Most Americans view NAFTA, the North American Free Trade Agreement, as a pioneering force in economics and diplomacy that would benefit every country involved. However, this neo-liberal agreement often causes more harm than good. The goal of NAFTA is to make international trade more accessible between Canada, Mexico and the United States. NAFTA was implemented in 1994 and shaped the entire formation of budding economies in Mexico.
Up until the 1980’s, America had used a fairly protectionist economic system. These protections included tariffs on imported goods and import quotas. NAFTA got rid of these protectionist policies which benefited the United States and Canada, though injured Mexico. The United States and Canada were both economically successful enough to benefit from removing these protectionist measures. Banning tariffs on imported goods gave Americans more access to cheaper goods; 2001 "Journal of Economic Perspectives" found that NAFTA was a net benefit to the United States.
Recommended for you
But how did America become economically stable enough to benefit from NAFTA? Through the exact protectionist measures that NAFTA gets rid of. America implemented a protectionist system in the wake of The Great Depression, then once the country was wealthy enough, these measures were scrapped to allow access to cheap, outsourced, production. America’s biggest export markets are Canada and Mexico, so naturally increased access to these countries would benefit the U.S.
Though the U.S. has seen benefit from NAFTA, including a 13 percent increase in sales in the Texan clothing and metal industry, Mexican workers have been severely hurt by this agreement. With the ban on tariffs, the U.S. was able to sell cheap grain and meat to Mexico. Though this may sound good, the Mexican agriculture industry could not compete; NAFTA encouraged the Mexican government to drop their farm subsidies, thus leaving Mexican farmers unemployed. So 1.3 million agricultural jobs were lost in Mexico as a result of tariff bans via NAFTA.
NAFTA also includes a program that allows U.S. corporations to hire Mexican workers to work in assembly plants near the border. This program sounds like a productive and collaborative effort to increase employment, but in reality, this program exploits Mexican workers. NAFTA does not include any labor rights in this program and thus Mexican laborers are paid cheap wages and have no protections as far as working conditions, health protections, or maximum hours. This program was supposed to help close the income gap between Mexican and American families, as promised by NAFTA, though since NAFTA went into effect, the Mexican income increased 1.2 percent annually, far slower than Chile, Peru and Brazil.
So what does NAFTA mean for immigration? If NAFTA had been successful in increasing wages in Mexico, then migration into the U.S. from Mexico most likely would have slowed. Because NAFTA is so unsuccessful in improving wages and employment for the average Mexican employee, many are forced to seek employment in the United States. “The main thing that would have stemmed the flow of people across the border was a rapid increase in wages in Mexico,” said Dani Rodrik, an economist and trade specialist at Harvard’s John F. Kennedy School of Government. “And that certainly has not happened.”
Just months after NAFTA went into effect, Mexico saw what is now called “the peso crisis.” The Mexican government could not afford to improve domestic infrastructure, which further upset the Mexican economy.
Overall, Mexico was greatly harmed by the effects of NAFTA. The United States saw a fair economic boost from the agreement, but not nearly enough improvement to justify stunting the Mexican economy. In recent elections, candidates have concerned themselves with renegotiating or even repealing NAFTA, though most officials do not consider how NAFTA affects migration. The lack of action is taken to improve NAFTA is not only dangerous to the North American economy, but the global economy as NAFTA remains the template for international trade agreements.
