Many us firms chose not to produce in mexico despite the


Ross Perot added his memorable "insight" to the debate over the North American Free Trade Agreement (NAFTA) when he warned that passage of NAFTA would create a "giant sucking sound" as U.S. employers shipped jobs to Mexico, where wages are lower than wages in the United States. As it turned out, many U.S. firms chose not to produce in Mexico despite the much lower wages there. Explain why it may not be economically efficient to move production to foreigh countries, even ones with substially lower wages.

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International Economics: Many us firms chose not to produce in mexico despite the
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