(LUIS ACOSTA/AFP/Getty Images)

Twenty years ago this month, the historic trade accord between the United States, Mexico and Canada — the North American Free Trade Agreement (NAFTA) — went into effect. Two decades later, we consider the successes and failures of the trade agreement, and how it has changed conditions for the three countries involved.

Guests:
Lori Wallach, executive director of the Public Citizen's Global Trade Watch, a non-partisan non-profit group that monitors groups like the World Trade Organization and agreements like NAFTA
Manuel Suarez-Mier, director of the American University's Center for North American Studies who aided in NAFTA negotiations for Mexico
Carla Hills, chairman and CEO, Hills & Company; former U.S. trade representative
Manuel Perez-Rocha, fellow, Institute for Policy Studies

  • EIDALM

    N.A.,F.T.A. while enriched the Wall street and multinational corporations .it did lots of damage to the U S economy and ruined the Mexican economy. It totally destroyed the small farms owned by Mexican families as well as small factories in Mexico that was own BY Mexican people. N.A.F.T.A. has led to extreme poverty in Mexico that led to the out of control drugs violence and the floods of Mexican immigrants to the U S and the loss of life to many of them….iN SUMMERY N.A.F,T.A, WAS SHAFTA TO BOTH THE U S AND MEXICAN PEOPLE.

  • Livegreen

    The environment being excluded from International Trade Agreements, including NAFTA, is fundamental to decimating the American Textile industry & other manufacturing. In the U.S. every textile factory must clean it’s water output to be as clean as before it entered. Production in China & Mexico where waste water is dumped into the rivers & oceans = an immediate cost savings and lower priced products in stores. It is killing jobs here & the earth.

    20 years ago when NAFTA was being discussed at the Foreign Policy Association I asked the Mexican representative why the Environment was not integrated into NAFTA. He replied that Mexico was not ready to implement improved environmental laws but would instead work on making incremental improvements.

    Has Mexico improved pollution output from it’s factories, as it said it would? When if ever will the U.S. integrate the environment into it’s International Trade Laws? Or will Trade Agreements continue incentivizing increased pollution & toxic dumping into our waterways?

    • chrisnfolsom

      IF Mexico had a reason to invest in it’s people, or it’s environment it would, but when they have China, Vietnam, Sri Lanka etc nipping at their heels they will just work on reducing price – you only spend when you feel you can.

      The cost of an individual cannot be separated from the cost of their environment. Without regulation, or a long term view business is a race to the bottom, the lowest common denominator – which has nothing to do with humanity – but you might make a buck…. business would treat people like pigs in a pig farm if they could legally get away with it – they could justify it somehow, or just subcontract and not worry about it… And unfortunately I really don’t think I am being sarcastic..

      • Livegreen

        Agreed. However it’s not even a choice for many businesses: most cannot do it or they will simply go bankrupt. A few can use it to their marketing advantage, but most consumers shop by price alone.

        Some by choice, many by economic necessity.

        As the lowest price & companies like Amazon & Walmart win, it only drives the cost to labor & the environment down further. The only end game is higher pollution levels, unless the environment gets written into trade laws. Yet the U.S. & third world nations alike do exactly… nothing.

        • chrisnfolsom

          Indeed – a market driven economy is a scary thing…yet many businesses shape the market drive through advertising – and they say they are just giving the customer what they want… sounds like a date rapists excuse…

          We can all see what efficiency has done to business with Amazon and Walmart and we can all see how a few businesses profit, and many loose in the long run as they cannot compete against large retailers for long.

          So we have to discuss what are our options, what should we do?

      • Menelvagor

        BUt they do treat people like pigs. They have even been refereed to as dead peasants by many corporations/insurance schemes.

      • btraven99

        Mexico is becoming an aerospace manufacturing and maintenance hub because it is investing in its people. The standards are very high and the margin for error is very low in that industry.

  • GiorgioOrwell2nd

    NAFTA and any of the “free trade” agreements that the US has entered over the past 20 years have been VERY good for investors, and absolutely job negative for the US as a whole. This isn’t just jobs moving south, it’s manufacturing jobs moving to all of the developing countries we signed agreements with, most notably China. The mention that Mexicans spend 50% of their income on US products is a nonsense statistic if talking about actual US jobs. The only factory type jobs left in the US are heavily automated, not exactly job creators, the rest have all left. Again, NAFTA has been great for shareholders and corporate executives…not the average american worker.

