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[Publisher's Note]

Industrial Tourism

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NAFTA is an investment contract that protects American and Canadian goods and interests against Mexican expropriation, regulation, and pestering by local authorities.

A version of this column originally ran in Le Devoir on November 6, 2017. Translated from the French by John Cullen.

The egotism of Bill Clinton, as full of himself and as proud as ever of his great work of destruction, the North American Free Trade Agreement, has always left me speechless with wonder. But I had thought that, after the election of Donald Trump, whose victory was due in large part to a wave of anger at the relocation of factory jobs to Mexico, Clinton might demonstrate, if not shame and regret, at least a little modesty.

Not a chance. Before a packed auditorium at the Palais des Congrès in Montreal last month, alongside the equally unrepentant Jean Chrétien, Canada’s prime minister when NAFTA was signed, Clinton declared that the 1994 agreement was “the right thing to do. It left us all stronger, with more diversified economies…. I just assumed anybody that voted for a trade bill knew that there would be winners and losers and would be only too happy to help the losers and I was wrong about that. But the net effect of NAFTA was positive.”

The audacity of Clinton’s false innocence, his good-natured image, his refusal to acknowledge the reality on both sides of the Rio Grande, was breathtaking. According to a study by the Economic Policy Institute, NAFTA caused the loss of nearly 700,000 American jobs, many of them in the Rust Belt, the former industrial heartland that includes portions of the three swing states—Michigan, Pennsylvania, and Wisconsin—that in 2016 delivered the White House to Donald Trump. In that part of the country, many working-class white folks who in 2008 and 2012 had voted for Barack Obama out of hope voted for Trump in 2016 out of despair. Like his wife, Bill Clinton couldn’t care less about those people. Emboldened by having strengthened his ties to the large corporations that profited from NAFTA-guaranteed access to cheap Mexican labor, he further enriched his business-friendly portfolio in 2000 with a congressional resolution to establish permanent normal trade relations with China, a policy that devastated what was left of the well-paid American working class. Between corrupt Mexico and communist China, both of them turned into work colonies for American-style capitalism, you had—if you were the CEO of an American corporation or one of their major stockholders—reason to rejoice.

Clinton and his confreres also maintain that Mexican workers have benefited from NAFTA with salary increases, that growing “exports” have stabilized the Mexican economy, and that there has been a decline in illegal immigration into the United States. In fact, wages in Mexico remain frozen, both in the maquiladora belt along the US border (where the pay is still a dollar an hour, health and welfare benefits not included) and in the central part of the country. Despite declarations to the contrary, NAFTA has discouraged the diversification of the Mexican economy, given that there’s practically no added value in the factory assembly of parts manufactured mostly abroad and rarely in Mexico. What we have here is industrial tourism, and calling the resulting products exports is misleading.

As for the poor Mexicans supposedly delighted to be working in their own country, it’s true that the number of arrests made by the US Border Patrol is down considerably from 2006. The number of deportations, however, has grown enormously (from 1,416,704 during George W. Bush’s two terms to 1,957,784 during the eight years of the Obama Administration). Could this be because naked intimidation has discouraged desperately poor people from trying their luck in El Norte?

None of these inconvenient truths prevents the “free trade” promoters from praising NAFTA as though it were genuinely concerned with free trade. First and foremost, NAFTA is an investment contract that protects American and Canadian goods and interests against Mexican expropriation, regulation, and pestering by local authorities. Tariffs between the United States and Mexico were already quite low at the time NAFTA was negotiated, but back then American businessmen feared being shaken down by the Mexican political and business elites. The only significant free trade element in the agreement was the reduction to zero of the Mexican tariff on American corn, which resulted in hundreds of thousands of Mexican farmers being driven from their land by cheap Nebraska corn.

Alas, the thuggish Trump stupidly attacks NAFTA for the wrong reasons, accusing the Mexicans of thievery when actually they’ve been the victims of theft. At this point in time, the real thieves, the gringo owners and investors, are panicking—as well they might—in the face of the American president’s bellicose rhetoric. If Trump nullifies NAFTA, the guarantees of compensation to US businesses set out in Chapter 11 of the agreement will disappear. If, as seems more and more likely, Andrés Manuel López Obrador is elected president of Mexico next year, that tribune of the nationalist left might shake up the current situation and follow the example of Lázaro Cárdenas, who nationalized the foreign petroleum companies in 1938. “Mexico is not a colony” of America, thunders López Obrador. For now, he appears to be wrong. Rather like the people who didn’t believe in the possibility of a Trump presidency.

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