Who Benefits from NAFTA?

March 5, 2018 By 0 Comments

We are living in an odd moment when it comes the politics of trade deals like the North American Free Trade Agreement, or NAFTA (in Mexico, TLC), currently being re-negotiated between Mexico, the United States and Canada. I say odd, because to read much of the mainstream media, you could be forgiven for thinking that all right-thinking people are naturally on the side of preserving the agreement. All wrong-thinking people, on this view, must naturally be aligned with the protectionist (right-wing) populists on the US side of the negotiating table.

And yet, even though the left-wing critique of NAFTA has had a hard time being heard above the posturing on all sides, it is worth reminding ourselves that there are plenty of sound reasons to be opposed to NAFTA. Looked at from the Mexican side of the border, it is difficult to locate the vaunted economic benefits of the agreement. Once cheap American corn came pouring into Mexico, it became extremely difficult for small Mexican corn producers to compete. Over the long term, farmers simply gave up, left the land, and migrated northward. In the southern state of Oaxaca, for example, it is estimated that over five-hundred thousand left to find work in the US. Before NAFTA came into effect in 1994, the rate of out-migration from the state was seven percent a year. Afterward, if jumped to twenty-nine percent: a four-fold increase. The same story can be traced among pork producers across Mexico where approximately twenty-thousand jobs disappeared.

Nationally, between 1994 and 2012, migration to the US increased to between twelve and fourteen million. Many Mexican families depend today on the remittances sent back from family members working in the US. So, the truth about NAFTA is that it played a direct role in the displacement and dispossession of millions of Mexicans — the same people who are vilified by the Trump administration today. The main beneficiaries then, were not poor campesinos, but large US-based agribusiness interests. Hardly a story of prosperity and development as promised by the advocates of the agreement.