It's Good at the Top: NAFTA Promised to Raise Wages and Living Conditions in the United States, Mexico, and Canada, Yet the Middle Class in These Countries Is Getting Poorer While the Rich Get Richer

By Scaliger, Charles | The New American, October 15, 2007 | Go to article overview

It's Good at the Top: NAFTA Promised to Raise Wages and Living Conditions in the United States, Mexico, and Canada, Yet the Middle Class in These Countries Is Getting Poorer While the Rich Get Richer


Scaliger, Charles, The New American


"Free trade agreements are designed to force adjustments on our societies," Donald Johnston, former Canadian MP and cabinet minister, once remarked. Mr. Johnston ought to know: a longtime vociferous supporter of both NAFTA and its bilateral predecessor, the 1989 free-trade agreement between Canada and the United States (CUFTA), Mr. Johnston served from 1996 to 2006 as secretary-general for the Organization for Economic Cooperation and Development (OECD), an organization that has worked for decades to encourage governments to harmonize trade, tax, and other economic policies across international lines.

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So what kinds of "adjustments" have been forced on the societies of the United States, Canada, and Mexico since the inception of the North American Free Trade Agreement, more than a decade ago? Certainly not those promised by the political leaders in those three countries when NAFTA was in the ratification stages.

The fruits of NAFTA in the United States--massive job losses and the relocation to Mexico of entire industries, such as North Carolina's textile plants--are well known, especially among the millions of Americans who have been its victims. Less familiar, to the American public at least, are the effects of the managed-trade agreement on the citizenries of our two luckless partners in this extraordinary international scam.

North of the border, largely as a result of CUFTA and NAFTA, Canada has seen a significant decline in average per capita income, with wages failing to keep pace with rising productivity. Close to 200,000 Canadian manufacturing jobs disappeared by early 2006, a decline of 8.5 percent. Not only that, the decline in manufacturing-sector jobs has not been offset by a rise in higher-wage, higher-skill jobs in other sectors, contrary to the predictions of NAFTA proponents. Instead, writes Bruce Campbell of the Canadian Centre for Policy Alternatives in a September 2006 publication of the Economic Policy Institute, "displaced workers in the trade sectors have moved to the lower-skill, lower-wage jobs in the services sector. Precarious forms of employment (part-time, temporary, and self-employment) have also increased." Overall, says the Canadian study entitled Zip Locking North America, Canada's involvement in NAFTA has "significantly weakened the Canadian economy, has harmed the interests and the standard of living of 80 percent of Canadians relative to their position pre-free trade, and has allowed productivity to decline rather than increase relative to the United States. None of this was supposed to happen."

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The situation is even bleaker south of the Rio Grande. The effects of NAFTA have been felt most acutely in the Mexican agricultural sector, where huge numbers of Mexico's poor farmers have been put out of business, unable to compete with heavily subsidized, cheaper produce from the United States. Ironically, it is in the production of corn, a crop that originated in Mexico and remains a staple of the Mexican food supply, where NAFTA-induced economic distortions have been most severe. As cheap American corn has flooded Mexican markets, Mexico's wealthy farmers have been forced to shift to other crops to survive. …

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