Sunday, May 24, 2015

The Cost of Free Trade: Beware of the Trans-Pacific Partnership

Guest blogger: Minh Le, second-year law student, University of San Francisco

The North American Free Trade Agreement (NAFTA) was initially signed by the U.S., Mexico, and Canada under the belief that it will lead to economic growth and prosperity between their borders. In actuality, it is not the countries or their people who are benefiting from these types of agreements, but rather it is the multinational corporations doing business abroad who are reaping the profits of free trade. Corporations are the lobbying forces pushing these agreements through. Their duties lie with the shareholders, and not in the welfare of their workers or the country. A money-driven agreement does nothing good for the welfare of the country, as the shareholder’s interest is put on top priority over everyone else’s.

The real cost of Free Trade is its impacts on the number of displaced Mexican agricultural workers and increased numbers of undocumented immigrants entering the U.S. NAFTA, which went into effect in 1994, removed trade barriers on U.S., Mexico, and Canada’s imported and exported goods and services such as agriculture, allowing for a free flow of commodities. The trade policy never took into account the flow of labor that quickly followed.  

Under NAFTA, the U.S. has been permitted to subsidize its corn and other agricultural businesses. When heavily-subsidized, the small Mexican farmers are not able to compete against these U.S. industries. And as U.S. corn and other agricultural products continue to lower in prices and imports into Mexico, the small Mexican farmers are driven out of the business and off their land. Because of this, millions of Mexican agricultural workers are displaced toward urban centers where they remain living in desperate poverty. These are among those who seek economic relief across the border, while others remain in the country where wages and working conditions have dropped significantly, especially for those working in maquiladora sweatshops.

The number of displaced farm workers grossly outweighs the number of new jobs that were actually created due to free trade. For the many unfortunate farmer workers who were not able to find jobs in different sectors, they have followed the agricultural workflow into the U.S. These workers now make up the bulk of undocumented immigrants entering the U.S. each year. Since the signing of NAFTA, the number of undocumented Mexican immigrants in the U.S. was estimated to have increased to 12 million today from 3.9 million in 1993.

NAFTA had failed to do what it had promised to do. Instead of curbing undocumented migration abroad, it aggravated the problem. NAFTA was not the exception, but the norm. Trade agreements like these were never designed to be the development programs they sell themselves as. CAFTA, the Central American Free Trade Agreement tells a similar story. Under CAFTA, the U.S. imports its subsidized agricultural products to El Salvador, Guatemala, and Honduras, precipitating the decline of local farming businesses in those countries and spurring mass displacement of farm workers all over. The promises of eliminating immigration pressures from Central America by creating jobs and raising wages were all a farce; thwarted by one-sided economic policies backed by big corporations.

The U.S. is currently under negotiation with 11 other countries to create a new trade agreement called the Trans-Pacific Partnership (TPP). The treaty is trying to promote free trade between all 12 countries bordering the Pacific, covering topics such as intellectual property, investments, services, Internet access, pharmaceuticals, agriculture, and even immigration. The TPP seeks to expand the NAFTA trade pact model that already has spurred massive U.S. trade deficits, job loss, severely lowered wages, inequalities in the levels of agricultural imports, while providing extra protection for corporations. What’s alarming about this new trade agreement is that most of the negotiations are being made in secret, and kept away from the public’s view, while over 600 lobbyists are pushing to “fast-track” the bill. Just this past week, the U.S. Senate already voted in a 62-37 vote in favor of the TPP. The bill is now headed to the House of Representatives for a final vote next month.

From an immigration perspective, the concern is that the massive partnership would continue to move jobs away from Mexico and Central America to lower-wage countries in Asia like Vietnam and Malaysia, displacing millions more farm and agricultural workers to the North.

As such, in making their decision, Congress and the public should be reminded of the failures of such trade agreements in the past, and their devastating effects on lower developed countries and the unintended consequences on migration. Critics of the Trans-Pacific Partnership have labeled it “NAFTA on steroids.” Indeed, anything clearly resembling a failed trade agreement warrants closer scrutiny by the public, especially when the agreement is backed by 600 lobbyists, including hundreds of multinational corporations.

The fear is that passing a massive trade agreement that espouses the same false promises of NAFTA will further exacerbate the level of undocumented immigrants entering the U.S. This would undercut any progress that the U.S. has made toward achieving anything close to a comprehensive immigration reform.


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