Over the years, I’ve seen many Mexicos.
In the 1980s, I lived and worked in Mexico and saw an economy highly regulated and industries totally protected from foreign competition. For example, foreigners leaving Mexico found no problem selling all of their electronic appliances at garage sales. On Saturday mornings, Mexican middle-class couples would drive around looking for that American TV or stereo that they couldn’t buy at a local shop. I specifically recall selling my 7-year old stereo unit for about the same price that I paid for in the U.S. Mexicans wanted foreign appliances, from radios to washing machines and specially refrigerators. And they paid cash for everything!
In the 1990s, Mexico agreed to NAFTA and now everything is available down there. Garage sales are no longer a big deal because they can buy everything at Walmart or wherever.
Since the 1990s, I’ve seen that NAFTA is a big political problem south of the border too, as reported by Ioan Grillo:
Nafta politics are as complex south of the border as they are in the north. Its advocates see it as a cornerstone of Mexico’s opening to the world; its detractors, as a neoliberal tool of imperialist gringos.
Some credit it — or blame it — for most of what has happened here over the last two decades, from the country’s moving to a multiparty democracy, to millions trekking to El Norte, to violent drug gangs ravaging border towns.
With the United States economy 10 times the size of Mexico’s, the effects of Nafta are far greater on this side of the river. It has physically reshaped Mexico’s landscape, from its growing industrial cities to its emptying farming villages. It rocket-boosted trade between the countries, from $104 billion in 1994 to $583 billion last year, representing everything from sparkplugs to airplanes to Christmas trees.
Thanks to Nafta, Mexico has become the biggest carmaker in Latin America, overtaking Brazil in 2014.
But despite these gains, the Mexican economy is sluggish compared with that of developing countries such as India and China.
It has grown by an average of 2.5 percent a year since Nafta, a similar level to the decade before it, and below that of the boom years of the 1960s.
NAFTA’s biggest challenge is that it was not sold properly down in Mexico. Back in 1994, NAFTA, or “el tratado” as many Mexicans call it, was presented as a way of putting Mexico on a path out of the Third World. It was hoped that Mexico could become like the U.S. and Canada.
Unfortunately, NAFTA did nothing to reform the oil monopoly PEMEX, the agricultural sector, or to make the country more like Chile, the model economy of Latin America. NAFTA, without legal or labor reforms, won’t fix it all.
NAFTA wiped out local retailers and replaced them with large foreign stores. It also opened up Mexico’s domestic markets to all kinds of international competition, from Chinese TVs to everything else that we see up here.
NAFTA helped Mexicans, especially professionals involved with some foreign company or Mexican exporters. It did nothing help the millions of Mexicans who live in the countryside, the place that most of the illegal immigrants come from.
My guess is that the next president of the U.S. will find that Mexico is a lot more open to renegotiate the agreement. Will it happen? I don’t know, but NAFTA is not popular south of the border.
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