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When Congress was considering the North American Free Trade Agreement (NAFTA) in 1993, Ross Perot, a prominent business owner (and third-party candidate for president in

When Congress was considering the North American Free Trade Agreement (NAFTA) in 1993, Ross Perot, a prominent business owner (and third-party candidate for president in 1992) argued that it would do no good for the USA to engage in trade with Mexico, since Mexicans, according to Perot, had incomes that were too low to allow them to afford American goods. Thus, he claimed, trade between the two countries would simply be in one direction with low-wage Mexicans producing and sending cheap goods into the USA but no producers in the USA being able to sell anything to Mexicans.

Economically speaking (applying trade theory), is the scenario thatPerot described what actually happens in trading relationships?

Please explain in details.

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