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Sat Jan 11, 2014, 11:17 PM

After 20 Years, NAFTA Leaves Mexico’s Economy in Ruins


from truthdig:


After 20 Years, NAFTA Leaves Mexico’s Economy in Ruins

Posted on Jan 9, 2014
By Sonali Kolhatkar


Twenty years ago, on Jan. 1, 1994, a trade deal championed by Democratic President Bill Clinton went into effect. The North American Free Trade Agreement was meant to integrate the economies of the United States, Canada and Mexico by breaking down trade barriers among them, creating jobs and closing the wage gap between the U.S. and Mexico.

What in fact happened under NAFTA was that heavily subsidized U.S. corn flooded the Mexican market, putting millions of farmers out of work. Multinational corporations opened up factories creating low-wage jobs at the expense of organized labor and the environment. This, in turn, drove waves of migration north.

Meanwhile, corporate profits soared, and Mexico boasted the richest man in the world, Carlos Slim. Walmart and Krispy Kreme conquered Mexico, and ordinary Mexicans had access to the same consumer goods as their neighbors to the north. The economies of all three nations, measured only by GDP rather than jobs or wages, were pronounced grand successes, even though the U.S. and Canada disproportionately reaped more financial benefits.

Meanwhile, in the U.S., manufacturing jobs fell dramatically and organized labor lost even more clout. The Great Recession of 2008 worsened the downward trend, especially for Mexicans. Mexico’s economy, tied intimately to the U.S.’ because of NAFTA, suffered more than any other country in Latin America. .........................(more)

The complete piece is at: http://www.truthdig.com/report/item/after_20_years_nafta_leaves_mexicos_economy_in_ruins_20140109



31 replies, 10616 views

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Arrow 31 replies Author Time Post
Reply After 20 Years, NAFTA Leaves Mexico’s Economy in Ruins (Original post)
marmar Jan 2014 OP
jsr Jan 2014 #1
Baitball Blogger Jan 2014 #7
Enthusiast Jan 2014 #17
abelenkpe Jan 2014 #2
R. Daneel Olivaw Jan 2014 #11
X_Digger Jan 2014 #3
L0oniX Jan 2014 #23
Fumesucker Jan 2014 #4
democratisphere Jan 2014 #5
Barack_America Jan 2014 #6
doc03 Jan 2014 #8
El_Johns Jan 2014 #13
doc03 Jan 2014 #25
El_Johns Jan 2014 #26
doc03 Jan 2014 #28
El_Johns Jan 2014 #31
L0oniX Jan 2014 #24
Nye Bevan Jan 2014 #9
TheKentuckian Jan 2014 #20
indie9197 Jan 2014 #10
solarhydrocan Jan 2014 #12
TL_dem68 Jan 2014 #21
flamingdem Jan 2014 #14
octoberlib Jan 2014 #15
Luminous Animal Jan 2014 #16
Enthusiast Jan 2014 #18
Name removed Jan 2014 #19
L0oniX Jan 2014 #22
IDemo Jan 2014 #27
El_Johns Jan 2014 #29
treestar Jan 2014 #30

Response to marmar (Original post)

Sat Jan 11, 2014, 11:18 PM

1. Thanks, Bill!

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Response to jsr (Reply #1)

Sat Jan 11, 2014, 11:50 PM

7. Can we now pronounce neo-liberalism an epic fail?

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Response to Baitball Blogger (Reply #7)

Sun Jan 12, 2014, 09:28 AM

17. Absolutely.

And it's destroying the Democratic Party.

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Response to marmar (Original post)

Sat Jan 11, 2014, 11:27 PM

2. but, but...

didn't someone post on here recently that NAFTA was a huge success for Mexico?

http://www.democraticunderground.com/10024265475

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Response to abelenkpe (Reply #2)

Sun Jan 12, 2014, 12:54 AM

11. Proponents always say nice things about terrible ideas...and those that author them.

 


You will know them by their works.

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Response to marmar (Original post)

Sat Jan 11, 2014, 11:30 PM

3. And NAFTA / Clinton were one reason we lost a lot of blue collar votes in places like rural Virginia

Coal country, once reliably democratic, flipped to the republicans.

Compare the maps for 1992 - http://uselectionatlas.org/RESULTS/state.php?f=0&fips=51&year=1992

Pay special attention to the counties along the left lower edge.

to the map for 2000 - http://uselectionatlas.org/RESULTS/state.php?f=0&fips=51&year=2000

If you really want to see something sad, check 1976 - http://uselectionatlas.org/RESULTS/state.php?f=0&fips=51&year=1976

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Response to X_Digger (Reply #3)

Sun Jan 12, 2014, 12:17 PM

23. Clinton 2016. It's inevitable.

 

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Response to marmar (Original post)

Sat Jan 11, 2014, 11:32 PM

4. Two words...

Mishun Akkomplished.

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Response to marmar (Original post)

Sat Jan 11, 2014, 11:41 PM

5. Ross Perot was right.

NAFTA ruined everyone's economy, except for the corporate wall street wealthy. I can still hear that "Giant Sucking Sound" coming from somewhere.

