NAFTA: A CONTINENTAL TRAGEDY

By Anuradha Mittal Reprint | | Print |

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OAKLAND, Jul 1 2006 (IPS) - On June 6, 2006, the Canadian members of parliament from the New Democratic Party and the Bloc Quebecois met with their American and Mexican counterparts to declare that the North American Free Trade Agreement (NAFTA) was a \’\’continental tragedy\’\’, writes Anuradha Mittal, the founder and director of the Oakland Institute. In this article, Mittal writes that the ongoing debate on the fate of some 11 million undocumented immigrants in the US continues to ignore the structural issues that have forced millions to leave their homes. Free-trade agreements like NAFTA promised to bring more jobs, trade surpluses, and an increased standard of living to member countries, but the reality is altogether different. Far from providing a \’\’level playing field\’\’, NAFTA has been a death warrant for small farmers, placing small Mexican farmers at a sharp disadvantage with respect to the US. No fence will be able to take the pressure off of the US border. The country must therefore address a number of simple questions: should the undocumented immigrants be criminalised and our borders walled off, or should we get rid of or renegotiate free-trade agreements? Should we blame the victims of free trade-agreements, or should we ensure that as long as capital and goods can move freely across borders, so can the hungry, the destitute, and the dispossessed?

Recently, the Canadian members of parliament from the New Democratic Party and the Bloc Quebecois met with their American and Mexican counterparts to declare that the North American Free Trade Agreement (NAFTA) was a ”continental tragedy”. The occasion was the second Tri-National Forum on NAFTA and on Deep Integration in North America.

”If it were [a success] there would be no need for the fence that the United States wants to build between the US and Mexican border and there would be no need to militarise it either,” said Mexican legislator Victor Suarez.

The ongoing debate on the fate of some 11 million undocumented immigrants in the United States continues to ignore the structural issues that have forced millions to leave their homes. Free-trade agreements like NAFTA promised to bring more jobs, trade surpluses, and an increased standard of living to member countries, but the reality is altogether different.

Mexico has been growing corn for 10,000 years. Under NAFTA, which was supposed to ”level playing fields”, Mexico opened its markets to imports from the US, including corn. Mexican farmers were unable to compete against US large corn producers, who are the largest single recipient of US government subsidies, receiving USD 10.1 billion per year, about ten times Mexico’s total agricultural budget for 2000. This giant infusion resulted in massive dumping of corn onto the Mexican market by the US in the amount of between USD 105 and USD 145 million annually.

It is therefore not surprising that US corn exports to Mexico have tripled since NAFTA went into effect and account for almost one third of the domestic market, which has caused an acute crisis for the Mexican corn sector. The increase in imports has reduced real prices for Mexican corn by more than 70 percent since 1994. For the 15 million Mexican farmers who depended on the crop, this price drop resulted in dramatic reductions in household income and ultimately caused a significant percentage to leave the land altogether. In 1997, according to Food and Agriculture Organisation (FAO) figures, 47 percent of the population was engaged in agriculture. By 2010, FAO estimates that the number will have dropped to 18 percent.

Far from providing a ”level playing field”, NAFTA has been a death warrant for small farmers, placing small Mexican farmers at a sharp disadvantage with respect to the US.

Proponents of free-trade agreements often point to job creation in Mexico as evidence of NAFTA’s success. However, the US-based Economic Policy Institute (EPI) points out that while the number of low-paying, low-productivity jobs (e.g., unpaid work in family enterprises) grew rapidly since the early 1990s, by 1998 the income of salaried workers had fallen by 25 percent, while the income of the self-employed had declined by 40 percent. The EPI noted that wages decreased by 27 percent between 1991 and 1998, while overall hourly income from labour dropped by 40 percent. In addition, the minimum wage lost almost 50 percent of its purchasing power in the last decade. Manufacturing wages also declined by almost 21 percent in this period. So while NAFTA benefited a few sectors of the economy –mostly maquiladora industries and the very wealthy– it increased inequality and reduced income and job quality for the vast majority of workers in Mexico.

The failure of NAFTA coupled with the failure of the US to remove its trade-distorting subsidies has forced millions of Mexicans to the border. The number of undocumented immigrants from Mexico has increased from 2.5 million in 1995 to 8 million at present. Hoping for better lives, they are willing to risk crossing the border, if only to find slavery in the fields of the US, incarceration at the border, xenophobic legislators, and sometimes even death. In 2005 an estimated 400 Mexicans died trying to cross the border.

However, no fence will be able to take the pressure off of the US border. The country must therefore face a number of simple questions: should the undocumented immigrants be criminalised and our borders walled off, or should we get rid of or renegotiate free-trade agreements? Should we blame the victims of free-trade agreements or should we ensure that as long as capital and goods can move freely across borders, so can the hungry, the destitute, and the dispossessed? (END/COPYRIGHT IPS)