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Tuesday, April 16, 2024

Latin Americanisms: ÑAFTA

A lot can change in 20 years; conversely, very little can change in 20 years.

As we look back on two decades of the North American Free Trade Agreement — which recently turned 20 on Jan. 1 — it would seem that a qualifier might be in order: a lot has changed for the worse, and very little has changed for the better.

The scope of NAFTA, while large, can be pared down to some basic tenets. Its primary function as a trade agreement between the U.S., Canada and Mexico was and continues to be the breakdown of trade barriers between the three nations. It attempted to accomplish this primarily through the easing — and in many cases the outright elimination — of trade tariffs and import quotas. The much hoped-for outcome of these reforms — by policymakers on all sides — was a gradual but decisive implementation of neoliberalism (better known in the U.S. as liberal democracy) amid the promise of all the goodies that come with it.

The goal of NAFTA from a Mexican perspective was simple: the fostering and maintaining of economic growth. The promise delivered to the Mexican people by Mexican lawmakers was one of stability in a country known for instability, equality in a country known for inequality and political honesty in the land known for la mordida (the bribe).

However, since NAFTA’s implementation, the Mexican economy has registered one of the lowest growth rates in all of Latin America; a reality all the more troubling given the tremendous economic growth seen in many other nations of the region (chief among them Brazil). Growth has stalled — ironically enough — in large part because of the increased interdependence of the three economies in a time of U.S. economic decline.

In certain cases Mexico did end up taking advantage of the opportunities NAFTA afforded. The automotive and high tech sectors grew considerably; foreign banks moved in, easing access to much needed credit lines; but a majority of Mexicans saw little benefit in their daily lives.

While there is undoubtedly a larger middle class today, Mexico is the only major Latin American country where poverty has grown in recent years. Socially, the promise that NAFTA would accelerate Mexico’s much vaunted entry into the “First World” is belied by data like that recently published in a World Bank report, according to which the proportion of Mexicans in poverty compared to the total population is now as high as it was two decades ago: 52 people out of every 100.

Recent calls by Mexican officials for the need to reformulate NAFTA allow for, and indeed necessitate, a popular and critical reexamination of the inequitable and damaging nature that was present in the agreement from the start. In macroeconomic terms, the figures are compelling.

At the time of NAFTA’s signing, Mexico’s trade balance showed a surplus of more than $500 million. This same balance showed a deficit of more than $2 billion in the first half of this year. In these 20 years, imports of grains and oilseeds have increased from 8.8 million tons in 1993 to 29 million in 2012, an increase which has served to not only destroy a significant part of Mexico’s productive infrastructure, but has also increased unemployment among the Mexican agricultural class and has directly contributed to the mass exodus of Mexican workers to the U.S.

Over the past two decades, this trade agreement has resulted in a number of disastrous consequences for many of Mexico’s most important industries. It has caused profound damage in various sectors of the Mexican national economy, and has, contrary to its stated goals, weakened the domestic economy as a result of the unfair terms under which it was signed.

Several voices spoke out to warn us; the Zapatista uprising in Chiapas was violently put down because of the truths that were exposed by such an action. There was nothing healthy about bare-boned competition. Mexico had no business going toe to toe with the U.S. economy, and as such, this was never the mutually beneficial agreement we were sold — one which its proponents claimed sought nothing more than North American integration.

If you are in any way unhappy with JORGE JUAREZ and his adherence to the free trade of ideas you can lodge a formal complaint at jnjuarez@ucdavis.edu.

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