). PARTIAL if (b) holds but (a) does not — exports rose but production did not deepen, consistent with maquila-shell critique. REFUTED if Mexico under-performs the synthetic control on both metrics.

formal test & threshold
test:      synthetic_control_mexico_vs_latam_donor_pool
threshold: PRIMARY: SC_gap(log_manufacturing_va, 2000) >= 0.05 AND SC_gap(merchandise_exports_share, 2000) >= 0.03. INFORMATIVE: placebo permutation p-value < 0.10.

Method

Template
synthetic_control
Clustering
country
Sample
13 countries · 1985 – 2007
Evidence type
causal

Synthetic-control estimator for Mexico against a Latin American donor pool of non-NAFTA middle-income economies. Pre-treatment fitting window 1985-1993; post-treatment evaluation 1994-2007. Placebo permutation test across the donor pool reports p-values. Robustness: drop the 1994-1995 Tequila-crisis years from the post-window to ensure the synthetic gap is not devaluation-driven.

Data

VariableSourceTransform
log_manufacturing_value_added
outcome
world_bank_wdi:NV.IND.MANF.KDtier 2
log
merchandise_exports_pct_gdp
outcome
world_bank_wdi:TX.VAL.MRCH.CD.WTtier 2
share_of_gdp
trade_openness_pct_gdp
outcome
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
nafta_indicator
treatment
constructed:indicator = 1 for MEX from 1994 onward; 0 elsewheretier 5
indicator
log_gdp_pc_pretreatment
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log_level_at_treatment_minus_1
investment_share
control
world_bank_wdi:NE.GDI.TOTL.ZStier 2
level
real_effective_exchange_rate
control
imf:REERtier 2
log

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — trade_lib_nafta_1994_mexico_manufacturing_employment

Verdict: SUPPORTED — sign matches claim +, mean_gap=+3.33, |gap|/pre_sd=31, p_perm=0.0769

Pre-registration

  • Claim: NAFTA (effective 1994-01-01) raised Mexican manufacturing value-added and merchandise-export intensity over the 1994-2007 pre-China-shock window relative to a synthetic-control pool of Latin American non-NAFTA economies. The Heckscher-Ohlin / Krugman-style claim is that bilateral preferential access to the US market combined with rules-of-origin-driven supply-chain integration shifted Mexico's tradeable-sector composition toward manufacturing exports faster than its non-NAFTA peers. Wage and aggregate-employment effects are documented to be small and heterogeneous; the cleaner first-order signal is on manufacturing-sector value-added share and goods-export intensity.
  • Falsification rule: SUPPORTED if both (a) the SC gap on log manufacturing value-added is positive and persistent (>=5% gap by 2000) AND (b) the SC gap on merchandise-exports-share-of-GDP is positive and persistent (>=3 percentage points by 2000). PARTIAL if (b) holds but (a) does not — exports rose but production did not deepen, consistent with maquila-shell critique. REFUTED if Mexico under-performs the synthetic control on both metrics.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: MEX
  • event_year: 1994
  • n_donors: 12
  • donor_weights (top): {'GTM': 0.75, 'COL': 0.158, 'HND': 0.0921, 'ARG': 0.0, 'BRA': 0.0}
  • pre_rmse: 3.3737362464139067
  • pre_period_sd: 0.10833605362780394
  • mean_post_gap: 3.330220783494018
  • end_period_gap: 3.2494505142745425
  • post_period_years: [1994, 2007]
  • placebo_p_value: 0.07692307692307693
  • n_placebos: 12
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:NV.IND.MANF.KD → log_manufacturing_value_added (outcome, n=8624)
  • world_bank_wdi:TX.VAL.MRCH.CD.WT → merchandise_exports_pct_gdp (outcome, n=14446)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness_pct_gdp (outcome, n=10714)
  • constructed: indicator = 1 for MEX from 1994 onward; 0 elsewhere → nafta_indicator (treatment, n=299)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_pc_pretreatment (controls, n=14066)
  • world_bank_wdi:NE.GDI.TOTL.ZS → investment_share (controls, n=10428)

Generated by scripts/run_synth_did.py at 2026-05-15T20:30:49+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Pre-2008 evaluation window is deliberate — the post-2001 China WTO-accession shock is the single largest confound for any NAFTA evaluation, and treating it as part of the NAFTA effect would conflate two separate trade shocks.

Authored framework. Read the transparency note.