The Future of NAFTA

I’m just back from Mexico. Not the Mexico of gleaming beaches and gringo-oriented resorts, but poor Mexico, where a decade of the North American Free Trade Agreement has taken a terrible toll.

I visited Mexico City, the largest city in the world, with 25 million inhabitants. Mexico, the country, has 100 million inhabitants, so one of every four people in Mexico lives in Mexico City. It’s like five New York Citys in one place, but because Mexico is prone to earthquakes, few of the buildings are more than three stories. The city ranges out in all directions and is covered in a thick blanket of brown, choking smoke. Housing density is 6.5 people per room.

I spoke with Professor Ross Gandy, a U.S. citizen who has been living in Mexico for decades and teaches at the National University. I’m indebted to him for the statistics on Mexico’s post-NAFTA “prosperity.�

Mexico City has 4.5 million cars, which is probably a record, but it also means 70 percent of the people living there don’t have a car. There is a limited urban train system and small, rickety buses can be seen on every street. Nothing moves very fast and people who live in one part of town and work in another are on the street well before dawn.

Four million people in Mexico City (probably not the same four million that own cars) have no sewage. That means no sewer pipes, no septic tanks, no cesspools, nothing. The odor from tens of thousands of tons of human excrement wafts into the brown cloud of pollution every day. The stink goes up, the fecal coliform goes down. Given that, it’s not surprising that half of Mexico’s water is polluted and unfit to drink.

Two-thirds of Mexico’s industry is located in the Valley of Mexico, where Mexico City is. Oh, and because Mexico City is in a valley, it’s subject to air inversions, which means air can be trapped over the city for days, with all the industrial smoke and traffic exhaust and stench of human shit.

A quarter of the people and two-thirds of the industry are in and around Mexico City because, under NAFTA, small Mexican farmers cannot compete with cheap grains – corn, particularly – flooding in from the U.S., so people move to Mexico City or to the maquiladora region along the U.S. border, looking for factory work.

If a Mexican gets a job in one of these factories, he or she might earn the daily minimum wage of 46 pesos a day (about $4 U.S.). Those that have jobs have to support their relatives, which means half of all Mexicans live on $2 U.S. per day or less.

Unfortunately, this is a problem. The $4 per day Mexican industry pays is uncompetitive with factories in China, which pay 25 cents (U.S.) each day. The challenge for President Vicente Fox and other leading politicians is to figure out how to drive down the minimum wage fast enough to remain competitive, but without touching off a revolution. (Mexican politicians, by the way, are the highest paid on earth. While I was there, Mr. Fox and the legislature were squabbling over how many millions of dollars should be allocated to the annual wardrobe budget for Mr. Fox and his wife, Marta Sahagun.)

Fortunately for Mr. Fox, he has a safety valve – the U.S. border. Millions of Mexico’s most ambitious young people sneak over the U.S. border each year to perform tasks Americans won’t touch. This, in turn, helps U.S. employers keep wages down (often below the federal minimum wage) and helps employers (particularly in the south) prevent employees from organizing unions, all of which moves the U.S. along the road Mexico is traveling.

Legal and illegal Mexicans in the U.S. send back around $13 billion U.S. dollars each years, which means remittances are just behind oil revenue (around $14 billion annually) as Mexico’s leading form of income. (Oil income trails drug income, which is roughly estimated to be $30 billion a year, although much goes into offshore banks.)

Ten years of NAFTA have left Mexico a narcostate that sells her citizens to multinational corporations for as little as possible, a nation in which half the people live in squalor, malnutrition and disease.

© Mark Floegel, 2004

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*