Mexico and Trade Regimes
The economy of a country is one of the most crucial aspects of a country to continue thriving - Mexico and Trade Regimes introduction. Similarly, the economy is one of the most difficult aspects to run as a vital pillar of a country. Every economic policy that a country may choose to venture in entails a lot of scrutiny and transparency.
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Constantly, there have been much issues being raised on every economic agreement that a government would choose to venture in. As expected, there are similar views that emerge in every economic policy that an economic block may want to implement. One excellent example is the policies that are being implemented by the World Trade Organization.
The World Trade Organization is but one of the numerous economic organizations that are existing that are constantly being criticized because of the unfair policies that developing member countries get. There have also been claims that WTO is just serving the interests of the “giant countries” whose economies are constantly blooming leaving the developing countries who are also members of the WTO lagging behind.
Mexico is one of the countries that was and is still engaged in economic agreements that are likewise been receiving criticisms from its own constituents. Among the economic agreements that the Mexican government has signed is the Free Trade Area of the Americas (FTAA) and the North American Free Trade Agreement (NAFTA).
Mexico and FTAA
In December 1994, during the first Summit of Heads of States of the Americas in Miami, the Free Trade Area of the Americas (FTAA) was given birth. It was Bill Clinton who gave form to this proposal. Before Bill Clinton’s term as president, it was actually George Bush who drafted policies toward the realization of FTAA (Hansen, 2002).
Since the relationship of Mexico with FTAA began, Mexico has been engaging in negotiations—but not enthusiastically (Baz, 2004). Mexico believes that FTAA would be a risk for them to lose access in the world’s largest market.
FTAA was envisioned to give multinational corporations new legal rights and in effect, restrict the rights and abilities of governments to regulate on policies and implicitly give up interests of the public (Hansen, 2002).
FTAA would mean neglecting the rights of the general public which include the youth, women, and other marginalized sectors in the society overshadowed by the interests of the big businesses (Hansen, 2002). The interest of the multinational companies whose main concern is to reap much profit is prioritized.
FTAA and its impact on the labor sector
Among the sectors that have been gravely affected by FTAA is the labor sector which has suffered enough. It was actually the citizens within the society’s marginalized who suffered from the ill consequences of going under FTAA.
In the case of Mexico, such economic policy has resulted in a drastic increase in unemployment rate simply because small farmers along with small and medium enterprises cannot compete with multinational companies. Since 1994, the poorest two-third of the American population decreased to a whooping 30 percent. More so, more than half of the Mexican population are either unemployed or underemployed. This has been the effects of the capitalist-serving policy like FTAA in countries like Mexico (Hansen, 2002).
FTAA, as modeled on NAFTA, caused a dramatic impact on the lives of the labor force in Mexico (Lee, 2002). The labor provisions in FTAA expanded the legal rights of corporations to establish themselves where they chose.
More so, FTAA allow multinational companies to have tariff reductions regardless on how they treat their employees. If their worker demand for higher wages, safer working conditions, or any other calls for the welfare of the laborers, multinational companies is granted to move into other countries where laborers cannot exercises these kinds of rights (Lee, 2002).
In general, FTAA makes it cheaper and more convenient for multinational companies to acquire the labor force that they imperatively need and makes it disadvantageous on the part of the laborers (Lee, 2002).
This kind of provision in international agreements shall be scrutinized for it put the interests of the inferior country’s constituents into exploitation and danger to some extent.
FTAA: affecting the environment
FTAA has also been criticized for its ill effects on the environment. According to White (2002), FTAA would have two major impacts on the environment. First is by placing much pressure on the government’s side to lower their aim of protecting their own environment due to the capitalist interests of multinational companies that would invest in their countries.
The demands of those multinational companies would be prioritized since they are considered as their “most valuable investors”—or so they thought. Just like the unfair policies being implemented by the World Trade Organization, the threat of coming up with worse economic policies which in effect compromise the welfare of the environment and the constituents in general are imminent.
Second, FTAA encourages unsustainable trade expansions that would later on deplete the natural resources of the countries that multinational companies are in.
Protests have also been staged in Mexico due to the unfair policies that FTAA implements. For one, FTAA reinforces the existing rules of the World Trade Organization which in effect causes countries to neglect their environment and their natural resources as a whole (White, 2002).
“NAFTA equals Death?”
In year 2002, there was about 2, 000 peasant farmers who staged a string of protests against the North American Free Trade Agreement (NAFTA) blaming it for more economic and social woes. This was due to the agricultural provisions that these peasants deemed unfair and disadvantageous on the part of their country (Cevallos, 2002).
NAFTA was ratified in year 1992 and was implemented two years later. The efforts of culminating economic liberalization started way back 1986. NAFTA, then, was envisioned to create a market of at least 360 million consumers and target an annual output of at least 6 trillion dollars. Also, tariffs on the basic agricultural and industrial products was actually planned to be eliminated gradually and be phased out after 15 years.
NAFTA, as a new phase of liberalization, would mean the elimination of tariffs which would only be beneficial on the part of these peasant farmers. Specifically, NAFTA would mean lesser farm products like potatoes, wheat, apples, coffee and chicken. In effect, this would mean lesser income on the part of the local farmers since multinational companies and foreign countries “would grab the job” (Cevallos, 2002).
Since NAFTA was implemented, the overall imports of Mexico jumped from 79.3 billion dollars to 168.4 billion every year (Cevallos, 2002). The trade in which Mexico in engaged with
is dominantly with the United States. More than 85 percent of the trading process is done with the United States.
