Image CreditIs NAFTA good for Americans?
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By Heather Smith
Think you know where you stand?
Passed by Congress in 1993, the North American Free Trade Agreement (NAFTA) is a trilateral trade agreement between the United States, Canada and Mexico that was designed to allow goods to travel more easily between the three nations. NAFTA’s supporters said it would create jobs, lower consumer prices and bolster the economies of each of the countries involved. Free trade dispenses with tariffs, taxes and regulations that can hinder trade among countries. It’s been argued that since World War II, free trade has been key to worldwide economic growth and a period of relative peace.
When it was designed, NAFTA supporters regarded the policy as a sound strategy to prevent the rapidly growing European Union from surpassing the United States as the world’s largest economic power. Where the European Union promised to be contentious and unwieldy with its common currency, shared customs enforcement and labyrinthine governmental apparatus, NAFTA would be lean, mean and efficient — a way to focus exclusively on trade and making money, rather than on managing the cultural and social repercussions of that trade.
NAFTA was also touted as a way to accomplish for Mexico what preferential trade agreements had done for Japan and Korea decades earlier. In effect, lowered trade barriers were supposed to encourage Mexicans to buy American industrial goods such as trucks and tractors, which would in turn make farms and factories more efficient, thus triggering an increased standard of living and, ultimately, the creation of a huge, consumer-minded Mexican middle class. With plenty of good jobs at home, the problem of illegal migration into the United States and Canada from Mexico would become a thing of the past.
The policy wasn’t without its critics, however. During the 1992 presidential race, candidate Ross Perot swore that the ratification of NAFTA would result in a “giant sucking sound": the sound of work — especially factory jobs — leaving the United States and moving south to Mexico, where it would be cheaper to manufacture goods. Others fussed that the money that international companies would normally invest in the United States would be invested in Mexico instead, now that factories in Mexico could export goods to America inexpensively.
Flash forward 15 years. Since January 1, 1994, when NAFTA first went into effect, the European Union has indeed become the world’s largest economy. Mexico has yet to develop into a Japan or Korea, and illegal immigration from Mexico to the United States has skyrocketed. We now buy more from Mexico than we sell there, a state of affairs known as a trade deficit, which NAFTA was intended to prevent. Meanwhile, Americans have become accustomed to things made possible by NAFTA: ripe tomatoes all year long (a third of the winter tomatoes sold here come from Mexico), enhanced diplomatic cooperation with our neighbors, cheap Canadian natural gas and oil, and markets close to home for all the extra food we grow. The Dominican Republic–Central America Free Trade Agreement, DR-CAFTA, an agreement that seeks to establish a similar relationship with Central America and the Dominican Republic, passed in Congress in 2005, and three more similar agreements are pending with Panama, Colombia and Peru.
Fourteen years after NAFTA went into effect, it’s hard to distinguish what has been changed by NAFTA and what has been altered by forces beyond the control of a mere treaty. But this hasn’t prevented people from raising a number of thorny questions: Is NAFTA endangering our food supply? Is it threatening our own laws? Is it widening the gap between the haves and the have-nots? Is it increasing illegal immigration? Does NAFTA, indeed, suck? Or is it feeding the working class, maintaining good diplomatic relations with Canada and Mexico, boosting our overall economy, and keeping economic crisis at bay?
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