Top Leaderboard, Site wide
November 24, 2014
Truthdig: Drilling Beneath the Headlines
Sign up for Truthdig's Email NewsletterLike Truthdig on FacebookFollow Truthdig on TwitterSubscribe to Truthdig's RSS Feed

Get Truthdig's headlines in your inbox!


Bronze Age Lost Its Cutting Edge Before Climate Crisis




Joan of Arc


Truthdig Bazaar
Acting Together: Performance and the Creative Transformation of Conflict  Vol. II

Acting Together: Performance and the Creative Transformation of Conflict Vol. II

Edited by Cynthia E. Cohen, Roberto Gutiérrez Varea and Polly O. Walker
$21.95

Ulysses

Ulysses

By James Joyce

more items

 
Report

After 20 Years, NAFTA Leaves Mexico’s Economy in Ruins

Email this item Email    Print this item Print    Share this item... Share

Posted on Jan 9, 2014
AP/Ivan Pierre Aguirre

Post-NAFTA Mexico, 20 years later: American companies such as Applebee’s, Burger King and Smartmart line the street in Ciudad Juarez in December.

By Sonali Kolhatkar

Twenty years ago, on Jan. 1, 1994, a trade deal championed by Democratic President Bill Clinton went into effect. The North American Free Trade Agreement was meant to integrate the economies of the United States, Canada and Mexico by breaking down trade barriers among them, creating jobs and closing the wage gap between the U.S. and Mexico.

What in fact happened under NAFTA was that heavily subsidized U.S. corn flooded the Mexican market, putting millions of farmers out of work. Multinational corporations opened up factories creating low-wage jobs at the expense of organized labor and the environment. This, in turn, drove waves of migration north.

Meanwhile, corporate profits soared, and Mexico boasted the richest man in the world, Carlos Slim. Walmart and Krispy Kreme conquered Mexico, and ordinary Mexicans had access to the same consumer goods as their neighbors to the north. The economies of all three nations, measured only by GDP rather than jobs or wages, were pronounced grand successes, even though the U.S. and Canada disproportionately reaped more financial benefits.

Meanwhile, in the U.S., manufacturing jobs fell dramatically and organized labor lost even more clout. The Great Recession of 2008 worsened the downward trend, especially for Mexicans. Mexico’s economy, tied intimately to the U.S.’ because of NAFTA, suffered more than any other country in Latin America.

News reports on NAFTA’s anniversary point out that as a result of the free trade agreement, Mexicans today can buy designer sneakers or iPhones. Manuel Perez-Rocha, an associate fellow at the Institute for Policy Studies in Washington, D.C., and a Mexican national, told me in an interview, “This is a new spin—praising the riches of consumerism. All these new analyses about how Mexico is becoming a more middle-class society and able to buy more products from the United States—it’s just baloney. According to official statistics from Mexico, most Mexicans are poor and belong to the lower class, and this is the reason why there has been so much migration to the United States.”

Advertisement

Square, Site wide
Coinciding with NAFTA was one of the biggest waves of migration from Mexico to the U.S., which slowed only in recent years. Perez-Rocha asserted that, “The fact is that most Mexicans are jobless, or have very difficult job conditions, or are underemployed, and so the push for migration continues. Most of the routes by which people would migrate from Central America and Mexico to the United States have been severed by violence, and by the ‘narcos’ [drug lords], sometimes with the complicity of the Mexican migration authorities.”

Even analysts who tout the economic benefits of NAFTA to all three member countries acknowledge that Mexico has benefited less than its neighbors to the north. Perez-Rocha confirmed that, saying, “During NAFTA, Mexico has had the slowest rate of economic growth than [with] any other previous economic strategy since the 1930s. From 1994 to 2013, Mexico’s gross domestic product per capita has grown at a paltry rate of 0.89 percent per year.” Additionally, “During NAFTA, Mexico’s economy grew much slower than almost every Latin American country. So to say that NAFTA has benefited the Mexican economy is also a myth. It has boosted trade and investment, but this has not translated into meaningful growth that generates jobs. One of the problems that NAFTA has generated is basically an exporting economy for transnational corporations, not for the Mexican industry per se.”

It turns out that not only did NAFTA, “flood Mexico with imported corn and cheap grains from the United States,” but “it also destroyed Mexico’s own industries,” according to Perez-Rocha.

Having grown up in Mexico, the analyst reminisced, “Before NAFTA, I still remember how my father would take me to different industries in which Mexico would manufacture its own tractors and buses. We had an industry that was completely dismantled to give way to bigger corporations from the United States to use Mexico as an assembly plant for exporting cars back to the United States. And this hasn’t produced the boom of jobs that was promised.” Perez-Rocha concluded, “So in the end what NAFTA did was destroy the Mexican national industry and destroy a lot of jobs.”


New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.

 
Monsters of Our Own Creation? Get tickets for this Truthdig discussion of America's role in the Middle East.
Right 1, Site wide - BlogAds Premium
 
Right Skyscraper, Site Wide
Right 2, Site wide - Blogads
 
Join the Liberal Blog Advertising Network
 
 
 

A Progressive Journal of News and Opinion   Publisher, Zuade Kaufman   Editor, Robert Scheer
© 2014 Truthdig, LLC. All rights reserved.

Like Truthdig on Facebook