We’ve all heard about how Asian countries are effectively competing in a “race to the bottom” dependent on the multitude of unskilled workers they can exploit to bolster their economic growth on the world stage. However, one may be surprised to hear that America created a similar race for Latinos in the United States and Latin America under NAFTA policies.
Here are some fast facts on the ties between NAFTA and U.S.-Mexican relations, provided by the Labor Council for Latin American Advancement and Public Citizen’s Global Trade Watch:
- Sharp cuts in farm subsidy programs combined with the near-elimination of import restrictions on corn and other commodities resulted in dumped U.S. corn flooding the Mexican market, forcing over 1.3 million campesinos or peasant farmers off their land.
- Many U.S. agribusiness multinationals used NAFTA investment and service sector rules to buy corn-processing and tortilla-making factories in Mexico. Yet instead of falling (as “free” trade theory predicts), retail prices for food products increased sharply. The cost of tortillas rose by 50 percent in Mexico City and more in the countryside, even as prices paid to Mexican farmers for corn plummeted.
- Since NAFTA, a combination of factors – including the migration of so many campesinos to the cities – has caused Mexican industrial wages to decline by approximately 10 percent.
- During the ten years of the trade agreement, the U.S. manufacturing sector has lost almost 2.5 million jobs. What has not been recognized widely is that U.S. Latino workers are some of the hardest hit by the U.S. job losses to date. In 1999, an astounding 47 percent of the total number of workers who received federal assistance under a program for workers certified as having lost jobs as a direct result of NAFTA were Latino.
This data reveals that NAFTA policies were the source of significant job losses for both Latinos and Americans. Before criticizing the Latino labor force as as a threat to American jobs, it is important to realize that American policies played a large role in altering the dynamics of the U.S. manufacturing and agricultural industries.