Jeff Faux (The Nation): NAFTA at 10

From The Nation
Issue of February 2
Posted online Thursday January 15

NAFTA at 10

en years ago, the North American Free Trade Agreement was sold to the people of the United States, Mexico and Canada as a simple treaty eliminating tariffs on goods crossing the three countries' borders. But NAFTA is much more: It is the constitution of an emerging continental economy that recognizes one citizen--the business corporation. It gives corporations extraordinary protections from government policies that might limit future profits, and extraordinary rights to force the privatization of virtually all civilian public services. Disputes are settled by secret tribunals of experts, many of whom are employed privately as corporate lawyers and consultants. At the same time, NAFTA excludes protections for workers, the environment and the public that are part of the social contract established through long political struggle in each of the countries.
As Jorge Castañeda, Mexico's recent foreign secretary, observed, NAFTA was "an accord among magnates and potentates: an agreement for the rich and powerful...effectively excluding ordinary people in all three societies." Thus was NAFTA a model for the neoliberal governance of the global economy.
The business-backed politicians who pushed the agreement through the three legislatures promised that NAFTA would generate prosperity that would more than compensate "ordinary" people for its lack of social protections. Foreign investors would make Mexico an economic tiger, turning its poor workers into middle-class consumers who would then buy US and Canadian goods, creating more jobs in the high-wage countries.
But as soon as the ink was dry on NAFTA, US factories began to shift production to maquiladora factories along the border, where the Mexican government assures a docile labor force and virtually no environmental restrictions. The US trade surplus with Mexico quickly turned into a deficit, and since then at least a half-million jobs have been lost, many of them in small towns and rural areas where there are no job alternatives.
Meanwhile, Mexico's overall growth rate has been half of what it needs to be just to generate enough jobs for its growing labor force. The NAFTA-inspired strategy of export-led growth undermined Mexican industries that sold to the domestic market as well as the sixty-year-old social bargain in which workers and peasant farmers shared the benefits of growth in exchange for their support for a privileged oligarchy.

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