  • Robert Thomas

    World trade and the mobility of operations to other nations has had a negative impact on manufacturing operations in the United States. The simple fact is that without NAFTA and related agreements, the decisions to move these operations offshore would have been more precipitous, not less.

    I’m a manufacturing engineer with a lot of experience directing operations in places as diverse as Guadalajara and Monterrey, Mexico, Penang Malaysia, Suzhou and Shanghai, China; Ireland; California, Wisconsin and Toronto, to name a few.

    There is utterly no question that the NAFTA agreement has increased the total commerce between these regions. The advancement and improvement of operations in Mexico has had its greatest effect within my industry in moving operations from Asia BACK to North America. Operations added in Mexico have in turn enhanced activity in the U.S. I have seen this in my industry and colleagues in related industries have seen it. It’s a fact.

    In discussions such as the present one, long-time axe grinders serve to reanimate a lot of dead zombie rhetoric but illuminate little.

    • chrisnfolsom

      I agree the affects have not all been bad, and that with the Global Economy American workers were in for a rude awakening whether through NAFTA, or other trade issues. Of course the trade channels of Walmart and such pushed things along more quickly. What is not discussed is what the resulting labor rate in America should drop down to – and is that enough to live on, much less to live “The American Dream”.. If not the American person should be told at what level they are expected to live at so they can stop using credit cards and waiting for wages to go back up, or to win the lottery.

      • Robert Thomas

        I get your point. Whether because of denial or due to being mislead by institutions including our government, our press, our employers and others – or all of the above – not merely refraining from NAFTA and related negotiated agreements, but positively acting to STOP existing trade through VAST increases in tariffs would have been required to maintain status quo.

        This (decision to trade or to protect) was inevitable, considering the awakening of manufacturing capacity of the entire planet, dormant since the end of WWII or earlier, that at least in metropolitan areas of the U.S. I’ve frequented in the last thirty years has become illustrated very starkly in the dominating prevalence of Japanese designed and manufactured automobiles in place of American marques.

        • chrisnfolsom

          Still you look at Germany – an they have even absorbed millions of East Germans and they have weathered the transition to the mobile economy quite well through a combination of social controls and some planning. They are smaller and you cannot directly compare them, but they have done pretty well….

          The reality is that the US middle class was an anomaly that only happened (as most anomalies do) due to the conjunction of a few factors and forced companies to have to compete for workers and pay the middle class of America and move more wealth to the middle class then ever had been done before –
          1. A lowered competition due to 80 million dead from WWII (much fewer from the US), and 30 million men of working age…
          2. Russia, Eastern Europe and China had closed markets and much lowered competition.
          3. The US had millions of men who were getting free school.
          4. There was a revolution in electronics and new products that had never existed before, and few could easily duplicate – there were 300 radio manufacturers alone in the U.S.
          5. No global manufacturing market – it was difficult to move manufacturing around easily to different countries.
          6. Cold war paranoia pushed huge amounts of government money into the private sector, schools creating technologies and products that again had never existed and could not be easily duplicated.

          The US could almost not loose in that environment. Employers will not pay their workers more then they need to either by market or political forces – the ONLY reason the middle class of America – which included people working on assembly lines – got paid as much as they were is because businesses had not figured out how to work around them…. I am not saying this is evil, but was just a product of the business environment of the US for 50 years which is now gone – we all have to decide if we are going to use our government to try and control things, or just let the market do what it will… I fall more on the side of planning a few things – not everything.

          • Robert Thomas

            I also find myself asking, “what about the German experience, though?” I don’t have any history that allows me to feel I understand their post-war success (I have a little better understanding of Japan’s achievement). One set of differences is that Germans were protected from downward pressure on wages from immigrant labor (Turkish, et. al.) until recent decades, allowing institutions to rebuild after WWII in a very homogenous, “high-trust” civil and commercial environment. At the same time in the U.S., the same (industrial, not agricultural) commercial and civil institutions merely took up and rekindled pre-war antagonism between capital an labor that was only quelled by the truce they made while enjoying the explosion of world-wide markets which were easily dominated… blah, blah.

            That’s not news, I guess. Let’s study the Germans’ successes in manufacturing more closely.

          • TrainedHistorian

            You forgot to add that America also had very low immigration rates in the 1945-75 period, lowest in its industrial history. Illegal immigration in the 1980s soon reversed that and after the fiasco of the 1986 Immigration non-Reform act employers figured out that they can have essentially open borders now because nominal immigration limits will not be enforced in the workplace against either the undocumented or against those who hire them. On the contrary illegal immigration is actually rewarded with legalization programs. Result? More immigration of the the low and medium skilled, and wages for low and medium skilled who are already here continue to stagnate or decline, even though productivity is rising.

