Certain effects from more trade seem to be clear in Mexico. By far, the most evident and crucial benefit has been greater consumer welfare, the ultimate end of any economic policy. The reduction of trade barriers has provided the Mexican consumer with a wider variety of higher-quality goods at lower prices, many of them completely unavailable when the economy was closed.
In view of the incomplete economic adjustments during the post bubble distress, we fully realize that the malfunction of financial intermediation impedes the resource allocation mechanism in the financial markets. With weak balance sheets, banks tend to continue lending unprofitable businesses and leave them existing. Such lending policy hampers the factor reallocation to more profitable businesses.