In 1993 the US, under the Clinton administration, negotiated a trade agreement with Mexico and Canada that eliminated tariffs between the three countries. For years the agreement was hailed as a bipartisan success story, proof that two parties can work together to do something good. Now NAFTA is a campaign issue, not because Hillary is touting her association with it. In fact, Hillary Clinton appears to be less than fond of her husband’s legacy.
So what is so bad about NAFTA? Most of the arguments pinpoint Mexico as the scapegoat.
In my next few posts I will debunk an argument against NAFTA. So let’s start with…
1. According to Senator Clinton NAFTA is “continuing to drive hundreds of thousands, even millions, of people from Mexico into our country…”
Ok, seriously? NAFTA does not promote illegal immigration, it makes it less likely. Lets say there are two cities Abcd and Xyz. In Abcd you can be paid $1 per hour for a clerical job, in Xyz you can be paid $10 per hour for the same thing. Everyone who works in clerical jobs will move to Xyz, so that there is a large supply of clerical workers and the wage in Xyz will decrease while the wage in Abcd will increase. Eventually the wages will even out so that clerical jobs pay $5 per hour in Abcd and in Xyz.
Now let’s say that Abcd and Xyz are in different countries, and you can’t move between the two without permission. People from Abcd will still want to move to Xyz in order to take advantage of the higher wages, but they will only move if the new wage minus the cost of moving is greater than the wage they are getting.
NAFTA allows for the growth of industry in Mexico, which will increase demand for labor and increase wages. That means that there is less incentive for Mexicans to immigrate illegally.
-m-
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I think you bring up some good points, I'd like to see the entire argument.
You have some good points about the growth in Mexico but the Nafta Highway is a bad thing to an extent. On the other hand it could bring more illegal immigrants over here. Also by this highway they are trying to connect (or already have) canada and mexico trying to make them "part of the us" this isn't bad but it may lead to some bad blood later. I believe everyone who reads this should look up information on this issue. Not many people know about it and I'm glad you wrote about it.
That's an interesting perspective, but I'm not quite sure it works as well in practice as in theory. Also, I would move out of Xyz based solely on the fact that it is impossible to pronounce :-P
http://www.progressiveu.org/blog/hugogirl46
We still subsidize our agriculture, and Mexico doesn't subsidize theirs to the same extent. Consequently you have a ton of unemployed ag workers coming up here due to unemployment caused by NAFTA. Then, in addition to taking jobs that most Americans won't (like picking tomatoes in the hot Florida sun for 22 cents per 20 gallon bucket) they start to take other jobs, and they take the jobs for less money then an American laborer might want (hint: it's below minimum wage). This drives down wages for jobs like construction, and while it helps the propertied upper middle class in rapidly developing states like Colorado, as well as the people running the construction companies, it harms everyone who isn't in one of those two groups.
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"We cannot redeem evil, we must combat it." -- Jean Paul Sartre
I'd have to say that is more of an argument against ag subsidies than against NAFTA.
-m-
NAFTA was supposed to be about free trade but in fact it is all about distorted trade. NAFTA by itself is not so bad but when it is combined with our ridiculous agricultural subsidies it has been devastating for Mexico's third world agricultural economy.
And we just keep kicking them in the teeth again and again. Of course it contributes to illegal immigration.
First, as you noted, our highly subsidized corn had a devastating impact on their small family farms who could not compete with our low prices. Millions of agricultural workers particularly in the poorest states in Southern Mexico like Oaxxacca were displaced. And they have been streaming north ever since.
And now more recently, our ridiculous ethanol subsidies that have been pushed on us by an unholy alliance of environmentalists and big corn have caused the price of corn to double or triple making life miserable for poor people living in cities in Mexico who are coping with massive food inflation. And because the corn tortilla is the staff of life in Mexico this food inflation is far more devastating then the food inflation we are getting here.
Of course big agriculture is not terrible unhappy with this situation because all these illegal aliens mean cheap labor while the social costs of all these illegal aliens fall on the taxpayers. So essentially they are tripple dipping: ag subsidies, ethanol subsidies and cheap labor subsidies. And of course the taxpayers take a triple screwing. And the poor in both countries take the hardest hit while wealth gets transferred to the wealthy.
The problem is really Ag subsidies and not NAFTA but the two go hand in hand because American agricultural policy did not screw up Mexico until it was combined with NAFTA.
NAFTA with Ag Subsidies = the new slavery.