          • chrisnfolsom

            Women entering the workforce also created large issues. I am not so hard on the Immigration as it is much less then many other countries – but allowing businesses to make money by manufacturing elsewhere rather then through R&D and other MUCH more difficult processes was the wrong reward mechanism. How many CEO’s do we have who’s primary way of making money over the last 20 years is by reducing labor and outsourcing production – is this REALLY what a company is about? I though it was the products and services, the employees? What is the value of a company to society? If you reward people for purely administrative decisions rather then the very, very hard decisions of long term business development, suffering and sacrifice then this is what we get, and have. Everything is so short term in the micro economic concerns of a company, or even a corporation – we need to have longer term planning and resource allotment. Business needs to be involved in Government, but working together, not just trying to manipulate government to reduce their expenses vis-a-vis regulation and licensing, or trying to make a buck getting subsidies.

          • TrainedHistorian

            Ending legal discrimination against US women in wages, educational institutions, and the jobs they could apply for is in NO way comparable to our insane immigration non-policy. In every population, there are always about 50% females born to males, thus we will always have about as many females as males. It is grossly unfair to them, who are always born and cannot be unborn, and who thus will always be here, you have no right to be paid the same as a male born here if you’re doing the same job, you have no right to get the same schooling as a male born here, you have no right to apply for the same jobs as men; to survive you must depend on a man, even if he is violent and abuses you and your children physically or sexually because we will not allow you to work outside the home for a living wage. Immigration is quite different. We already have 200 million plus people born here . We do NOT have to take in the rest of the world (about 7 billion people) in addition. We can restrict the numbers of immigrants that we take if we actually enforced our laws. We cannot restrict the numbers and proportion of females born here.

            And immigration to the US is not “much less” that elsewhere. We take in the largest absolute numbers, and also have one of the highest per capita immigration rates.

          • chrisnfolsom

            As the son of an immigrant and not Native American I can only say that I agree, but have not right to limit things. I was not bringing women up as a comparison, but bringing women into the workforce did have a profound affect on our society in many ways and also contributed to the smaller families we now have – in balance to the immigrants who have much larger families – until one or two generations until they assimilate.

            Politically we need to work on immigration reform – fell lucky we aren’t neighbors to Africa like Italy and Greece or we would really have some issues to deal with as there is more then a displacement issue as race and tolerance are brought into the picture and I am sure most “real” Americans have issues with Spanish speaking Catholics, but Muslim blacks would have our border crawling with “Minutemen”…

            At least we had a few years where things were so bad immigration from the south was even, but now that things are getting better I am sure we can expect more poor souls to come here and compete.

            IF we weren’t so greedy we wouldn’t give them jobs as they really want and need work – which we give them so to me – in reality, we create and live with the results of a few people (and large industries) to profit.

    • Robert Thomas

      Thanks, Dr. Krasny, for delivering my assertion to your panel.

      I agree with Mr. Perez-Rocha that my observation amounts to a “classical” argument generally in favor of such negotiated trade agreements. It’s “classical” because it’s sensible and corresponds with the case.

      In the next breath, Mr. Perez-Rocha bizarrely assigns the ills of Mexican society and including the rise of “narco-terrorism” to NAFTA. If that’s the sort of exhortation that passes for successful rhetoric now at the IPS, I despair for the condition of International Trotskyism (for which I have a nostalgic and wistful fondness).

    • Menelvagor

      We get it! You love profit but hate people. You are anti-American. You are a vampire. You people make me sick.

      • Robert Thomas

        Ana Ng and I are getting old
        And we still haven’t walked in the glow
        Of each other’s majestic presence
        Listen Ana
        Hear my words
        They’re the ones you would think
        I would say If there was a me for you

  • GiorgioOrwell2nd

    Adam Smith’s so called “invisible hand” in the free markets, was exactly the opposite of what most economists describe it as when talking about international trade..He used it two times in his writing, the first was talking about the internal dynamics of a national closed market and the actions of individuals in markets…the second time he used it he as talking about the invisible and benign hand of the patriotic stance that would influence mercantalist/capitalists to work for the benefit of their own countries national industry and society.This is literally exactly the opposite of what your guest and most economists describe free trade and globalism as. Modern day globalism, holds the interest of the shareholder above all else…this is a perversion. Sure, we are all hooked on cheap goods from Walmart now, but that’s because we’re broke.

