How has the implementation of NAFTA affected Walmart’s success?
In 1986, Mexico joined GATT to help open its economy to new markets. In 1990 with
additional free trade negotiations with Canada and US taking place, founder Walmart met
with Cifra and Stated 50/50 partnership. This partnership was extremely successful as
they have broken all records.
Prior to 1990, Walmart never move to outside US but now they have developed Walmart
international division in1993. They have expended themselves to 15 countries. Walmart
now have 8000 retail stores worldwide of which 3659 outside US.
They resolved many of the problems by trial and error but emergence of NAFTA help
them very much. As NAFTA reduced tariffs on American goods sold in Mexico from 10
to 3 percent. Perior to NAFTA, Walmart was not a threat for companies like Comerci,
Gigante and Mexican top retailers but once tariffs goes down which removed barriers and
as a result Walmart get opportunity. NAFTA encouraged Mexico to improve its
transporation infrastructure. Benefits of NAFTA are for every company but Walmart use
them most effectively.
To conclude, we can’t say that Walmart itself was nothing its NAFTA who made them.
We can say,
in case of Mexico
, only high tariffs were the hurdle to their winning strategy
everyday low price which is supported by NAFTA.