Nafta is limping toward its 20th anniversary with a beat-up image and a bad track record. Recent polls show that the majority of the U.S. people favors “leaving” or “renegotiating” the model trade agreement. While much has been said about its impact on U.S. job loss and eroding labor conditions, some of the most severe impacts of Nafta have been felt south of the border. Nafta has cut a path of destruction through Mexico. Since the agreement went into force in 1994, the country’s annual per capita growth flat-lined to an average of just 1.2 percent — one of the lowest in the hemisphere. Its real wage has declined and unemployment is up.
As heavily subsidized U.S. corn and other staples poured into Mexico, producer prices dropped and small farmers found themselves unable to make a living. Some two million have been forced to leave their farms since Nafta. At the same time, consumer food prices rose, notably the cost of the omnipresent tortilla. As a result, 20 million Mexicans live in “food poverty”. Twenty-five percent of the population does not have access to basic food and one-fifth of Mexican children suffer from malnutrition. Transnational industrial corridors in rural areas have contaminated rivers and sickened the population and typically, women bear the heaviest impact. Not all of Mexico’s problems can be laid at Nafta’s doorstep. But many have a direct causal link. The agreement drastically restructured Mexico’s economy and closed off other development paths by prohibiting protective tariffs, support for strategic sectors and financial controls.
Nafta’s failure in Mexico has a direct impact on the United States. Although it has declined recently, jobless Mexicans migrated to the United States at an unprecedented rate of half a million a year after Nafta. Workers in both countries lose when companies move, when companies threaten to move as leverage in negotiations, and when nations like Mexico lower labor rights and environmental enforcement to attract investment. Farmers lose when transnational corporations take over the land they supported their families on for generations. Consumers lose with the imposition of a food production model heavy on chemical use, corporate concentration, genetically modified seed and processed foods. Border communities lose when lower environmental standards for investors affect shared ecosystems.
The increase in people living in poverty feeds organized crime recruitment and the breakdown of communities. Increased border activity facilitates smuggling arms and illegal substances. After promising to renegotiate Nafta for many of these reasons, the Obama administration is now pushing the Trans-Pacific Partnership. The Pacific pact, which is a regional Nafta-style trade agreement, would grant even greater privileges to transnational corporations and would exacerbate problems for Mexico and other developing countries.
That’s not good for them, and it’s not good for the United States.
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