While NAFTA has cost us dearly with job losses, downward wage pressures, and increased social costs, Mexico's fragile economy has been wrecked by this fake free trade agreement. Thanks to CAFTA, expect similar statistics from Central America in the coming years.
http://tradealert.us/news_item.asp?NID=2550032 Free trade agreements spur immigration
By Gina-Marie Cheeseman
Online Journal Contributing Writer
Mar 15, 2007, 01:14
NAFTA is an acronym that should be mentioned every time the corporate media reports on the illegal immigration issue. It stands for the North American Free Trade Agreement, which established a free-trade zone in North America. Signed by the United States, Canada, and Mexico in 1992, it took effect on January 1, 1994, but immediately lifted tariffs on the majority of goods produced by the three participating nations, and called for the gradual elimination of most trade barriers over a 15-year period.
Touted as a means to lift Mexico out of poverty, NAFTA has actually driven it further into poverty. According to the Economic Policy Institute’s 2001 report, “Mexican wages have decreased 27 percent since NAFTA, while hourly income from labor is down 40 percent.” Free trade did not benefit the Mexican economy because by definition free market trade includes privatization, which in turn eliminates state subsidies and controls, and almost never includes redistribtion.
The 2001report by the Economic Policy Institute also found that when Mexico began NAFTA negotiations it had “noncompetitive production costs . . . due to higher prices for inputs such as diesel and electricity, higher financial costs, and higher marketing costs (due to deficient infrastructure in highways and warehouse storage . . . among other factors).”
John Warnock, economist and author of The Other Mexico: The North America Triangle Completed, defines free trade as being “about private investment rights.” Warnock cited a World Bank Report from March 2006 where it is mentioned that the poorest 10 percent of the population earns only 1.5 percent of the total Mexican income, but the richest 10 percent earn 42.8 percent. “The distribution of wealth, which would be very hard to measure, is believed to be much worse.” The March report by the World Bank also claimed that since NAFTA the number of Mexican people that live below the poverty line is “62 percent of the economically active population.” The minimum wage has fallen by 40.7 percent. The Mexican government sets the poverty line at two daily minimum wages for a family with five members, or 80 pesos, about seven dollars.
A startling statistic comes from the Mexican government. Between 1993 and 2000 the disparity between Mexican and American manufacturing wages has increased from $9.6 to $12.1 per hour. Reports by the Organization for Economic Co-operation and Development (OECD) state that wages in Mexico have dropped by 10 percent since 1995 while labor production increased by 45 percent. Work hours have increased from eight to 12 hours a day during the same time period. The number of people working more than 48 hours per week has increased since 1988 from 2.3 million to 9.3 million.
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