The North American Free Trade Agreement (NAFTA), which went into force twenty years ago this month, became the model for each successive trade agreement. Not limited to trade and tariffs, trade agreements include new rules that impact labor laws, access to medicines, environmental protection, food security, financial controls, and even judicial processes.
As the U.S. prepares to wrap up the most ambitious trade agreement yet- the Trans-Pacific Partnership- it is a good moment to reflect on the legacy of NAFTA.
Changes to Mexico’s Agriculture Policy Destroyed Farming Livelihoods
Mexico used to have an ejido agricultural system that allowed peasant farmers a small plot of land for farming. NAFTA forced Mexico to change their agrarian law to allow foreign corporations to have rights to the land.
Mexican farmers were paid 66 percent less than before NAFTA. They could not compete with the prices of subsidized corn imported from the U.S. NAFTA resulted in roughly two million Mexican displaced farmers.
NAFTA Created Food Insecurity
NAFTA deregulated food prices raising the price of tortillas by 279 percent in the first decade and by more than 500 percent in 2008. An estimated 20 million Mexicans cannot afford basic food, and one- fifth of Mexican children are malnourished.[i]
Yet, two decades after NAFTA, Mexico surpassed the U.S. as the most obese nation in the world. NAFTA imported a U.S. diet of processed food. These unhealthy food choices are cheaper and more prevalent than the typical diet, increasing obesity rates among Mexico’s economically poor.
NAFTA Harms Public Health and the Environment
NAFTA introduced new investment laws that allowed companies to sue for lost profit. Investor-State provisions are supposed to ensure that all companies have equal access to investment, but they have been used to duck environmental and public health regulations. These lawsuits are not held in a court recognized by international law such as the U.S. courts, but rather at the World Bank. Since NAFTA, more than 350 investor-state cases have been filed that affect laws related to waste disposal, drinking water, extractive industries, smoking, and access to medicines.
NAFTA is a Root Cause of Migration
After NAFTA and the Central American FTA went into force (2006), migration from these countries had a high uptick. Contrary to arguments that FTAs create jobs, Mexico’s economy has stagnated in the last decade and unemployment is higher today than before NAFTA. The number of jobs created under NAFTA was not enough to absorb domestic manufacturing or agricultural jobs that were lost.
A New Economic Vision
The past three popes and religious leaders across faith traditions have criticized trade policies and economic models that put profit before people. It is time for policy makers to find the moral courage to look at the legacy of these models and come up with a new vision that guarantees the health of all God’s people and the whole of Creation.
As people of faith, we can help guide them to a moral economic vision that puts the dignity and worth of people first. Representative Dave Camp (R-MI) and Senator Max Baucus (D-MO) introduced legislation last week that will allow Congress to approve the TPP and future agreements with an up or down vote with little to no consultation from Congress and no public input into the text. Already strong opposition to this legislation is building in Congress and they need to hear from you. Contact your Member of Congress today and say no to “Fast Track” legislation for trade agreements at the Capitol Switchboard: 202-224-3121.
[i] Carlsen, Laura. “NAFTA is Starving Mexico.” Foreign Policy in Focus. October 20, 2011. http://fpif.org/nafta_is_starving_mexico/. Accessed December 2, 2013.