    • Menelvagor

      you can mend, knit, or pay people that do. you can buy second hand clothes. you can pay local people or tailors to be creative and make clothes. we’re all broke so I am sure local brokes will accommodate. local markets are the only way. Do not feed the beast. The other problem is we are so vain.

  • chrisnfolsom

    I remember moving our company to mexico (Mexicali) in 1998. I remember looking at the workers faces, faces that grew up in rural areas and move to Mexicali to get a job and to perhaps get the dream of a middle class life (American jobs, American lifestyle..). In the US our workers earned about $80 a day. In Mexico wages were $10 a day. When I was talking to some of the other corporate workers at the Hotel who had done work in China he said their workers were making 80 cents a day (for 10 hour days). Thinking about that Mexican workers face I knew he didn’t have a chance as he would never make more then he was currently making – which was not enough for any dreams….

  • Enirque

    There is no doubt that the opening to free market has help Mexico and Mexican in general. today Mexican have access to many more services, and products than before, and NAFTA has created thousend of jobs. Here in America with a wider field of future buyers for our america made product it has being and will be a win win for all.

  • chrisnfolsom

    The only thing that is free is that the monied interests are able to manipulate the system more for their own profitability – lower labor to push labor costs down, and lower tariffs to allow lower cost products to disrupt native manufacturing (and jobs). IF there are controls it might work, but we all know control is not in the hand of the masses. This is not evil necessarily, but business. The effects ARE evil though.

  • Fay Nissenbaum

    I’m surprised you didnt read aloud the words of Bill Clinton, who has said and written that he regrets NAFTA.

    Hillary, in her her campaign for the nomination, said she would renegotiate NAFTA:
    Hillary Clinton: “I have said that I will renegotiate NAFTA, so obviously, you’d have to say to Canada and Mexico that that’s exactly what we’re going to do. . . . Yes, I am serious. . . . I will say we will opt out of NAFTA unless we renegotiate it, and we renegotiate on terms that are favorable to all of America. . . .”

    Here are the President’s own words:
    http://www.salon.com/2008/02/25/clinton_obama_and_nafta/

    • Menelvagor

      politicians will say anything. You dont really believe that do you? Corporations do not want to pay wages–they are never coming back. Thats why we are witnessing the biggest corporate heist in history–they profit profit profit while we go hungry.

      Now they are ramming thru the Trans-Pacific trade agreement where Americans will lose ALL rights to make laws or enforce laws or protect american environments–domestic and foreign corporations will have the right enforce pollution in your backyard–they will have the right to destroy any laws or actions taken to limit their pollution or profit in your neighborhood. Jobs will go deeper into asia and their hope is to open N.K–then all the jobs will go there.

      What we need is protectionism. And local industry. We dont need cheap goods. we should pay the fair prices. w e should buy local–only. empower you neighbors. empower your community.

      “to have closed markets is to diminish opportunity”–rubbish. to empower local people is to create opportunity. to export opportunity is retarded and greedy and cruel and evil and anti-american.

  • chrisnfolsom

    The first thing we did when moving manufacturing to Mexico (the was 3M corp) was to take all those expensive annoying safety devices off the equipment and instead of using modern Quality at the Source, Just in Time Manufacturing and all the other fancy acronyms that we had implemented with pride and implemented very well in Central California and went right back to batch manufacturing as they didn’t want to pay their workers enough to actually train them, and have any retention – the maquiladora were all subcontracting and keeping labor as cheap as possible and the workers would go from company to company. From what I have heard this has not changed much. The one service I saw that was above that of the US is that they had a nursery so all the young mothers could drop their kids off so they could work all day…

    • Robert Thomas

      chrisinfolsom, I’ve had some similar experience and share your dismay.

      Do you believe that refraining from entering into NAFTA (or the GATT, or the WTO) would have prevented the relocation (dislocation) you describe?

      The first such activity I was involved with was with operations that started up in Malaysia in the 1980s, long before NAFTA. I was mentored by other professionals that had done the same with production facilities in El Salvador in the 1970s. I think we felt that our south Asia experience was an incremental improvement (with respect to such things as dislocation of domestic workforce, promotion and encouragement of local skilled labor in Asia, leverage of what were then new practices in production quality engineering, safety engineering and so on) over the Central American project (which had amounted to a collision of eighteenth and twentieth century worlds) but not much better than that.

