News Release

How NAFTA Created Poverty and Desperate Mexican Migration

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CNN reports today: “President Barack Obama bids ‘adieu’ and ‘adios’ to his counterparts in Canada and Mexico Wednesday, convening a final North American leaders’ summit even as the U.S. presidential contest throws crucial cross-border issues into turmoil. Obama’s visit comes just a day after presumptive Republican nominee Donald Trump lambasted the agreements that have linked the U.S. and its northern and southern neighbors in tight trade ties, vowing to withdraw from the much-maligned NAFTA agreement while insisting he’d also scuttle Obama’s proposed replacement, the Trans-Pacific Partnership.”

MANUEL PÉREZ-ROCHA, [in D.C.], manuel[at]ips-dc.org, @ManuelPerezIPS
Associate fellow at the Institute for Policy Studies, Pérez-Rocha wrote the articles, “NAFTA Pushes Many Mexicans to Migrate,” and “NAFTA’s 20 Years of Unfulfilled Promises: The trade deal has become an engine of poverty in Mexico.” He also wrote the piece “The Moral Case Against the TPP.”

He said today: “According to its proponents, NAFTA would bring prosperity to Mexico. There would be more employment, and living standards of Mexicans would move up to those of the U.S. or Canadian people.

“Instead, by removing trade barriers, NAFTA took away protections for Mexico’s domestic food production, leading to greater food insecurity and the widespread loss of agricultural livelihoods. By removing investment barriers, the deal made it even more profitable for large corporations to set up factories along the border to assemble goods for export back to the United States. Because the labor side agreement is extremely weak, these jobs have remained low-road jobs, without basic labor protections, and with low wages and often dangerous working conditions. And because under NAFTA the government could no longer impose conditions on foreign investors to use domestic suppliers, the ripple effects of this investment has plummeted.

“During NAFTA, Mexico’s poverty has increased, and the country has to import 45 percent of its food (back in 1994, it imported only 15 percent). There is a plethora of data to demonstrate the ill effects of NAFTA in Mexico but, in sum, as we declared when this agreement became 20 years old, ‘it has represented the abandonment of national production of food to favor imports. This has meant the fall of production, employment, income and the increase of inequality, poverty and migration. The abandonment of the countryside by the government [ensured] that this vacuum would be occupied by organized crime. NAFTA is responsible [for] the increase of violence and public insecurity in the countryside and in all of Mexico.

Ten years later, CAFTA was imposed in Central America. As the Committee in Solidarity with the People of El Salvador reports, CAFTA has ‘ushered in a decade of deteriorating economic conditions for working people, major new threats to the environment and national sovereignty and the further unraveling of rural economies.’

“As we have documented, ‘transnational corporations in the extractive sector are increasingly turning to international arbitration tribunals to resolve resource disputes’ as a result of the Investor ­State Dispute Settlement mechanisms that are written into free trade agreements and bilateral investment treaties. One of the most egregious examples is the Canadian mining company Pacific Rim’s pursuit of hundreds of millions of dollars from the government of El Salvador through the World Bank’s International Centre for Settlement of Investment Disputes.

“A regional observatory of civil society organizations in Central America has concluded that ‘the only perspective of Central American countries is to continue promoting extractive industries, in particular metallic mining. This will continue generating social conflicts and environmental impacts.’ …

“I agree with the [recent] AFL­-CIO report’s conclusions about Honduras that also accurately describe the broader Mesoamerican context: What is striking — and tragic — in the current debate is that there has been no effective response to the roots of the crisis: desperate poverty, violence and a lack of decent work opportunities at home.”

Pérez-Rocha has also stated: “Trump’s idea of a wall is pure nonsense [and] inhuman. Mexicans and Central Americans contribute more to the economy of the U.S. than all his unproductive enterprises together.”