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Response to democratisphere (Reply #5)

Sat Jan 11, 2014, 11:49 PM

6. He certainly was.

We're damn near approaching the $6/hr mark here, when you figure in the meteoric rise in fuel and healthcare costs.

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Response to marmar (Original post)

Sat Jan 11, 2014, 11:52 PM

8. I don't believe it hurt Mexico more than the US, after all

where is the biggest selling "American" car the Ford Fusion made, Mexico, Chevy Silverado the second best selling vehicle in the US is also made there now. It has almost totally de-industrialized the US. I started working in a steel company back in 1970 when we had 19000 employees, today only one plant with less than 200 exists. Millions of tons of steel was made in the upper Ohio Valley for over two hundred years, today not one pound is produced here.
A few months ago they shut down the aluminum plant here that operated for over 50 years. It all started in the 70s when manufacturers went to the "right to work for less" south. When wages got to high there they found Mexico then China. If those bastards found cheap labor on Mars they would move there.

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Response to doc03 (Reply #8)

Sun Jan 12, 2014, 01:09 AM

13. Is Mexico Adding Auto Jobs or Is It Just Losing them Less Rapidly?

 

According to the Bureau of Labor Statistics, in 2000 the United States had roughly 1,310,000 jobs in the auto industry. Currently employment in the sector is around 800,000, implying a drop of 38.9 percent.

If employment in Canada followed the same pattern, then Mexico's share of total industry employment in North America would have risen to more than 55 percent if it had stayed constant since 2000. Since Mexico's share of total employment is now just 40 percent, it implies that it has gained share by seeing a less rapid decline, not by adding jobs. This doesn't fit well with the main thesis of the article which is that a middle class is rising in Mexico.

http://www.cepr.net/index.php/blogs/beat-the-press/is-mexico-adding-auto-jobs-or-is-it-just-losing-them-less-rapidly

Total auto jobs are down, period.

And China has also lost a lot of manufacturing jobs.

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Response to El_Johns (Reply #13)

Sun Jan 12, 2014, 01:43 PM

25. China produces 4 times the steel we did even when we were number one in the world. From

your chart it looks like the Chinese are just working harder, the output is going up. That is the capitalist way
get as much as you can for the least money,screw safety, the environment and the public for the almighty dollar.

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Response to doc03 (Reply #25)

Sun Jan 12, 2014, 02:18 PM

26. "working harder" = No. Investing in new plant & equipment. But part of that is foreign capital

 

choosing to invest in new plant & equipment in a low-wage area rather than modernize facilities here.

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Response to El_Johns (Reply #26)

Sun Jan 12, 2014, 10:45 PM

28. It is hard to modernize when you are competing against

someone paying 50 cents an hour, no environmental controls and no labor laws. Much of China's steel industry was still 19th century technology so modernizing their mills eliminated a lot of jobs. The engineer that worked on building our EAF built one in China before ours. He said first of all they built a new coal fired power plant (using our coal no doubt) nearby to supply electricity. They have no pollution controls like ours, he said the area around the steel mill is covered in red dust and the workers live in tin shacks next to the plant. He talked about street vendors having chickens hanging out in the filth at the mill and kids playing in the streets where heavy equipment was operating. Why is it we are trading with communist China but have punished the people in Cuba for 50 years? Now we have another Democratic president pushing for NAFTA on steroids.

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Response to doc03 (Reply #28)

Sun Jan 12, 2014, 10:54 PM

31. Nothing to disagree with there.

 

Last edited Sun Jan 12, 2014, 11:39 PM - Edit history (1)

But I think it's important to note that a lot of the capital in China is foreign, and that capitalists in the developed world are investing abroad because it's more profitable to create modern facilities that will be used by a non-union, cheap labor workforce.

Thus the rust belt, thus the 'inner-city" ghettos (which actually used to be sites of industrial activity) -- it's all about capitalist abandoning high-wage areas for new fields of cheap labor investment -- and leaving behind destruction in their wake.

The only thing different is after fleeing the old industrial cities for the Midwest or South, they moved abroad.

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Response to doc03 (Reply #8)

Sun Jan 12, 2014, 12:19 PM

24. Well they did get a lot of battery waste disposal jobs.

 

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Response to marmar (Original post)

Sat Jan 11, 2014, 11:53 PM

9. So presumably Mexico will be moving to pull out of NAFTA soon.

If NAFTA has really left their economy in ruins, the political pressure to end their participation in NAFTA must be overwhelming.

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Response to Nye Bevan (Reply #9)

Sun Jan 12, 2014, 11:04 AM

20. They have greedy and wealthy profiteers as well.

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Response to marmar (Original post)

Sun Jan 12, 2014, 12:50 AM

10. It was Bush Sr. that fast-tracked it before he left office

and did most of the negotiating. Clinton still finalized it, though.

Nobody knew at the time what Bush meant when he kept talking about a "New World Order" back then, but I think we know now.

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Response to indie9197 (Reply #10)

Sun Jan 12, 2014, 01:04 AM

12. Interestingly, both Joe Biden and John Kerry sure do





People accuse others of being "Conspiracy Theorists" when they dare mention this.