      In contrast, recent relocations (as I mentioned here elsewhere, and not for the same employer) from Asia to Guadalajara and Monterrey have been far more satisfactory. Another “redeployment” – not across continents but across the bridge between Penang and mainland Malaysia – has offered better trained staff and more modern, efficient and environmentally and safety compliant facilities within Malaysia. In turn, the contract manufacturer who lost this business has begun re-investment and re-training that may earn back some of their business.

      At least partly due to NAFTA, I see a major competitor of my employer is taking advantage of the relative proximity of Mexican operations to re-launch associated manufacturing in Missouri, Texas and Wisconsin. I expect others of us may consider this as well.

      • chrisnfolsom

        I hope (and have heard) that some business is coming back and of course this is a good thing although I am sure that will not mean the number of middle class jobs, wages and such will be there as we remember from the 70’s. The pendulum always swings back – unfortunately this has large implications for peoples lives and the main reason for moving over seas to me was more of a cultural thing supported by NAFTA and more companies left then needed to as it became more of a mindless stampede then a thought out long term solution.

        I can’t even imaging all the supply chain jobs, skills and machinery that were lost when moving manufacturing overseas – perhaps a good thing as when moving back new machinery will be much more efficient although of course much fewer operators… It took the catastrophe what was the 80’s auto industry (and the pressure from Japan) to actually make the auto industry reinvest and finally after 2000 US cars actually competed and not moving manufacturing to the non-union south it seems that there is some equilibrium in the auto market – it would be nice to see a comparison of a 80’s auto workers job and bennies vs today’s new auto worker in the south…..

        Part of the issue with Mexico as they were in the dark ages in 2000 – we were lucky to have power…. and every week our “Technician” would have to stop and go pump the toilet at the front of the building and cart the drum containing the feces through the production floor to the back to be dumped – and for that reason workers would put feces laden toilet paper in the trash can next to the toilet, but I digress.. I hope that things have improved in their infrastructure over the last 7 years (since I was last at the border).

        • Robert Thomas

          I don’t doubt that conditions for production AND for workers still vary enormously from place to place in Mexico and I admit that my experience is my anecdote. I can report, however, that I was surprised by the quality of the facilities and the sophistication of workers and engineers I’ve encountered in Guadalajara and Monterrey. Notably, NEITHER is a border operation and they are both serving higher-technology-than-average contracts and so this description is skewed accordingly. I can also report, on a positive note, that these same facilities are good customers for U.S. -designed (and in some cases, -built) systems and instruments.

          I certainly admit that these happy conditions in no way amount to a solution for dislocation of large numbers of American people.

          • chrisnfolsom

            I hope thing are getting better – I still doubt though that there will be any middle class as the US was able to have for many years although I am sure many will do better.

            Back in 2000 one of the largest difficulties where the skilled trades – technicians, machinists and such. Many manufacturers brought their own technicians as the skills were nonexistent with molds, presses, electronics and such. You could teach some, but you never know what you wold get.

            We had quite a few “engineers” that needed quite a bit of training and eventually were great, but my concern here was for the lowest class who were lured with a dream and stuck there. Americas manufacturing wages went up 90% from 1950 to 1978 do we expect any other country to see such a rise?

  • Kurt thialfad

    NAFTA is unconstitutional, having not received the 2/3rd majority of the Senate, as required of all treaties.

    • Menelvagor

      i dont know if this is true–but is definitely wrong–evil.

      • Kurt thialfad

        It is true. NAFTA passed 63-35. It did not get the 2/3rd majority of the Senate. Look it up.

  • Menelvagor

    obama administration is bringing us the TPT. Sure they can say they want out of nafta–it probably makes something easier in initiating TPT. Lairs and crooks all of them–including the Obama puppet.

  • btraven99

    Seems if we are discussing narco-violence, we should mention the role of US demand for drugs and US supply of firearms. The big picture for all of this must include that Mexico is our neighbor and we have a stake in its success.

  • TrainedHistorian

    LIsten to Ms. Hills about 47 minutes into the program. Her attitude summarizes the problem in a nutshell. Ms. Hills is clearly far more perturbed that foreign countries are–poor dears–inconvenienced by our democratic institutions–because Congress may try to object to parts of an “agreement” that–what really?–do not represent Americans’ interests–than she is by the lousy economic conditions that so many workers here now face because employers, due to policiies like NAFTA (although certainly not only NAFTA)can pay most of us wages so low that we can barely survive, let alone save anything for higher education, a house or any other investment..

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