NAFTA

Diego Martinez

(5/27/2012)

NAFTA: Don’t Focus on the Down Sides

The North American Free Trade Agreement, or NAFTA for short, is an agreement that made free trade between Mexico, the United States, and Canada possible. This accord was signed by George H. W. Bush, Carlos Salinas de Gortari, and Brian Mulroney in 1992 but didn’t take effect until January 1, 1994. NAFTA was and is a radical and revolutionary approach to increase trade between countries and promised a handful of things that many experts thought impossible to do. An aspect of the agreement that made it so radical was the fact that it lifted all tariffs that created complications with the trade between the three countries involved. This agreement also set the guidelines for the removal of all barriers of trade between these states in the next 15 years that are now at out doorstep. NAFTA has been fundamental for the growth of the economies of the three nations involved and even though the agreement has brought some discontent in the countries involved, the benefit NAFTA has brought does not compare to the down sides of said agreement.

Bill Clinton said in his speech welcoming NAFTA: “In a fundamental sense, this debate about NAFTA is a debate about whether we will embrace these changes and create the jobs of tomorrow, or try to resist these changes, hoping we can preserve the economic structures of yesterday.” NAFTA for many people was embracing the future, preparing for a globalized future in which borders were no longer important when talking about trade and commerce and this was the main reason why it was such a revolutionary step. NAFTA promised something many thought as impossible. During a time where Mexico was in one of its worst economic crisis in history it promised a future for Mexico’s economy and hope that Mexico could get out of that crisis in the next year or two. Clinton also said, “First of all, because NAFTA means jobs. American jobs, and good-paying American jobs. If I didn't believe that, I wouldn't support this agreement.” This was the main point of NAFTA, jobs. Mexico, the United States, and Canada needed jobs, needed that interconnection between countries to lend a helping hand. For every country this agreement meant something different.

For Mexico it meant a door to the North American market, a market full of promise and profit for small, middle and large businesses in Mexico. For the United States it meant cheap Mexican products, products that grew excessively in price the minute they crossed the southern border. For Canada also meant a possible raise in exports and a quick generation of good-paying American jobs, like Clinton described them. NAFTA though has not been this. From 1994 to today NAFTA has been an agreement in which the outcomes were not accounted for, an agreement in which you cannot predict what is going to happen and what was expected to happen did not. NAFTA is an unfair agreement in which only one or two of the countries involved benefit in a given factor of the economy and society.

While the agreement was being planned, Mexican government officials were very excited about it and wanted to forward the implementation date of the agreement. Government officials saw NAFTA as that long craved for doorway to the heaven that was the American market. The agreement, before its implementation, was mystery to most average citizens in Mexico so people didn’t really know what the agreement would mean for their businesses so at first business owners were cautious. After the dust settled about the agreement and some of the points and focuses of NAFTA were presented the owners of small and medium businesses were ecstatic. Another group that was frenzied with NAFTA was the automobile industry. This industry was to change immensely with NAFTA since it almost eliminated all tariffs on automobiles and automobile parts and we can see these guidelines reflected in Mexico’s exponential raise in all automobile related exports. Small and medium businesses, and the automobile industry, were the focus when NAFTA was being planned and the aspect of the country’s economy that was expected to have the deepest impact right after being implemented, but as stated earlier, NAFTA is a phenomenon in which the outcomes cannot be predicted.

Sections of the economy that were unsettled by the agreement were the Mexican Stock Market, or the Bolsa de Valores, and many of the average citizens. At first no one knew what NAFTA actually meant but many Mexicans saw NAFTA as a way in which the United States would force Mexico to be even more subservient to them, that the United States would only profit from Mexico’s cheap labor. They saw this agreement as just another sign of American neo-imperialism. That confusion that surrounded NAFTA at the beginning of the negotiations actually settled for the Bolsa. But even with an atmosphere of confusion surrounding the stock market those involved with it knew that the agreement might promise a bright future. They predicted that NAFTA, in a general sense, would be a doorway to modernization and integration to different markets around the world and Mexico’s strong economy in 1992 gave a bright face to what NAFTA meant to Mexico but this bright face didn’t last long. All of these hopes came to a halt with Mexico’s 1994 crisis, or Tequila Crisis, as it was called in the United States.

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