Presentation on theme: "NAFTA’s Shadow. Mexican president Carlos Salinas de Gortari, United States president George Bush, and Canadian prime minister Brian Mulroney, left to."— Presentation transcript:
Mexican president Carlos Salinas de Gortari, United States president George Bush, and Canadian prime minister Brian Mulroney, left to right, look on as their trade ministers initial the North American Free Trade Agreement (NAFTA) in San Antonio, Texas, in 1992. Passage of the treaty in 1993 counted as one of the Mulroney government’s most significant achievements.
The North American Free Trade Agreement (NAFTA) The North American Free Trade Agreement (NAFTA) An agreement signed by Canada, USA and Mexico to: -eliminate barriers to trade through three countries -eliminate barriers to investment and flows of money -provide new protections for global corporations against privacy of CD’s, videos, and other “intellectual property”
NAFTA Provisions NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about 14 years. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks) and outlined the removal of restrictions on investment among the three countries. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
Controversy Who favors NAFTA? Why? “Transnational Corporations” have tended to support NAFTA in the belief that lower tariffs would increase their profits.
Controversy Who opposes NAFTA? Why? Labor unions in Canada and the United States have opposed NAFTA for fear that jobs would move out of the country due to lower wage costs in Mexico.
Top U.S. 1. Aircraft 2. Electronic Computing Equipment 3. Motor Vehicle Parts 4. Motor Vehicles 5. Semiconductors 6. Aircraft/Space/Missile Parts 7. Chemicals 8. Plastics 9. Airplane Engines/Parts 10. Refined Petroleum Products 1. Motor Vehicles 2. Oil/Natural Gas 3. Motor Vehicle Parts 4. Semiconductors 5. Electronic Parts and
NAFTA Pros +Goods/Services at lower cost +Most underdeveloped countries gain the most (i.e. standards of trade increased) +Tariffs reduced +Jobs created +Mexico’s economy is growing again
NAFTA Cons –Fuel for peso crisis –Benefits Mexico more than the U.S. –U.S. deficit with trading partners –Loss of low-wage American jobs to Mexico –Environmental problems –Traffic congestion and delays along the borders
Problems With NAFTA: -Labor Laws -Environmental Laws -Currency Erosion -Cost of Consumer Goods -Loss of Jobs in the USA
Before NAFTA 20 years ago had one of the highest standards of living Now little infrastructure (housing, school, public services, clean water)
“They don’t treat us like workers, they treat us like slaves” - Cielo
Who is Working: -Majority displaced workers from the south -Majority of workers 16- 25 yrs old -66% female workers -Subject to sexual harassment and rape -Fired when worker becomes pregnant
Labor Laws: Minimum Wage -Average worker makes 300- 500 pesos a week (30-50 American dollars) -In the US a worker makes 18.96/hr -In Mexico 1.54/hr -Hiring workers for 2-3 months -No overtime -No enforcement of minimum wage -Groceries cost less in Texas
Labor Laws: Working Conditions -Safety mechanisms in factories turned off -No protection from toxic chemicals (effects include cancer, asthma, sterilization) -No compensation for accidents in factory -No health insurance -Few bathroom breaks -Workers must pay for water
The Environment: Land Ownership -After revolution land ownership put in Mexican Constitution (#27 Ejido clause) -Land given to farmers by government---cannot be sold -USA requires Mexican Gov. to remove #27 for NAFTA -Food imported from USA -30 million farmers sell land to companies -Companies pay few taxes on the land
The Environment: Pollution -Chemicals dumped in rivers -Solvents, heavy metals, and toxic waste in water and soil -Flora (calcium sulfate) used to pave roads -Flora falls on cattle grain -HFC + Fluoride = Asbestos -HFC housed in dangerous conditions (68 ° F becomes airborne) -Massive deforestation
The Environment: Effects On Human Life -Flora causes cancer, asthma, birth defects, sterilization, and anencephaly (1,000 above average) -Land devalued -No sewage system -Number one killer of children on the border is gastrointestinal diseases -On the USA side of the border Hepatitis A is 3 times the national average
NAFTA: The Mexican Gov. and the US Gov. -Massively indebt to US Gov. and world bank -25 cents to every dollars of foreign investment -Pressure put on Mexican government - “Structural Adjustment Programs” destroyed -No money for hospitals, waste treatment, schools, water purification, ect.
-Lowering the value of the peso (part of “structural adjustment”) -Purchasing power has fallen 65% in Matamoras -Loss of jobs in the United States (800,000 American workers lost jobs because of NAFTA) --Companies are leaving -Race to the bottom