So are Biden and Kerry "Conspiracy Theorists"?

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Response to solarhydrocan (Reply #12)

Sun Jan 12, 2014, 12:05 PM

21. those videos suggest its not a theory

I stop short of placing blame on one group or another, as many do....(whether its the free masons, Jesuits, Jewish people or Rosicrucian....labels are mostly bogus, a waste of time, and prejudice). To me the NWO is the rich and powerful, trying to maintain and increase their wealth and power in a time of new technology (where information is more abundant) and while they're hugely outnumbered. So the only label I use for them is a*sholes. And yes, they do coordinate and they do have enough power to set global policy. It is not a theory. It is the obvious truth. I also don't believe they're devil worshiping pedophiles, but they may be evil or at the very least, sociopathic.

"Our society is run by insane people for insane objectives. I think we're being run by maniacs for maniacal ends and I think I'm liable to be put away as insane for expressing that. That's what's insane about it."

John Lennon

Read more at http://www.brainyquote.com/quotes/quotes/j/johnlennon167339.html#CYuyPOoWypQRuG83.99

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Response to marmar (Original post)

Sun Jan 12, 2014, 01:22 AM

14. And with access to US packaged foods .. Mexicans

got more US style diseases. Sigh.

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Response to marmar (Original post)

Sun Jan 12, 2014, 01:36 AM

15. Excellent interview with Lori Wallach



Joshua Holland: What about Canada and Mexico? I know Mexico’s agricultural labor market was devastated by NAFTA, as subsidized corn and other products flooded into the country, and it certainly spurred a huge wave of immigration from the south, as all those agricultural workers lost their jobs. But in terms of employment in other sectors, did it end up a net winner or loser for them?



Lori Wallach : Also, if you look at Mexico, the level of poverty has stayed the same, but income inequality has increased, and industrial wages are actually down in real terms.

One statistic that really shows the failure of the free trade model is that the price paid to Mexico’s farmers for their corn dropped 80 percent within the first three years of NAFTA, as a huge flood of subsidized US corn started flowing in. But the price Mexicans pay for tortillas—a staple food—has increased almost 300 percent. Under free trade theory, some folks lose — those corn farmers lose — but everyone is supposed to get richer because prices go down. That is the theory of free trade — the consumer benefits, and the producer who loses should be compensated — and the tortilla shows how that promise has been proven false.

There are many reasons for this. NAFTA wasn’t just about trade. It set up all these rules that, for instance, allowed Archer Daniels to buy up not only the processing plants for corn, but also to buy a stake in one of the biggest tortilla makers, Bimbo, which is sort of the Wonder Bread of Mexico. And as a result, you have Archer Daniels and other companies selling to themselves, and marking up the profit margin each time. So with this “competition” that free trade is supposed to create, with all these corporate rights to acquire and basically monopolize sectors, the consumer is the loser.

http://billmoyers.com/2014/01/09/fool-me-once-20-years-of-nafta-show-why-the-trans-pacific-partnership-must-be-stopped/

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Response to marmar (Original post)

Sun Jan 12, 2014, 01:40 AM

16. NAFTA and welfare reform is why I stopped being a registered Democrat...

I worked my ass off against both... along with millions of other committed Democrats.

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Response to marmar (Original post)

Sun Jan 12, 2014, 09:30 AM

18. Kicked and recommended a whole bunch.....nt

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Response to marmar (Original post)


Response to marmar (Original post)

Sun Jan 12, 2014, 12:14 PM

22. Mexico is now the dumping ground for hazarous waste ...like batteries and the like.

 

See ...that's just one of the things they wanted to get from NAFTA ...permission to pollute.

http://www.nytimes.com/2011/12/09/science/earth/recycled-battery-lead-puts-mexicans-in-danger.html?pagewanted=all&_r=0

NAUCALPAN DE JUÁREZ, Mexico — The spent batteries Americans turn in for recycling are increasingly being sent to Mexico, where their lead is often extracted by crude methods that are illegal in the United States, exposing plant workers and local residents to dangerous levels of a toxic metal.

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Response to marmar (Original post)

Sun Jan 12, 2014, 02:27 PM

27. NPR (Neocon Public Radio) on NAFTA last week

- ran a story that seemed to suggest fresh strawberries and tomatoes in mid-winter in Maine defined NAFTA as a success story. No word whatever on the financial impacts upon US workers.

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Response to IDemo (Reply #27)

Sun Jan 12, 2014, 10:46 PM

29. The horrible things now called tomatoes are no success story.

 

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Response to marmar (Original post)

Sun Jan 12, 2014, 10:49 PM

30. How can Mexicans afford Walmart etc.

And if the jobs went there with a giant sucking sound or whatever, how is Mexico worse off?

I've been told the US is worse off, now it seems the US and Canada benefitted at Mexico's expense.

Assertions on these treaties never seem to require back-up. They are just BAD, BAD, BAD, no reflection allowed. This OP is revealing that. So now it's the Mexicans that are hurt by it, and the US and Canada that benefitted. Yet other times the US was devastated by it. The point seem merely to assert that it is bad, no matter if you end up being inconsistent doing it.

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