Friday, January 10, 2014

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

Sonali Kolhatkar
TruthDig
 
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 between 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.”

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