North American Contradictions

We don’t buy into the scary, Lou Dobbs paradigm, but we do appreciate the coverage that Accuracy in Media has given to a recent conference on emerging efforts to create a North American Community.

As we read the tea leaves, a North American Community is the drift of continental elites, and a serious contradiction to the logic of walls. The Trans Texas Corridor is not being planned for nothing.

Trans Texas Corridor Planning Map
Source: http://www.keeptexasmoving.org

The question is: how are elite powers planning to sustain hyper-velocities of container traffic while they continue to militarize barriers against the free movement of American peoples?

In an email on Monday, a correspondent who prefers to remain anonymous compiled a set of recent readings on the North American Free Trade Agreement (NAFTA) which should be required reading for those audiences who love to suggest that Mexicans should solve their own problems at home before trekking Northward: FURTHER READING ON NAFTA:

A must-read NYT op-ed by Nobel prize winning economist Joe Stiglitz, who was also Bill Clinton’s chief economic advisor, titled “The Broken Promise of NAFTA”:

The celebrations of Nafta’s 10th anniversary are far more muted than those involved in its creation might have hoped.

…Growth in Mexico over the past 10 years has been a bleak 1 percent on a per capita basis — better than in much of the rest of Latin America, but far poorer than earlier in the century. From 1948 to 1973, Mexico grew at an average annual rate of 3.2 percent per capita. (By contrast, in the 10 years of Nafta, even with the East Asian crisis, Korean growth averaged 4.3 percent and China’s 7 percent in per capita terms.)

And while the hope was that Nafta would reduce income disparities between the United States and its southern neighbor, in fact they have grown — by 10.6 percent in the last decade. Meanwhile, there has been disappointing progress in reducing poverty in Mexico, where real wages have been falling at the rate of 0.2 percent a year.

…In the long run, while particular special-interest groups may benefit from such an unfair trade treaty, America’s national interests — in having stable and prosperous neighbors — are not well served. Already, the manner in which the United States is bullying the weaker countries of Central and South America into accepting its terms is generating enormous resentment. If these trade agreements do no better for them than Nafta has done for Mexico, then both peace and prosperity in the hemisphere will be at risk.

http://www.globalpolicy.org/globaliz/econ/2004/0106stiglitznafta.htm

An introspective op-ed by Brad Delong, a “Professor of Economics at the University of California at Berkeley” and “Assistant US Treasury Secretary during the Clinton administration,” titled “Has Neo-Liberalism Failed Mexico?”:

Six years ago, I was ready to conclude that the North American Free Trade Agreement (NAFTA) was a major success. The key argument in favor of NAFTA had been that it was the most promising road the United States could take to raise the chances for Mexico to become democratic and prosperous, and that the US had both a strong selfish interest and a strong neighborly duty to try to help Mexico develop.

…But the 3.6% rate of growth of GDP, coupled with a 2.5% per year rate of population and increase, means that Mexicans’ mean income is barely 15% above that of the pre-NAFTA days, and that the gap between their mean income and that of the US has widened. Because of rising inequality, the overwhelming majority of Mexicans live no better off than they did 15 years ago. (Indeed, the only part of Mexican development that has been a great success has been the rise in incomes and living standards that comes from increased migration to the US, and increased remittances sent back to Mexico.)

Intellectually, this is a great puzzle: we believe in market forces, and in the benefits of trade, specialization, and the international division of labor. We see the enormous increase in Mexican exports to the US over the past decade. We see great strengths in the Mexican economy – a stable macroeconomic environment, fiscal prudence, low inflation, little country risk, a flexible labor force, a strengthened and solvent banking system, successfully reformed poverty-reduction programs, high earnings from oil, and so on.

Yet successful neo-liberal policies have not delivered the rapid increases in productivity and working-class wages that neo-liberals like me would have confidently predicted had we been told back in 1995 that Mexican exports would multiply five-fold in the next twelve years.

http://www.project-syndicate.org/commentary/delong51

An excellent WP column by Harold Meyerson titled “NAFTA and Nativism”:

Over 40 percent of the Mexicans who have come, legally and illegally, to the United States have done so in the past 15 years. The boom in undocumenteds is even more concentrated than that: There were just 2.5 million such immigrants in the United States in 1995; fully 8 million have arrived since then.

