The North American Free Trade Agreement, NAFTA, which promises to unite Mexico, Canada and the United States in an economic union nearly as ambitious as Europe 1992, will permanently alter the face of the continent. Beyond transforming where and how goods are produced, it will set a pattern for a new relationship among the peoples of the three nations and define a new vision for our collective future.
Proponents, including most major U.S., Canadian and Mexican firms, claim NAFTA will create jobs, lower consumer prices, and stimulate economic growth. Opponents, made up of U.S. and Canadian unions and certain business interests, as well as environmentalists and human rights advocates from all three countries, insist that free trade will encourage runaway shops, undercut labor and environmental standards, and reinforce Mexico and Canada’s subordinate position in continental affairs.
Each view is right. Yet each masks the complexity of the accord’s implications for immigration patterns, environmental policy, health and education, culture, and labor rights — none of which can be clearly foreseen.
More than a common market, NAFTA implies a dramatic reorganization of the regional production system for many key manufactures. While banking on the long-term development of the Mexican consumer market, U.S. business is primarily pursuing Mexico as a low-cost production center, William A. Orme Jr. points out. The accord will accelerate the transfer of operations from the old industrial centers of northeastern United States and central Canada, to the border region of northern Mexico and southwestern United States. Spawning such a cross-border industrial belt, Orme notes, may well exacerbate the north-south disparities at the root of each country’s deepest historic conflict – just as free trade has already seriously weakened Canada’s east-west federation in favor of north-south ties.
The 1988 Free Trade Pact with Canada will form the basis for the new accord. Bruce Campbell paints a dire picture of free trade’s effects on Canada, where traditionally higher wage scales, benefit packages and social standards have fallen prey to the pressure to “harmonize” the rules of competition to the lowest common denominator. U.S. corporations with branch plants in Canada have consolidated operations in the U.S. South or northern Mexico, and U.S. takeovers of Canadian firms are at record highs. In the absence of an accompanying social charter, free trade has been used by the Mulroney Administration and its business allies as a tool to ratchet down rights, standards and social programs, gutting the state’s capacity to set and enforce policies that dictate how business must be conducted.
David Barkin confirms that while NAFTA masquerades as a purely commercial accord, it is part and parcel — and a logical extension — of the broader neoconservative (known in Mexico as neoliberal) political and social agenda being pursued by all three administrations. President Salinas’ radical about-face in development policy may well transform Mexico into a full and cele-brated member of the world marketplace. But his narrow view of “modernization” is systematically closing off opportunities for the majority, rendering the country inca-pable of providing for the basic needs of its people, while depriving them of the ability to provide for themselves.
The economic integration of North America reflects the skewed power relationships between countries and social classes. By far the worst dislocations are to be suffered by poor and working people in Mexico and Canada — with benefits accruing to the transnational elite.
This is not inevitable. Even with free trade, different national policies could limit the damage and redistribute the benefits; Barkin lays out one such option for Mexico. Orme argues that the free trade accord itself, which is still subject to the pressure advocacy groups can bring to bear in Congress, could become a vehicle for an alternative vision. Although the accord is framed in terms of deregulation, it could provide a format for regulating — with social, labor and environmental guidelines — the seemingly inevitable process of economic integration.
In the long term, even a pro-business pact will bring closer ties between the peoples of North America, offering an opportunity for progressive alliances across both borders. For the near future, however, without a social charter and without the political will in either Canada or Mexico to enforce their own, free trade will facilitate the transfer of power over economic development from governments to the private sector, to the detriment of working people and the environment.
