The North American Free Trade Agreement (NAFTA), enacted in 1994, was supposed to bring prosperity to Mexico, as well as the United States. The prosperity that was promised did not come to either nation.
What NAFTA did to the American economy is well documented [Charles: modest gains at the cost of many blue collar jobs]. What it did to Mexico has received much less media attention, but if you want to know why so many people are risking their lives to come to the United States, these statistics offer an explanation.
- NAFTA permitted U.S. agribusinesses to undercut Mexican farmers by allowing the United States to sell corn and other agricultural products at a lower cost than Mexican farms can produce them. As a result, more than 2 million Mexican farmers have been forced out of agriculture in the past decade, and the ones that still farm live in desperate poverty.
- NAFTA allowed the big box stores such as Wal-Mart to enter the Mexican market. Wal-Mart, which mostly sells goods made by low-wage workers in China, put more than 28,000 small and medium-sized Mexican businesses out of business over the past decade.
- Wages for Mexican workers have fallen by about 25 percent in the past decade. In the "maquiladoras," the American-owned sweatshops, the hourly pay runs between 60 cents and $1 an hour, a salary that is not enough to live on even at a subsistence level.
Compare this approach to what happened in the European Union. Before it admitted then-poorer nations, such as Spain, Portugal and Greece, to the EU, they received massive investments in health care, education and public infrastructure. Democratic reforms and worker rights were also preconditions to entry.
Now, it's not all NAFTA's fault. If the Catholic Church had not threatened Mexican Catholics with excommunication for using contraceptives, population growth might have come at a manageable rate. If the Mexican government hadn't gotten screwed on oil development in the 1970s, there might have been the money to rapidly raise educational standards. But the combination of devastation of farming/small business, unfair oil deals, and a population explosion made Mexico's situation untenable.