Why? It’s not because we’ve let down our guard at the border; to the contrary, the border is more militarized now than it’s ever been. The answer is actually simpler than that. In large part, it’s NAFTA.

…But NAFTA, which took effect in 1994, could not have been more precisely crafted to increase immigration — chiefly because of its devastating effect on Mexican agriculture…From 1993 through 2002, at least 2 million Mexican farmers were driven off their land.

http://www.washingtonpost.com/ wp-dyn/content/article/2006/02/07/AR2006020701272_pf.html

A critical op-ed by Jeff Faux, who is the founding president of the Economic Policy Institute, titled “NAFTA’s Failure and the Increasingly Desperate Mexican Economy”:

Thirteen years ago, when illegal immigration from Mexico over a less-protected border was half of what it is today, we were assured that the North American Free Trade Agreement (NAFTA) would transform Mexico into a prosperous middle-class society. “There will be less illegal immigration,” promised President Bill Clinton, “because more Mexicans will be able to support their children by staying home.” Mexican president Carlos Salinas told Americans it was a choice between getting Mexican tomatoes or tomato-pickers.

But NAFTA did not deliver. Mexico has grown too slowly to create enough jobs for its people, and the benefits of trade have largely gone to the wealthy, making it one of the most unequal societies in Latin America. Moreover, the agreement flooded Mexico with highly subsidized U.S. and Canadian grain, driving between 1 and 2 million Mexican farmers off the land and adding to the supply of desperate Mexicans looking for work.

http://www.counterpunch.org/faux05152006.html

FURTHER READING ON THE EVILS OF AGRICULTURAL SUBSIDIES:

Must-read Stiglitz op-ed titled “The Tyranny of King Cotton”:

Americans like to think that if poor countries simply open up their markets, greater prosperity will follow. Unfortunately, where agriculture is concerned, this is mere rhetoric. The United States pays only lip service to free market principles, favoring Washington lobbyists and campaign contributors who demand just the opposite. Indeed, it is America’s own agricultural subsidies that helped kill, at least for now, the so-called Doha Development Round of trade negotiations that were supposed to give poor countries new opportunities to enhance their growth.

Subsidies hurt developing country farmers because th
ey lead to higher output – and lower global prices. The Bush administration – supposedly committed to free markets around the world – has actually almost doubled the level of agricultural subsidies in the US.

Cotton illustrates the problem. Without subsidies, it would not pay for Americans to produce much cotton; with them, the US is the world’s largest cotton exporter. Some 25,000 rich American cotton farmers divide $3 to $4 billion in subsidies among themselves – with most of the money going to a small fraction of the recipients. The increased supply depresses cotton prices, hurting some 10 million farmers in sub-Saharan Africa alone.

Seldom have so few done so much damage to so many.

http://www.project-syndicate.org/commentary/stiglitz76

Very disturbing NYT story titled “On India’s Farms, a Plague of Suicide”:

Across the country in desperate pockets like this one, 17,107 farmers committed suicide in 2003, the most recent year for which government figures are available. Anecdotal reports suggest that the high rates are continuing.

…Changes brought on by 15 years of economic reforms have opened Indian farmers to global competition and given them access to expensive and promising biotechnology, but not necessarily opened the way to higher prices, bank loans, irrigation or insurance against pests and rain.

Mr. Singh’s government, which has otherwise emerged as a strong ally of America, has become one of the loudest critics in the developing world of Washington’s $18 billion a year in subsidies to its own farmers, which have helped drive down the price of cotton for farmers like Mr. Shende.

WP A1 story titled “In Mexico, ‘People Do Really Want to Stay'” and subtitled “Chicken Farmers Fear U.S. Exports Will Send More Workers North for Jobs”:

But now, Martin worries that life in the central Mexican state of Jalisco is about to be shaken by globalization. Already much of Mexico’s farm country has been overwhelmed by an influx of crops from the United States in the years following the North American Free Trade Agreement. Over the next two years, the final provisions of the trade pact kick in, opening Mexico to unlimited imports of poultry from its northern neighbor. Mexican farms will compete directly with an American agribusiness nurtured by subsidies on the corn that feeds the birds.

“If a lot of chicken comes in from the United States, we’re not going to be able to maintain our farms,” said Martin, 39. “What’s going to happen? People are going to get fired. People are going to go north.”

http://www.washingtonpost.com/
wp-dyn/content/article/2007/01/06/AR2007010601265.html

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