My colleague Gabriel Camacho and I wrote this a year ago, timed to coincide with the twentieth anniversary of the North American Free Trade Agreement. With President Obama in China touting a new “free trade” agreement, the Trans-Pacific Partnership, this seemed like a good time to re-post it here. The original article was published in the NH Business Review.
In the twenty years since the North American Free Trade Agreement (NAFTA) went into effect, millions of Mexicans have been pushed by NAFTA to make the dangerous journey across the border into the United States, many without legal authorization. The U.S. government has responded by turning the border into a militarized zone, jailing hundreds of thousands of people, and deporting record numbers back across the border.
Militarization of the border began in 1994 with Operation Gatekeeper, which erected fencing, walls, and other barriers between San Diego, CA and Tijuana, Mexico, forcing migrants into dangerous desert terrain.
This was not supposed to happen.
According to NAFTA’s backers, the agreement was supposed to promote prosperity in both countries and actually reduce the pressure to migrate.
President Bill Clinton asserted NAFTA would give Mexicans “more disposable income to buy more American products and there will be less illegal immigration because more Mexicans will be able to support their children by staying home.”
Mexico’s former President, Carlos Salinas, offered a similar opinion: NAFTA would enable Mexico to "export jobs, not people," he said in a 1991 White House news conference alongside President George H. W. Bush.
William A. Ormes wrote in Foreign Affairs that NAFTA would “narrow the gap between U.S. and Mexican wage rates, reducing the incentive to immigrate.”
So what happened? As a precondition for NAFTA, the U.S. demanded drops in Mexican price supports for small farmers. The agreement itself reduced Mexican tariffs on American products. These changes meant that millions of Mexico’s small farmers – many of them from indigenous communities – could not compete with the highly subsidized corn grown by U.S. agribusiness that flooded the local Mexican market.
Dislodged from the places where their families had lived for generations, many people did in fact seek employment in export-oriented factories and farms. But there were too few jobs to go around, and those jobs that were created did not generate the “disposable income” President Clinton had promised.
A 2008 report on “NAFTA’s Promise and Reality” from the Carnegie Endowment for International Peace concluded that while half a million manufacturing jobs were created in Mexico from 1994 to 2002, nearly three times as many farm jobs were destroyed.
As for Mexican wages, they went down, not up, during the same period. “Despite predictions to the contrary, Mexican wages have not converged with U.S. wages,” Carnegie observed.
Unable to earn a living at home or elsewhere in their own country, Mexicans did what people have done for ages; they packed their bags and headed for places where they thought they could find employment.
The experts shaping NAFTA knew that the deal would disrupt the Mexican agricultural sector. That’s why Operation Gatekeeper was implemented the same year as NAFTA. It’s impossible to integrate national economies without disrupting local ones – something that should give pause to those proposing new trade agreements today. The realities of NAFTA should not be replicated.
As the American Friends Service Committee outlines in “A New Path Toward Humane Immigration Policy,” the U.S. should advance economic policies that reduce forced migration and emphasize sustainable development. Instead of policies like NAFTA that elevate rights of transnational corporations above those of people, we need alternative forms of economic integration that are consistent with international human rights laws, cultural and labor rights, and environmental protections.
Modern-day free trade agreements are basically arrangements that take rights away from citizens and bestow expansive benefits to multi-national corporations.
Workers on both sides of the border have one thing in common: they need the ability to organize for higher wages and decent working conditions. Without the opportunity for workers to benefit from the rewards agreements like NAFTA generate for corporations, “free trade” becomes just another driver of the widening gap between the ultra-rich and everyone else.
With the Obama administration pushing hard to create a new arrangement linking the economies of eleven Pacific rim countries, and another that ties the U.S. economy to that of the European Union, it’s time for a new path.