Contrary to the increasing importations statistics presented by the Mexican government, the poverty in rural areas of Mexico has worsened (Cevillo, 2002). Around 75 percent of the population of the Mexican rural areas live in extreme poverty and could hardly provide their daily basic needs. Meanwhile, NAFTA caused a loss of more than 10 million hectares of land for the peasants. In addition, according to the study of the Autonomous National University of Mexico (UNAM), about 15 million rural area residents have opted to move into the city in their hope of a decent life.
FTAA, NAFTA: A threat to food safety?
FTAA, just like the repressive World Trade Organization and NAFTA, signaled another threat among economically-inferior countries like Mexico. No wonder a number of protests was and is being staged for Mexico to withdraw from FTAA and NAFTA.
One clear manifestation is the Health and Food safety NAFTA which has increased the trade in food products through eliminating the tariffs on export products. The Health and Food Safety NAFTA, similarly, does not require minimum levels on maintaining food safety standards on its products.
In year 1992, the expenditure of the Mexican government in food safety was pegged at 25 million dollars at decreased to 5 million dollars after three years. This was due to the severe slashes in the food inspection budget of Mexico which in return threatened the health of the most number of consumers (Beck, 2002).
More so, just as to intensify the food safety and security threat, pesticides and agricultural products that were already banned in the United States were transferred and sold to the countries in the Global South (Beck, 2002).
Another issue about food security under NAFTA and FTAA, contrary to the proponents’ claims that tariffs are being eliminated for the consumers to have cheaper products, the prices of imported products actually have risen, in general.
The Bolivarian Alternative for the Americas (ALBA) was given due to the efforts of President Chavez and was ratified in December 2002 (Fox, 2002).
Those who are proponents and fight for the implementation and existence of ALBA said that ALBA is an effective antidote to the US-backed Free TRADE Area of the Americas, popularly known as FTAA. ALBA aimed an alternative solution in achieving economic stability through cooperation and solidarity among nations. Also, LABA highlights the importance of retaining a nation’s sovereignty while being under a trade agreement.
Despite that the noble aims that ALBA proponents have laid, there are still questions and ongoing debates about this another trade agreement most especially on what exactly does “Bolivar’s alternative” constitute. There are ongoing debates and questions about the programs, joint ventures and agreements that the ALBA offers. And what is actually the concrete
alternative that ALBA is offering toward the economic stability that the agreement claims.
The first ever declaration under the umbrella of ALBA was signed by Cuba and Venezuela last December 14, 2004. The declaration affirms the rejection of the contents and rules of the controversial FTAA.
Mexico is viewed by the ALBA member countries as too inferior to go against the demands of the United States despite the woes of its constituents.
The FTAA and NAFTA are two different agreements with basically the same contents. There are even claims that FTAA is just an “identical twin” of NAFTA packaged differently. Both of the economic agreements offered unfair economic policies on the part of Mexico and other countries. From the provision son health, food safety, environment, among others, the two economic agreements practically offer the same things—and yes, the same threats.
Ideally, international policies are aimed at upholding and improving the economies of each signatory country. But in reality, what happens is that the most powerful country would have the greatest advantages and rarely that the other countries would really get some benefits from the provisions of the agreement.
Likewise, international economic agreements should put forth the interests of all the signatory members. In these situations, the inferior countries’ resources would just be taken advantage by the superior or powerful. From the environment up to the human resources, inferior countries are always taken advantage of.
Both the FTAA and NAFTA offered economic policies that have neglected the rights of the constituents of Mexico. But despite of all of the unfair treatments that the country has experienced, the elitist view of the majority of the Mexican policy makers are pushing for the implementation of the unfair economic and trade policies.
While the marginalized sectors of Mexico are being trampled upon, the Mexican government is still bent of pushing the “reforms” that they are claiming.
FTAA is just a duplication of NAFTA which has garnered many criticisms from the ones who have experienced the woes upon the implementation its policies. There have been studies conducted that showed that disadvantages of engaging in such economic agreements.
While the Mexican government is playing deaf and blind, the Mexican people and raging against these two repressive economic agreements.
The economy of a country, with no doubt, is a clear yardstick for the development of a country. Thus, different countries have been resorting to involving or as serving as signatories in a number of economic agreements without having a close scrutiny of the provisions.
But the again, the welfare of the constituents should also be considered simply because the progress of the economy would also depend on them and that they duly deserve to exercise their rights as the citizens of a particular country.
Baz, Veronica. “Mexico.” Center for Research in Development, 2004.
Beck, Juliette. “How Will the Ftaa Impact Consumers and Food Safety?” Mexico Solidarity Network, 2002.
Cevallos, Diego. “Nafta Equals Death, Say Peasant Farmers.” Inter Press Service December 4 2002.
Fox, Michael. “Defining the Bolivarian Alternative for the Americas – Alba.” Venezuelanalysis.com, 2006.
Hansen, Tom. “Free Trade Area of the America’s Overview.” Mexico Solidarity Network, 2002.
Ivins, Molly. “Mexico, Nafta and the Gop.” Boulder Daily Camera May 5 2006.
Jordan, Pav. “Mexico Ftaa Talks Hit Bumps in Race for Jan Accord.” Reuters News Service February 4 2004.
Kallagher, Kevin. “Free Trade and the Environment: Mexico, Nafta, and Beyond.” Americas Policy.org, 2004.
Lee, Thea. “How Will the Ftaa Impact Labor?” Mexico Solidarity Network, 2002.
Pastor, J. “Innovation in Mexico: Nafta Is Not Enough.” World Bank, 2002.
White, Marceline. “How Will the Ftaa Impact Women?” Mexico Solidarity Network, 2002.