me said:
3. However, despite 14 years of "free trade", the percentage of Mexicans living in poverty has not decreased.
Corsair 115 said:
How or why should NAFTA be blamed for that? Might not the reasons have more to do with the Mexican government and its domestic policies
I have no doubt that the domestic policy of all three nations plays a major part in all of this, probably more directly than NAFTA itself.
However, back when President Clinton was "selling" NAFTA, there were two "talking points" repeated ad naseum:
1. NAFTA will increase trade- indisputably true
2. Increased trade will reduce poverty - I contest this as false
Throughout the past 14 years, the percentage of Mexicans in poverty has stagnated, while the number of Americans in poverty has increased slightly. All the while, both nations have enjoyed record-levels of trade.
Therefore, I reject the notion that a direct corollary exists between trade v. poverty. The two factors appear unrelated, given the past decade of data.
Does this mean NAFTA has failed? That depends on what NAFTA was supposed to do. If NAFTA was supposed to decrease poverty, then yes, it failed. If, however, that was simply political rhetoric, and the purpose of NAFTA was to increase trade, then no, NAFTA has not failed at all, it did exactly what it was designed to do.
It quite possible, I would argue probable, that International trade agreements affect different classes quite differently.
If NAFTA allows me to relocate my production to Mexico, thus cutting my costs by 50%, I can increase profitability while simultaneously dropping price to increase my market share. I would say NAFTA is good.
If NAFTA allows me to purchase quality products at a lower price as a consumer, I would also say NAFTA is good.
If the quality of those goods decreases disproportionately to price (i.e. cheap WalMart crap not worth even the low price they charge) I would say NAFTA is bad.
If my job is outsourced to Mexico, I would say NAFTA is bad.
If my job is created as a result of this relocation, and my new positions as "Director of Mexican Production" allows me to earn more money and advance my career, I would say NAFTA is good.
I would argue that NAFTA is both good and bad, depending on where you fit into the global economy. However, I think the higher-up the chain you find yourself, the more "good" it is for you. Plenty of people have made plenty of money in the last decade. However, plenty of working class folks have lost their jobs, and suffered a decrease in standard of living during this same time.
But- we cannot generalize that NAFTA is bad for the working class. Case in point- with an influx of new jobs to Mexico, I would expect the Mexican working class to be very pro-NAFTA, and enjoying new opportunities for advancement that were unavailable pre-NAFTA.
But this has not happened. Poverty in both countries (USA and Mexico) has either stagnated, or gotten worse. This causes me to question "free trade", and suggest that perhaps some protectionist policies (i.e. Steel tariffs) may be essential to our national economy. On the other hand, perhaps these free trade policies simply need more time to achieve equilibrium.
But after 14 years (and as mentioned, longer with Canada), I have to ask: how long are we supposed to wait? At what point is it reasonable to suggest alternatives?