NAFTA turns 20 this month

NAFTAHow time flies.  One minute you’re wiping your kid’s rear, and the next you’re dropping her off at college.  We don’t have children of our own, but we do sense the swift passing of time (not to mention, at times, the smell of poo in the air) on the occasion this month of the 20th anniversary of the entry into effect of the North American Free Trade Agreement (NAFTA).  We well recall huddling around a TV screen with our colleagues in the newsroom of El Economista in November 1993 to watch the historic U.S. Congressional vote approving the controversial trade pact.  We, naturally, were in favor; many others in all three countries were vehemently against, and that much certainly has not changed. 

Opponents of NAFTA in the United States and Canada argued that manufacturing jobs in their countries would be lost to Mexico, and certainly in some cases this came to pass.  Defenders have argued that the boom in exports to Mexico would create new jobs to help offset those lost.  Ultimately, to paraphrase a Mexican expression, one’s opinion depends on how he did at the fair: Those who prospered under NAFTA see it as a success, and those who lost out are apoplectic.  Nonetheless, one thing that even Weepy Wendys such as the American unions and the Mexican left  would be hard pressed to dispute is that trade across the NAFTA zone has skyrocketed under the pact.

In 1993, the last year before NAFTA went into effect, the United States exported $41.6 billion in goods to its southern neighbor.  In 2013, that figure is projected to exceed $226 billion – representing growth of approximately 444% over the past 20 years, according to data from the U.S. Department of Commerce.  Put in another perspective, in 2012 U.S. exports to Mexico exceeded the combined total of those to the four BRIC countries (Brazil, Russia, India and China) – with exports to Mexico representing nearly double the value of exports to China.  For its part, the Canadian government reports that merchandise trade between Canada and the United States has more than doubled under NAFTA, and Canada’s merchandise trade with Mexico has grown approximately sevenfold over the same period.

If we were to agree on one thing with the opponents of NAFTA, it would be that increased trade and the manufacturing boom in Mexico over the past 20 years have failed to remedy – or even have much impact upon – our country’s most grievous ills.  These would include, but not be limited to, a catastrophic public education system; a culture of corruption endemic at all levels of society but worst among those who, frankly, don’t even need the money;  the lack of a functioning justice system; and organized crime most unfettered.

According to recent media reports, the presidents of Mexico and the United States and the Prime Minister of Canada will be meeting next month (February 2014) at a North American summit to be held somewhere in Mexico, on unspecified dates.  In advance of the talks, public comments by Mexican officials are promoting a “relaunch” and “deepening” of NAFTA, in addition to the positioning of North America as a world energy powerhouse based on the potential for natural gas production and Mexico’s recently promulgated energy sector reform.  We have no idea what a “relaunch” of NAFTA might entail (we presume that it would entail nothing, really, at all) but we hope that in between the relaunch and the gas production (as it were), the three leaders will find time for some frank discussion of the problems that put Mexico on a wholly unequal footing with its northern neighbors, regardless of the spectacular trade numbers racked up under the agreement.

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