It’s time to talk about NAFTA. It’s always the elephant in the room, que no?
Not enough people account for the economic implications that the North American Free Trade Agreement (NAFTA) has had on Mexico. If bigots want us to go back to our country so bad, maybe they should tell their CEO to get out of it first. Here’s the nitty gritty on how foreign investment has affected the Mexican economy and subsequently, the U.S labor market.
NAFTA is a free trade agreement between the U.S, Mexico and Canada. It basically eliminates tariffs and duties on products traded within the three participating countries. What it did was essentially marry the economies of all three countries together. In the past, we’ve touched on the economic impact that China has had on Mexican artesanias. Now we have to bring NAFTA to the conversation.
The elimination of tariffs also eliminated the possibility of protection from the kind of exploitation that is happening currently. U.S firms have uprooted manufacturing facilities and moved them South of the border, resulting in unfair wages and displacement of unskilled workers in the U.S. Did Mexicans steal your jobs, though? No, not really. Your CEO was just more concerned about the bottom line than he was about your ability to feed your family.
And speaking of feeding families, due to NAFTA pitting corporate U.S farms against smaller family Mexican farms, 2 Million farmers have been forced to abandon ship. Many of these now unemployed farmers illegally immigrate into agricultural work in the U.S out of necessity. The price of food coming in from the North has risen since NAFTA but wages in Mexico only rise at a 1.2 percent annual rate, making it one of the slowest growing economies in Latin America.
Those in the Northern parts of Mexico benefit from the foreign investment. They have the manufacturing jobs now and it’s a steady flow of income. However, the Southern agrarian parts of Mexico receive little to no benefits from this economic state. Essentially, NAFTA has contributed significantly to the growing income gaps in Mexico.
NAFTA is the elephant in the room but it’s important we keep each other informed and confront the elephant.