Problems with NAFTA

In the early 1990s, George Bush was trying to master a plan to create a free, three-way trade agreement with Canada, Mexico, and the United States. The plans were initially secret but in 1992 when President Bush, Prime Minister Mulroney, and Carlos Salinas signed this two-thousand page agreement, the public was let in on the decision. Later, in 1993, new president Bill Clinton fought energetically for the acceptance of the North American Free Trade Agreement (NAFTA), and it became official policy in 1994.

“Policy issues are some of the most complex and far-reaching problems confronted by societies. Policy issues range from city problems to international and world issues, include conflicting sets of interest and objectives, need to be resolved in the face of uncertainty, and may affect millions of people” (Ley-Borras).

The terms of NAFTA include gradually reducing tariffs between the three nation-states, reducing non-tariffs for trade/investments by non-discriminatory practices, and leniency by the governments for businesses. It was also arranged for a secret panel to handle conflicts that may arise due to the Agreement. While many approved of NAFTA, opposition was fierce as well. In all three countries, there were those who feared the deal would raise unemployment in the United States and Canada, labor organizations would be undermined, environmental standards would be ignored, and congestion in transportation would occur. (McKillen)

While NAFTA benefits trading purposes it also has many difficulties associated with it due to actors at the industry level in each included country. If we are going to discuss the renegotiation of NAFTA then it must be realized that NAFTA has been hurtful to labor unions and the workers. The trucking, automobile, and agricultural companies are strongly opposed to the agreement There are also intranational actors that are involved, such as; Importer/exporter organizations, corporations, industry, service firm associations, agricultural producers, financial institutions, NAFTA officials, Congress, state/provincial governors, labor unions, environmental groups, small firms, farmers, and political parties. Because each of these groups like and dislike many things, NAFTA faces the difficulty of trying to please everyone. (Ley-Borras)

Congestion concerning transportation vehicles from the Mexican border into the United States is a serious concern. The borders have been opened to trucking and various solutions have been proposed. Solutions consist of restricting trucks from the highways or insisting they stay in the right lanes, slower speed limits on the interstates, and various taxes. These propositions often lead to further congestion and the tax money received is often used wastefully, an example being a bridge in Alaska that is rarely used. (Bailey)

Dwight D. Eisenhower, in 1955, said, “Our unity as a nation is sustained by free communication of thought and by easy transportation of people and goods”. Congress is currently feuding with the president over these transportation issues. In the original 1994 negotiations, Mexican trucks were conditionally allowed to haul their goods anywhere in the country, but environmental and labor groups have protested ever since. Congress has continued denying the trucking companies access well into the current year. (Lynch)

Senator Byron Dorgan is quoted saying, “We don’t have equivalent standards and most especially enforcement of these standards…To allow long-haul Mexican trucks under these circumstances would cause safety questions on American roads.” John Hill, who is the head of the Federal Motor Carrier Safety Administration (FMCSA), says that his agency will carefully inspect every Mexican carrier to see how it compares to U.S. safety standards. Dorgan replies, “…a colossal failure… [Hill’s agency] had not developed sufficient plans for checking every demonstration project truck”.

Hillary Clinton, a democratic presidential candidate, went against husband, former President Bill Clinton, by rejecting NAFTA. She insists that the benefits have gone to the wealthy and have cost occupational opportunities for people in America by outsourcing businesses to Mexico to pay a lower wage. The capitalist intent, contrasted to the socialist intent, is shown clearly through the principle of paying Mexican workers lower wages to maximize profits while people in the home country go without jobs. Hillary Clinton wants Americans to question whether or not the ideal of globalization has been fully embraced and taken advantage of. She feels this is not the case because of the problems encountered concerning NAFTA.

It also must be questioned whether or not these re-located businesses in Mexico are exploiting their workers. They are being paid low wages compared to the United States and there is a reason that labor unions are upset with NAFTA. Have the effects of low wages, child workers, and no labor unions been studied? Robyn Sears, a child development specialist, states that children are the very most important asset to a country, and every possible mean to protect them should be implemented. Environmental standards in Mexico, such as waste management, may vary from practices in our country. Is detriment to the environment acceptable? These questions must be analyzed and studied to find a real solution.

Mexico’s economy used to be completely dependent on oil and oil pricings. But because of NAFTA (1992), the United States’ industrial production began to control the economy instead. When U.S. economic growth slowed in 2001, Mexico was directly affected by this until 2003. Almost three-quarters of Mexican exports come to the United States, and the impact on Mexico is phenomenal. Is it moral and just that America can completely control other countries economies? The other side of this point is that Mexican consumers are now spending more than ever and lending more than ever from banking institutions. And the Mexican finance departments are expecting up to a four percent increase in economic value in 2008. (USA Today)

Because of the problems with NAFTA, there must be a call to action. The North American Free Trade Agreement must be renegotiated. Leaders must re-define the issue and participatory actors, develop a list of alternatives, and agree on a permanent position. (Ley-Borras)