NAFTA 10 YEARS LATER
U.S. Reaps Bittersweet Fruit of Merger
Many Americans lost their jobs as industries moved south to Mexico. Others capitalized, setting up businesses along border areas.
By Evelyn Iritani
Times Staff Writer
January 19, 2004
After Green Giant closed its vegetable processing plant here and moved her job to Mexico in the early 1990s, Yolanda Navarro turned her experience into a crusade against globalization. She crisscrossed the country with a plea: Don't support the North American Free Trade Agreement, or thousands more jobs will be lost.
A decade after Congress narrowly approved the agreement opening the borders between Mexico, the United States and Canada, the 47-year-old Mexican immigrant has seen her fears realized. Four more of this farm community's food processing plants have closed, eliminating nearly 2,000 jobs.
"There are a lot of things wrong with our economy, but one of the big things is NAFTA," said Navarro, a naturalized U.S. citizen who worked at the Green Giant plant with her husband, Lauro, for more than 20 years.
Nearly 400 miles south at the California border, Stephen Gross has a different view of NAFTA. The trade pact enabled him to build a thriving business ferrying goods between Mexican border factories, or maquiladoras, and stores and plants in the United States. His 150-employee company, Border Trade Services, handled about $600 million worth of auto parts, electronic components and other cargo last year.
"There are estimates that 10,000 to 15,000 people work in the maquiladoras, but live in San Diego," Gross said. "All those people are contributing to the San Diego economy one way or another."
The experiences of these two cities show that NAFTA's impact on the U.S. economy has varied dramatically from place to place and industry to industry. Consumers enjoy lower prices for many goods. Border regions have seen a boom in transportation and trade-related jobs. But others have suffered as NAFTA made it easier for U.S. automakers, food processors and apparel makers to shift low-margin, labor-intensive work to Mexico.
Posted by P6 at January 19, 2004 11:16 AM
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Comments
The truth of the matter is this. Either we liberalize our trade with nations like Mexico, or those nations, burdened by corrupt political systems, will continue to grow poorer and poorer until a breaking point is reached. While NAFTA has the short-term effect of sending jobs to Mexico, it has the long-term benefit of improving the standard of living down there. At some point, wages in Mexico will rise to the level they are in the US, and bring with it, as growing wealth always does, political reforms that will improve civil rights and freedoms.
Ending Nafta will condemn Mexicans to the same grinding poverty and lack of opportunity they have faced for nearly a century of rule by the PRI.
Posted by Brian at January 21, 2004 12:30 PMRaising Mexico's wages and living standards isn't the problem. The problem is when the labor market clears somewhere between current Mexican and US labor rates, that clearing point will be significantly below the current point; as significantly below as it will be significantly above the current point in Mexico.
Posted by P6 at January 21, 2004 01:25 PMThat's true. But it is a necessary tradeoff. It will either be that, or Mexican workers will remain at third-world living standards. I personally don't like the idea of American living standards being mainained by the impoverishment of another nation.
Until Mexican workers' living standards are at parity with the US, there will be a net flow of the lowest-skill jobs to Mexico. But during that time, new jobs will be created in the US that demand skills that only US workers have.
Posted by Brian at January 21, 2004 01:35 PM