Wednesday, March 26

Looking at NAFTA and the illusion of free trade

“Free Trade” in its name sounds like a great idea. It’s an effective euphemism used to promote investors’ rights over those of the employees and the environment. Since the ratification of NAFTA it has had precisely that effect. There is a reason that Barack Obama and Hillary Clinton alter their rhetoric whenever visiting states like Michigan and Ohio. It is estimated that since NAFTA was passed the net impact has been a loss of 900,000 American jobs primarily in manufacturing states such as these. Not only has it resulted in the loss of jobs but it has restricted the sovereignty of local economies and encouraged the growth of sweatshop labor along the USA/Mexico border. Trade isn’t inherently bad, and in fact when the concerns of workers and the environment are considered then trade is great. Unfortunately in agreements like NAFTA they are not. Prior to NAFTA, trade agreements primarily dealt with cutting tariffs and lifting quotas. NAFTA is not free trade. It contains 900 pages of one-size-fits-all rules to which each nation is required to conform all of its domestic laws. That doesn’t sound very free, does it?

NAFTA limited inspection and safety standards of food sold in grocery stores, raised medicine prices due to patent laws, increased sprawl and toxic industries, and eliminated preferences for spending tax dollars on United States-made products or locally-grown food. NAFTA is not a “free trade” agreement, it is an investment agreement. Its core provisions grant foreign investors new rights and privileges that promote relocation of factories and jobs and the privatization and deregulation of essential services, such as water, energy and health care. According to right-wingers not regulating business to, for instance, require the production of safe products is a great policy to follow.

The important thing to remember is that trade deals like NAFTA and CAFTA affect the countries with which we sign, not simply our own. The damaging effects of NAFTA are most intense in Mexico. At the urging of agribusiness interests the United States urged changing the Mexican constitution to allow wealthy businesses to purchase the constitutionally guaranteed land plots of poor farmers. This has caused thousands of Mexican families to lose their livelihoods and migrate to Mexican cities. When unable to find work in these overcrowded cities, they risk their lives crossing our southern border. As was predicted by opponents of NAFTA, the agreement has caused a sharp increase in illegal immigration to the United States because of the loss of jobs in Mexico.

NAFTA promotes illegal immigration by destroying the Mexican agricultural economy. The vast majority of immigrants from Mexico originate from rural areas. These two concepts for some reason never seem to make it into news reports about illegal immigration or NAFTA. Common sense dictates that in order to risk one’s life to potentially become a fugitive in a foreign country all other avenues must be just as gloomy. Since the ratification of NAFTA, life in rural Mexico has gotten increasingly gloomier. Between 1994 and 2003 the Mexican minimum wages and contractual wages lost 20 percent and 19 percent of their purchasing power. Wages and benefits in the manufacturing sector dropped nine percent. Workers in United States affiliates operating in Mexico earn 75 percent less than their counterparts in U.S. affiliates in Canada while the ratio of Mexican to United States manufacturing wages (in U.S. dollars) remains unchanged at $ 2.10. Income distribution has worsened during the NAFTA years. Today, 70 percent of Mexico’s population lives below the poverty line and 40 million Mexicans are estimated to live in extreme poverty. 60 percent of indigenous children suffer severe malnutrition.

The price index of basic food staples increased by 257 percent between 1994 and 2002. According to La Jornada, between 1994 and 2001 real prices for corn (a major agricultural staple) for Mexican farmers, adjusted for inflation and peso devaluation, dropped by more than 43.4 percent. Agricultural employment in Mexico was at about 8.1 million prior to NAFTA. By 2006 this numbers was 6 million. The loss of agricultural jobs is consistent with a major population shift from Mexico’s rural countryside to both United States and Mexican cities. From 1980 to 1994, migration from rural Mexico to the U.S. increased by 95 percent. By 2002, migration to the U.S. from rural Mexico was 452 percent higher than in 1980. The cost of environmental degradation is calculated at 10 percent of GDP per year, which is higher than Mexican economic growth. Between 1990 and 1999 the land area covered by forest fell from 32 percent to 28 percent, while carbon dioxide emissions per capita grew from 3.7 to 3.9 metric tons. Because of NAFTA the Mexican government cut its overall investment in agriculture by 90 percent in the first seven years of NAFTA as well as its farm support payments by more than half. Remember these numbers when you hear a wealthy television talking head talking about “aliens” stealing “our jobs.”

It’s fairly obvious that U.S. agribusiness has no problem with this policy as they are the main beneficiaries of it. Because of NAFTA they are more easily able to buy Mexican agribusiness, move American farms to Mexico, pay lower wages, ignore environmental standards and grow richer all at the expense of the average working person. They are also among the largest employers of illegal immigrants. For example, Swift & Company had to shut down 100 percent of its beef production and 77 percent of its pork production following the high-profile immigration raids in 2007 that resulted in the arrest of 1,282 workers. In February 2007, Smithfield Packing Co., the largest U.S. hog processor, had to shut down its North Carolina plant after hundreds of workers left their jobs or refused to come to work to protest a crackdown on undocumented immigrants. This isn’t coincidence, it’s certain companies exploiting NAFTA at both ends.

No issue can be discussed in a vacuum. Illegal immigration, economic well being, health, and environmental issues are all intertwined. We as citizens should demand to have a president who is committed to helping the average citizen prior to wealthy agribusiness interests. Maybe we could elect someone who has the crazy idea of investing in AMERICAN goods and agriculture. No I think that makes too much sense.

Copyright: The Retriever Weekly

1 comment:

Anonymous said...

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