Poor Mexico. So far from God and so close to the United States.
Written by Celso P. Santos exclusivey for SouthFront; Edited by Viktor Stoilov
As an extension of NAFTA, the Trans-Pacific Partnership (TPP) is an ambitious attempt to promote a free trade area that will cover several countries in the Pacific region, including both Asia and the Americas. This association, if realized, will become the world’s largest multilateral agreement and will impact the economy not only of its member countries, but the course of the world trading.
The TPP was signed in the second half of 2015 in Atlanta, by the United States, Mexico, Peru, Chile, Canada, Japan, Malaysia, Singapore, Vietnam, Brunei, Australia and New Zealand. The TPP, which must still be ratified in legislatures of 12 countries’ signatory to come into effect, it is a key part of Obama’s foreign policy, which seeks to prioritize the relationship with the Asia-Pacific region to counter the Chinease influence.
Proponents of the TPP, including the large conglomerates argue that the agreement will open new markets for the Mexican products and that will be in favor of the country. Their critics, however, claim that the TPP will generate an unemployment in Mexico for the benefit of more competitive or countries with lower salaries.
In the 1990s, when NAFTA (North American Free Trade Agreement) was introduced, as is currently done with the TPP, it was said that it was an innovative and beneficial proposal for Mexico. The main objective of NAFTA was to leverage a set of economic policies, some of which made their way from the previous decade, as manufacturing liberalization, foreign investment, property, the monopoly of oil exploration breaks, etc. The idea was that the continuation and expansion of these policies would allow Mexico to reache an economic progress that wasn´t possible under the aegis of the protectionist nationalism, economic model that prevailed in the decades before 1980.
However, 20 years later, the Mexican GDP has grown only 2.1% per year, which is half of the other Latin American countries in that period. Additionally, the decrease rate of poverty in Latin America was about 50%, while in Mexico it was less than 25%. The minimum wage adjusted for inflation, from 1994 to 2012, has decreased by 26.3%.
In the field, there was a 19% drop in agricultural employment, or approximately 2 million jobs. The loss was concentrated on the work done by families employed in the family farm sector. Temporary work (less than 6 months) increased by around 3 million jobs, but that wasn´t enough to offset the loss of 4.9 million jobs in the family farming sector.
Another fact is that between 1994 and 2000, the annual number of Mexican migrants heading to the United States grew with 79%. Another harmful consequence for the country in these 20 years of NAFTA is the lost food self-sufficiency. The United Nations Food and Agriculture Organization (FAO) considers that a country has food vulnerability when 25% of the food come from abroad, and Mexico currently imports 60% of its food.
The results are therefore two decades of economic failure in almost every social and economic sector.
The TPP is good … for the Americans!
In face of resistance, the Obama administration came out in defense of the TPP, to ensure that it will be responsible for the elimination of customs and tax barriers that other countries currently levied on the US exports and strengthen the brand “Made in the USA”.
The US Trade Representative, Michael Froman, who led the delegation of his country in the negotiations, said that, “farmers and businesses will gain” by eliminating 18,000 taxes on exports in the form of tariffs. “In a world where more than 95% of the consumers live outside our borders, the disadvantages that currently affect our workers and businesses are unacceptable. The TPP solves this injustice,” said the trade representative.
For Mexico to be officially part of the TPP, it´s necessary to have the Senate approval of the treaty and include it as part of the legislation. This is an issue of paramount importance, since the TPP contains rules that hurt the rights to health, education, freedom of expression and access to information. Among other things, the TPP hardens the system of pharmaceutical patents, putting obstacles to the production of generic drugs and allow multinational companies to sue member states for any conduct or legislation that they regard as contrary to the treaty.
In the agriculture, for instance, this treaty could be the mercy blow to thousands of small Mexican producers of milk, coffee, meat, etc. They will have to compete against the competitive producers from more developed countries.
While some of the policies have been undoubtedly necessary or positive, the final results have been decades of economic failure in almost any economic or social sector. This is true if we compare Mexico with its promising past, or even if we compare it with the rest of Latin America (since NAFTA). Continuing this logic, this new treaty, TPP, will reaffirm the neocolonial condition of deep dependence of Mexico from the world’s largest economy – the United States. After 24 years of NAFTA, the results should lead to a broad discussion among all sectors of the Mexican society about what went wrong.