Senate Appoints 10 Committees to Study Economic, Political, & Socioeconomic Impact of NAFTA on Mexico

SourceMex Economic News & Analysis on Mexico, February 3, 1999 | Go to article overview

Senate Appoints 10 Committees to Study Economic, Political, & Socioeconomic Impact of NAFTA on Mexico


The North American Free Trade Agreement (NAFTA) is entering its sixth year with mixed reviews on its impact on the three signatory countries. While some debate in the US and Canada has examined the effect of NAFTA on wages, the environment, and agriculture, the accord appears to have had the most far-reaching effect on Mexico. Because of the changes NAFTA has brought to Mexico, the Mexican Senate has formed 10 committees to study its successes and failures in different aspects of the Mexican economic, socioeconomic, and political landscape. The committees will consider NAFTA's impact in trade, immigration, US-Mexico border issues, the environment, transportation, and other aspects of Mexican relations with the US and Canada. Sen. Cristobal Arias Solis of the center-left Partido de la Revolucion Democratica (PRD) said the 10 committees will combine their results into a single report, which will be presented to the full Senate sometime in early March. Trade Secretary Herminio Blanco, Mexico's chief negotiator for the treaty, has been among the strongest supporters of NAFTA in Mexico. In a speech before the private US business organization Council of the Americas in Washington in late January, Blanco credited NAFTA with boosting Mexican exports to the US by 40% over a five-year period, expanding direct foreign investment in Mexico to US$11 billion, and creating 1.5 million new jobs in the country. The US and Mexican governments are quick to define the "success" of NAFTA in trade statistics. In a speech at the Universidad Iberoamericana in late January, US Ambassador to Mexico Jeffrey Davidow reported that US-Mexico trade reached US$200 billion in 1998, compared with only US$80 billion the year before NAFTA went into effect. Statistics published by Mexico's Secretaria de Hacienda y Credito Publico (SHCP) indicate that Mexican exports approached US$118 billion in 1998, of which roughly 80% went to the US. Mexican products now account for about 10% of total US imports, compared with about 7% before NAFTA. In his speech before the Council of the Americas, Blanco also credited NAFTA for helping create a buffer to protect Mexico during the economic crisis that followed the 1994 peso devaluation. In an interview with the daily business newspaper El Economista earlier in January, Blanco said the agreement has also provided a mechanism for the US and Mexico to address trade disputes. "There was no way to resolve disagreements before NAFTA," said Blanco. "We frequently had to appeal to the US to allow an increase of exports of textiles and steel." The US and Mexican governments have used NAFTA mechanisms to resolve disputes regarding tomatoes, avocadoes, and tuna (see SourceMex, 10/16/96, 05/27/98). NAFTA has varied regional impact on Mexico Some economists contend the benefits of NAFTA have been uneven in Mexico, with northern states like Chihuahua and Baja California becoming more developed but the southern states sinking deeper into poverty. "NAFTA has increased regional polarization like never before," said Enrique Dussel Peters, an economist at the Universidad Nacional Autonoma de Mexico (UNAM). "The inequalities are growing and will continue to increase." While some economists credit NAFTA with helping develop such sectors as automobiles, communications, and manufacturing, critics also point out the agreement has failed in its goal to create sufficient jobs in Mexico to help raise the standard of living. Economist Luis Rubio of the Centro de Investigaciones para el Desarrollo estimates that NAFTA has created about 1.5 million new jobs in Mexico. But most of these jobs pay only slightly higher than positions not related to NAFTA. "The manufacture of low-tech goods creates jobs like crazy," Rubio told the San Antonio Express-News. "They're cheap jobs, but they're the only job growth we have." Other critics argue that the Mexican government negotiated NAFTA without considering the disparities between the agricultural sectors in Mexico and those in the US and Canada. …

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Senate Appoints 10 Committees to Study Economic, Political, & Socioeconomic Impact of NAFTA on Mexico
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