NAFTA has Harmed Mexico Much More Than a Wall Will Ever Do
FEBRUARY 14, 2017
by MARK WEISBROT
President Trump is unlikely to fulfill his dream of forcing Mexico to pay for his proposed wall along the United States’ southern border. If it is built, it would almost certainly be US taxpayers footing the bill, with some estimates as high as $50 billion. But it’s worth taking a step back to look at the economics of US-Mexican relations, to see how immigration from Mexico even became an issue in US politics that someone like Trump could try to use to his advantage.
NAFTA (the North American Free Trade Agreement) is a good starting point. While it has finally become more widely recognized that such misleadingly labelled “free trade” agreements have hurt millions of US workers, it is still common among both liberal and right-wing commentators to assume that NAFTA has been good for Mexico. This assumption is forcefully contradicted by the facts.
If we look at the most basic measure of economic progress, the growth of GDP, or income, per person, Mexico ranks fifteenth out of 20 Latin American countries since it joined NAFTA in 1994. Other measures show an even sadder picture. According to Mexico’s latest national statistics, the poverty rate in 2014 was 55.1 percent ― actually higher than the 52.4 rate in 1994.
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Why did Mexico fare so poorly under NAFTA? We must understand that NAFTA was a continuation of policies that began in the 1980s, under pressure from Washington and the International Monetary Fund, when Mexico was particularly vulnerable during a debt crisis and world recession. These policies included the deregulation and liberalization of manufacturing, foreign investment and ownership (70 percent of Mexico’s banking system is now foreign owned). Mexico also moved away from the pro-development policies of the previous decades toward a new, neoliberal prescription that tied Mexico ever more closely to its northern neighbor and its questionable ideas about economic development.
More:
http://www.counterpunch.org/2017/02/14/nafta-has-harmed-mexico-much-more-than-a-wall-will-ever-do/