The Illusion of NAFTA

On the eve of the 20th anniversary of the signing of the North American Free Trade Agreement (NAFTA), the Mexican ambassador to the United States, Eduardo Medina Mora, predicted that our government, together with those of Washington and Ottawa, will look to further a new strategic vision of this trade instrument during the leaders’ summit that will take place in February.

For his part, the President of the Business Coordinating Council, Gerardo Gutiérrez Candiani, said that at this juncture it is appropriate to rethink and re-launch NAFTA, which has entered into a phase of relative stagnation.

The insistence of the authorities and private sector on the need to reformulate NAFTA requires recollection of its inequitable character and its contrary nature to the interests of this nation that has had this agreement since its origins, which at the time constituted an illusion of momentum for our country. Over the past two decades, by contrast, this multilateral trade agreement has had serious consequences in Mexico for major sectors, has caused profound damage to various branches of the national economy — such as the agricultural and industrial sectors — and has weakened the market and the domestic economy. All of these changes have been a consequence of the unfair terms Mexico has subscribed to — the submission of our country to a deep process of integration of inequality — as well as the irregular compliance with the instrument in Washington that has maintained subsidies in its agricultural sector and has tolerated and promoted unfair trade practices.

In macroeconomic terms, the figures are compelling. At the time of the signing of NAFTA, Mexico’s trade balance with the outside showed a surplus of more than $500 million; that same balance showed a deficit of more than $2 billion in the first half of the year. In these 20 years, grain and oilseed imports increased from 8.8 million tons in 1993 to 29.26 million tons in 2012, destroying a significant part of the productive infrastructure, increasing agricultural unemployment and deepening abandonment of rural environments.

Socially, the promise that NAFTA would accelerate the entry of Mexico into the First World is belied by data recently published in a World Bank report, according to which the proportion of Mexicans in poverty compared to the total population is now as high as it was two decades ago: 52 people in every 100.

Under the current circumstances, and given the correlation of political forces and the ideology of those in power, it is expected that the announced re-launch of NAFTA, if implemented, would lead to an underpinning of vices and would create harmful potential arising from that instrument. Suppose, for example, that the opening of the energy sector of our country were incorporated, derived from the recent approved and promulgated constitutional reform.

Overall, it is relevant and necessary to insist that overcoming the social and economic backwardness of the country requires that the government initiate a profound reformulation of that instrument, which would correct the enormous structural deficiencies within it: Mexico’s economic dependency on its neighboring countries, the abandonment of agricultural environments — with the corresponding sustained loss of food sovereignty, the destruction of the social fabric of the community and the painful migration from farmland — the dismantling of the national industry, accompanied by unjustifiable wage restraints and the cheaper domestic work in order to benefit transnational capital.