September 22, 2006

NAFTA’s Failures Fuel Mexican Illegal Immigration

By Louis Nevaer


MEXICO CITY—In the impassioned demonstrations this summer in Mexico City in support of defeated presidential candidate Andres Manuel Lopez Obrador are the faces of Mexicans most likely to risk their lives and emigrate illegally to the United States.

Mexico’s presidential election on July 2 was not only the most highly contested in modern Mexican history — the ruling party candidate Felipe Calderon won by less than 1 percent of the vote — but also an unintended referendum on Mexico more than a decade after Nafta, the North American Free Trade Agreement, was implemented.

The sharp divisions of the Mexican electorate reflect, by class and race, how Mexico’s “haves” have benefited handsomely from Nafta, while the “have nots” have been systematically excluded from the economic benefits of increased trade with the United States and Canada.

As Nafta is well into its second decade, it’s clear that the natural failures of a market-driven economy haven’t been addressed, and the social repercussions put increased pressure on Mexico’s disenfranchised to abandon the countryside for the city, and then the cities for the United States in order to survive.

To be sure, by most economic measures Nafta has been a success — on a macroeconomic level, which is how the World Bank and politicians, catering to the needs of big business, view things. Millions of Mexican families who were lower middle class or working class have made the leap to middle class security. This can be measured in new houses, new cars, private schools for their children, vacations taken together, the number of iPods school children enjoy, the number of plasma TVs about which fathers boast and the number of fashionably dressed mothers running errands in their SUVs.

But for an equal number of Mexicans, Nafta has not only passed them by, it has hurt them.

U.S. farm subsidies have rendered obsolete Mexican farming, and millions of farmers have lost their livelihoods. In Oaxaca and Michoacan states, two of Mexico’s poorest — agriculturally dependent with large numbers of indigenous peoples, with literacy rates trailing the national average — entire towns and villages have been abandoned by the able-bodied in search of work. The protests in Oaxaca state this past summer, ostensibly to oust an unpopular governor who runs the state as if it where his personal fiefdom, have made it impossible for anyone to govern.

At the same time, the Mexican government has not come to terms with its antiquated nationalistic energy policies, making it impossible for Mexico’s oil and gas reserves to be developed in a manner that benefits the nation — thereby depriving the nation of millions of jobs in the impoverished states that string the Gulf of Mexico.

These two issues — addressing the farming crisis and mustering the political will to modernize the energy sector — are the most outrageous of Nafta’s failures. And it’s from the decimated countryside and the oil-rich but job-poor states that the bulk of Mexican illegal aliens come.

That Nafta’s market failures would drive illegal immigration wasn’t unexpected. Ignoring it was a deliberate decision by officials in Washington and Mexico City in the early 1990s. American legislators, fearing continental integration similar to how the European Union, for instance, has established a single currency, wanted to exclude U.S. farm subsidies from the table. (U.S. officials, confident that undocumented workers would undermine efforts calling for “living wages,” calculated that a certain percentage in the labor force would forever be in the shadows, and weren’t concerned about the impact of their decision on America’s working poor.) Mexican officials, convinced they could not pass reforms in the energy sector that would be acceptable to the Mexican public, refused to put oil and gas on the table, effectively shutting out American oil companies from the Mexican market.

What may have been politically expedient for both nations in 1990, however, is in retrospect monstrously short-sighted, a monumental passing of the buck in which millions of poor people pay.

In Mexico, millions of the have-nots are forced to abandon their native homelands. Entire indigenous nations — the Zapotecs, the Mixtecs, the Tzotzil Maya — have moved by the tens of thousands, creating the largest migration of Native American peoples in North America since the Trail of Tears in the late 19th century. And in the United States, a human tide of illegal aliens strains the social services of communities large and small.

There is no end in sight, for the simple reason that politicians on both sides of the border refuse to speak of the only rational course of action: To address Nafta’s shortcomings the way the Europeans go about the business of integrating disparate economies into the E.U. End U.S. farm subsidies, for one. Open up Mexico’s oil and gas industries to foreign investors. Fund properly Nafta’s development plan for infrastructure projects throughout the continent — from Mexico City’s new airport to New Orleans’ new levees.

Today, Mexicans must endure the pain of the nightly news reports that speak of the deaths of their countrymen in the forsaken deserts of Arizona, while Americans grow alarmed and enraged as they are fed nightly venom from the likes of CNN’s Lou Dobbs. In Oaxaca, a desperate farmer decides to embark on a desperate journey north. In the United States, a single mother working two jobs wonders why she can’t earn enough to provide for herself and her children.

It’s enough to make Mexicans and Americans alike think about emigrating to Canada, whether the Canadians like it or not.

Louis Nevaer is a New York-based author and economist.

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