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NAFTA and Other “Free Trade” Agreements

Salvador Sandoval M.D.  |  Issue: September 2014
The mass migration of children

The mass migration of children from Honduras, El Salvador, Guatemala y Mexico is a reality check for all: while there’s hunger, violence and repression these refugee children will keep coming.
PHOTO: Irineo Arzate Mujica

 

Part of the immigration debate largely ignored in the traditional media is the impact of the North American Free Trade Agreement (NAFTA) of 1993, and the alphabet soup of so-called “free trade agreements—CAFTA, FTAA, TPP which have developed since then. Understanding their impact goes far toward explain why immigrants are flocking to the United States, as well as why our politicians have been so reluctant to talk about it. Then President Bill Clinton, a Democrat, was instrumental in the passage of NAFTA.

The promise of NAFTA was that it would increase the standard of living of Mexican workers leading to the creation of a stable “middle class” that could afford to buy U.S .made products, thus increasing jobs on both sides of the border. It was promoted as a “win-win” situation for everyone. It was claimed that Mexicans would no longer have to leave their country in search of work in the U.S.

The reality of the situation has proven far different. First of all, the immediate impact in Mexico was to cause the loss of up to 2 million farm jobs. Peasant farmers lost their livelihoods because the corn they produced could not compete with mid West corn harvested with mechanical harvesters, which flooded the market. Under provisions of NAFTA the U.S. farmers benefitted from a 40% U.S. subsidy, tariff free, while the Mexican farmers lost down from 33.2% subsidy by the Mexican government to 13.2%. In addition, 28,000 small businesses in the cities were unable to compete with U.S. giants such as Wal-mart.

Among the first stirrings of resistance was the Zapatista Uprising of January 1, 1994. The Zapatistas based in the state of Chiapas were protesting a change in the Mexican Constitution Article 27 which allowed for privatization of once public lands by U.S. oil companies and other multinational corporations. The ejidos (plots of land) in Chiapas sit on suspected oil-rich sites, as does much of Guatemala. As a consequence of the suppression of the Zapatistas and the unfair competition with mid West corn, 50,000 Chiapanecos migrate to the U.S. every year.

Initially, 1.3 million jobs were created in Mexico’s cities, particularly on the border, to the degree that up to 30% of the workforce at one time worked in the maquiladoras (duty & tariff free assembly plants). The wages however, were 10 times lower than in the U.S. Since its inception, employment in the maquiladoras in Mexico has been losing ground to even cheaper labor costs in Asia, Central America, and more recently to labor replacing technology.

For the U.S. worker, the results of NAFTA have like-wise been disastrous. Up to a million mostly manufacturing jobs have been lost, shipped to Mexico and other low labor areas. The very threat of moving has dampened efforts to increase wages in the U.S. Displaced workers in the U.S. have had to relocate internally searching for jobs. 38,000 small farmers have lost their farms since NAFTA’s inception, causing a concentration such that 2% of U.S. farms control 50% of all sales.

NAFTA provided investors guarantees by insuring low labor costs, eliminating protective tariffs and quotas, allowing unrestricted exploitation of Mexico’s land and mineral reserves, as well as decimating environmental and health protections. It guaranteed working people on both sides of the border nothing. Displaced workers from Mexico flocked to the cities and then to the United States. Once self-sufficient, Mexico has to import corn for tortillas as its agricultural resources are geared to export.

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