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BISBEE — Twelve years after it went into effect, has the North American Free Trade Agreement resulted in a “disaster” for our neighbor to the south, or a “positive betterment for both the United States and Mexico?”
Miguel Pickard, an economist with the Chiapas, Mexico-based Centro de Investigaciones Econ—micas y Pol’ticas de Acci—n Comunitaria (Center for Economic Research and Community Action Policy) argued the former point during a talk last Wednesday in Bisbee.
“NAFTA has been touted as a big success, but for the Mexican people, it has been an enormous failure,” he told an audience of approximately 40 people gathered at an event titled “The NAFTA Disaster: Globalization and its effect on immigration.”
 Miguel Pickard, an economist with the Chiapas, Mexico-based Centro de Investigaciones Economicas y Politicas de Accion Comunitaria, speaks on NAFTA at an event last Wednesday in Bisbee. (Photo courtesy of Cecile Lumer) |
Arizona Congressman Jim Kolbe, a major figure in getting the free trade agreement passed by the House of Representatives in 1993, offered a far different analysis at the Border Trade Alliance regional meeting earlier this month in Tucson.
“No, NAFTA is not a failure, and we need to keep repeating that point,” he said. “I think it’s quite clear that the North American Free Trade Agreement has been a positive betterment for both the United States and Mexico.”
Kolbe offered figures showing that the three NAFTA member nations (Canada is the third) had a combined $6 trillion economy at the beginning of 1994. Today, that economy has grown to $12.5 trillion.
“And that’s not just growth in the United States, either,” Kolbe said.
He reported that the overall number of jobs in the U.S. had risen from 110 million to 134 million during the NAFTA era, and that Mexico had seen even greater relative growth — from 32.8 million to 40.6 million jobs.
Pickard, however, argued that while NAFTA’s designers argued it would create jobs by lowering tariffs and increasing the demand for Mexican-made products in the United States, the reality had been far different.
“It was a big lie,” he said. “People knew back then that (job creation) was not going to happen.”
NAFTA, Pickard said, has destroyed more jobs than it has created by forcing Mexicans to compete in an unfair marketplace. He spoke of subsidized U.S. agricultural products — beans, rice, wheat and especially corn — that have flooded the Mexican market and undercut the small, unsubsidized Mexican farmer. And he pointed to a study showing a zero net gain in job creation during the first four years of President Vicente Fox. For every job created, he said, another was lost.
Kolbe acknowledged that agricultural inequalities between the United States and Mexico had been an issue since the free trade agreement was first discussed.
“We knew (about the disparities), and that’s why we delayed the agricultural provisions in the bill and made them the very last thing to go into effect,” he said. “We knew it was going to have an enormous impact on the ejido (communal farming) system.”
But Kolbe said the Mexican government bears the brunt of the responsibility for the problem.
“There are some areas of NAFTA that Mexico has not done a good job preparing for — especially with the preparations for moving people out of the agrarian part of the economy,” he said.
Still, he argued, despite of the bruises to the agricultural sector, NAFTA is still steadily transforming Mexico from an overly agrarian economy to one that is based more on manufacturing and services.
Pickard believes that the types of manufacturing jobs being created in Mexico do not constitute quality employment.
As one example, he spoke of factories that specialize in sorting U.S. supermarket coupons.
“(This type of work) does absolutely nothing for industrialization,” he said. “It just gives some women a $5-per-day job.”
He said that another problem with NAFTA is that its regulations have stripped Mexico of its ability to channel foreign investment capital into certain areas of the economy. He explained that instead of demanding that foreign investors put their money into high-end industries, like steel, NAFTA mandates that such money can go anywhere the investor chooses, such as fast food restaurants.
As for Mexico’s responsibility for correcting its own problems of disparity and investing more in rural development, Pickard points to a continuing transition to democracy that began with Fox’s election in 2000.
“Not to make excuses, but we’re a fledgling democracy,” he said, arguing that Mexico is still not at the point politically or socially where it can adequately promote equality.
Pickard said that when Mexico’s rural poor have no economic opportunity in the countryside, they are confronted with three options: They can move to the cities and look for work in Mexico’s massive informal economy, they can migrate to United States, or they can turn to crime. The informal economy, migration and crime have all grown rapidly during NAFTA, he said.
In terms of the migration phenomena, he sees no solution in any of the current immigration reform proposals under discussion in Washington, which he believes only address the effects and not the causes of immigration.
Kolbe believes the factors influencing Mexican migration to the United States have been numerous, including a peso devaluation in 1994, strong economic growth in the United States during the 1990s, and the recession following the terrorist attacks of Sept. 11, 2001.
But he said that ultimately, an ongoing labor shortage in the U.S. drives the demand for an immigrant workforce. And he feels that the demand can be adequately managed by a comprehensive overhaul of U.S. immigration law that includes a guest worker program.
“NAFTA, unlike other free-trade areas like the EU, does not include a labor element,” he said. “And that is because we could not politically sell a labor element at that time in the United States.
“But now,” he added, “the time has come to address the labor issue.”
Herald/Review reporter Jonathan Clark can be reached at 515-4693 or by e-mail at jonathan.clark@bisbeereview.net.
Joe Hicks wrote on Oct 8, 2007 2:22 PM: