NAFTA: 20 Years of Regret for Mexico

[xchrom]

http://www.commondreams.org/view/2014/01/04-1


Students taking part in a march against NAFTA. (Photo: David E. Merino/cc/flickr)

It was 20 years ago that the North American Free Trade Agreement between the US, Canada, and Mexico was implemented. In Washington, the date coincided with an outbreak of the bacteria cryptosporidium in the city's water supply, with residents having to boil their water before drinking it. The joke in town was, "See what happens, NAFTA takes effect and you can't drink the water here."

Our neglected infrastructure aside, it is easy to see that NAFTA was a bad deal for most Americans. The promised trade surpluses with Mexico turned out to be deficits, some hundreds of thousands of jobs were lost, and there was downward pressure on US wages – which was, after all, the purpose of the agreement. This was not like the European Union's (pre-Eurozone) economic integration, which allocated hundreds of billions of dollars of development aid to the poorer countries of Europe so as to pull their living standards up toward the average. The idea was to push US wages downward, toward Mexico's, and to create new rights for corporations within the trade area: these lucky multinational enterprises could now sue governments directly before a corporate-friendly international tribunal, unaccountable to any national judicial system, for regulations (eg environmental) that infringed upon their profit-making potential.

But what about Mexico? Didn't Mexico at least benefit from the agreement? Well if we look at the past 20 years, it's not a pretty picture. The most basic measure of economic progress, especially for a developing country like Mexico, is the growth of income (or GDP) per person. Out of 20 Latin American countries (South and Central America plus Mexico), Mexico ranks 18, with growth of less than 1% annually since 1994. It is, of course, possible to argue that Mexico would have done even worse without NAFTA, but then the question would be, why?

From 1960-80 Mexico's GDP per capita nearly doubled. This amounted to huge increases in living standards for the vast majority of Mexicans. If the country had continued to grow at this rate, it would have European living standards today. This is what happened in South Korea, for example. But Mexico, like the rest of the region, began a long period of neoliberal policy changes that, beginning with its handling of the early 1980s debt crisis, got rid of industrial and development policies, gave a bigger role to de-regulated international trade and investment, and prioritized tighter fiscal and monetary policies (sometimes even in recessions). These policies put an end to the prior period of growth and development. The region as a whole grew just 6% per capita from 1980-2000; and Mexico grew by 16% – a far cry from the 99% of the previous 20 years.

[Benton D Struckcheon]

1. Yeah, it may or may not have been a bad deal for the US,

but it was beyond awful for Mexico. It's not like the maquiladoras along the border weren't already exporting to the US. But what the agreement did was to allow crazy nonsense like Citi taking over Banamex. So then what happens? Citi goes kerflooie entirely because of stuff it did in the US, and the Mexicans who held on to their Banamex shares which got converted to Citi shares saw 90% of the value of those shares go up in smoke, along with every Citi shareholder. Banamex itself did nothing that would have made its shares drop by 90%, had they continued to be an independent company.
Point of the story being that Mexico gave up its economic autonomy in the deal, and therefore made its continuing development infinitely harder.
Putting a poor country on the same level as a rich one is the same thing as putting a lightweight boxer in the ring with a heavyweight.

[Laelth]

2. k&r for the truth, however depressing it may be. n/t

-Laelth

[progressoid]

3. Marking this for a later read.

[solarhydrocan]

4. k and r

Original from the Guardian


http://www.theguardian.com/commentisfree/2014/jan/04/nafta-20-years-mexico-regret

[Zorra]

5. Subcomandante Marcos:

We think it is about an inherent contradiction to the process of globalization, one of the essences of the neoliberal model. The elimination of commercial borders, the universality of tele-communications, the information super highways, the omnipresence of the financial centers, the international agreements of economic unity, in short, the process of globalization as a whole produces, by liquidating the nation states, a pulverization of the internal markets. These do not disappear or are diluted in the international markets, but consolidate their fragmentation and multiply. It may sound contradictory, but globalization produces a fragmented world, full of isolated pieces (and often pieces which confront each other). A world full of stagnant compartments, communicating barely by fragile economic bridges (in any case as constant as the weathervane which is finance capital). A world of broken mirrors reflecting the useless world unity of the neoliberal puzzles.

But neoliberalism not only fragments the world it pretends to unite, it also produces the political economic center that conducts this war. And yes, as we referred to before, the financial centers impose their (laws of the market) to nations and grouping of nations, and so we should redefine the limits and reaches pursued by the policy, in other words, duties of political work. It is convenient than to speak of Megapolitics> Here is where the "world order" would be decided.

And when we say "megapolitics" we don't refer to the number of those who move in them. There are a few, very few, who find themselves in this "megasphere". Megapolitics globalizes national politics, in other words, it subjects it to a direction that has global interests (that for the most part are contradictory to national interests) and whose logic is that of the market, which is to say, of economic profit. With this economist (and criminal) criteria, wars, credits, selling and buying of merchandise, diplomatic acknowledgements, commercial blocks, political supports, migration laws, coups, repressions, elections, international political unity, political ruptures and investments are decided upon. In short the survival of entire nations.

The global power of the financial centers is so great, that they can afford not to worry about the political tendency of those who hold power in a nation, if the economic program (in other words, the role that nation has in the global economic megaprogram) remains unaltered. The financial disciplines impose themselves upon the different colors of the world political spectrum in regards to the government of any nation. he great world power can tolerate a leftist government in any part of the world, as long as the government does not take measures that go against the needs of the world financial centers. But in no way will it tolerate that an alternative economic, political and social organization consolidate. For the megapolitics, the national politics are dwarfed and submit to the dict ates of the financial centers. It will be this way until the dwarfs rebel . .

http://flag.blackened.net/revolt/mexico/ezln/1997/jigsaw.html

I've witnessed the Walmaritization of Mexico, firsthand, in increments, since NAFTA came into being, and it makes me sick and sad.

[moondust]

6. .

...some hundreds of thousands of jobs were lost, and there was downward pressure on US wages – which was, after all, the purpose of the agreement. This was not like the European Union's (pre-Eurozone) economic integration, which allocated hundreds of billions of dollars of development aid to the poorer countries of Europe so as to pull their living standards up toward the average. The idea was to push US wages downward, toward Mexico's, and to create new rights for corporations within the trade area: these lucky multinational enterprises could now sue governments directly before a corporate-friendly international tribunal, unaccountable to any national judicial system, for regulations (eg environmental) that infringed upon their profit-making potential.

Parasites engaged in the never-ending search for a more vulnerable host to dominate and feast upon.

[Enthusiast]

7. + a shit load......nt

[Romulox]

8. It also eviscerated the Industrial Midwest. Thanks, Bill Clinton. Thanks, Paul Krugman. nt

[solarhydrocan]

9. ^