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  • NAFTA an 'Engine of Poverty' for Mexico, Fuels Immigration
    Posted On: Aug 01, 2016

    By JoAnne Powers, August 2, 2016:

    When the Clinton Administration was selling the North America Free Trade Agreement to the public, it painted a picture of an economic miracle both north and south of the border, that would stem the flow of undocumented immigrants into the United States.  In reality, the opposite has happened.  Manuel Perez-Rocha, an Associate Fellow at the Institute for Policy Studies in Washington, D.C., describes NAFTA as an “engine of poverty” for Mexico:

    [Manuel Perez-Rocha]: “What NAFTA has done to Mexico is basically to destroy millions of rural livelihoods.  NAFTA promised that the agricultural sector in Mexico would grow so much that illegal immigration into the United States would decline.  However, since 1994, the year that NAFTA was enacted, employment of the total economically active population in the countryside has fallen, and more than six million rural people have had little choice but to emigrate to the cities or to the U.S.”

    Arthur Stamoulis, executive director of Citizen’s Trade Campaign, explains the mechanics:

    [Arthur Stamoulis] “Mexico was flooded with corn and other grains from the United States under NAFTA.  And you have to ask yourself: land is less expensive in Mexico, labor is less expensive in Mexico, corn is a native plant to Mexico, people have been growing it there for millennia…why on Earth under NAFTA would the U.S. would be exporting corn to Mexico and not the other way around, and of course the reason for that is that the agricultural sector in the United Sates is highly taxpayer subsidized, so that middlemen are able to buy and sell corn in the United States for less than what it actually cost the farmers to grow it.”

    Flooding the Mexican market with cheap, subsidized corn has pushed literally millions of small farmers off their land in Mexico:

    [Arthur Stamoulis] “This forced many to look for new jobs in cities along the border, and when they can’t find those to risk their lives crossing the border looking for work in the United States.  The Clinton Administration claimed that it was going to be such a great deal for Mexico that it was going to solve the quote-unquote “immigration problem.”  Instead, we saw in that first decade, immigration from Mexico just skyrocket.  And again it was because of this exodus of people from rural centers throughout Mexico, who just had no way to make of making a livelihood.  The prices they were getting for their crops plummeted almost overnight.  You go to certain rural communities in Mexico, the numbers of people, the percentages of people that have lost has just been mind-blowing.”

    Perez-Rocha also says that Mexican consumption of U.S. goods has skyrocketed, destroying hundreds of thousands of smaller Mexican companies:

    [Manuel Perez-Rocha]: “You know that, for example, Walmart is the largest supermarket chain in Mexico now by far.  It has more than a thousand establishments…more than a thousand stores.  Thousands of small stores and thousands of other supermarkets have also bankrupted, and this is just an example.”

    While NAFTA has actually benefitted the manufacturing sector in Mexico, that doesn’t mean it’s benefitting Mexicans:

    [Manuel Perez-Rocha]: “This is mainly foreign companies that operate in Mexico, not Mexican companies.  And some companies even bring workers from outside, from other countries.  For example Audi, the carmaker of Germany that just brought to Mexico 2000 workers from Europe.”  

    Overall, employment in Mexico has not improved after NAFTA:

    [Manuel Perez-Rocha]: “Most of Mexican workers work in the informal sector; that is, they don’t receive any benefits or social security.  So almost half of the jobs in Mexico are in the informal sector and since 1994 we’ve had 15 million or so people joining the ranks of poverty in Mexico.  And this was particularly acute during the 2008 crisis which, because of Mexico’s dependence to the United States economy, Mexico was the country that was worst hit in the entire Americas continent.  The overall assessment of NAFTA is that, yes, it has benefited a few exporting companies, a few manufacturing companies, especially the car industry, but it has affected most of the other sectors of Mexico’s economy and most of Mexican population.”

    Perez-Rocha says that migration from Mexico to the United States has actually decreased recently, but not because NAFTA has resulted in an economic miracle south of the border:

    “Sometimes in the mainstream media, it is said Mexico is doing better economically and, therefore, migration to the United States has slowed down.  Mexican migration to the United States has slowed down, that is true, while Central America’s has increased, but one of the reasons why is that most Mexicans prefer not to risk their lives crossing or displacing themselves through Mexico to the United States, because of increased violence in Mexico.  What NAFTA has created, also, by displacing rural economies and destroying rural livelihoods is creating also the conditions for the narco-cartels and criminal organizations to flourish in Mexico.  And this is what also prevents migration, because people are actually unable to use the previous routes for migration.  They have been severed by the criminal organizations.  This is another effect of the failed war on drugs in Mexico.  I don’t know if it was an intent from the beginning to use this war on drugs to curtail migration to the United States.”


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