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US think tank admits NAFTA failed Mexico

Weekly News Update on the Americas | 13 December 2009

US Think Tank Admits NAFTA Failed Mexico

On Dec. 9 the Carnegie Endowment for International Peace, an influential Washington, DC-based think tank, released “Rethinking Trade Policy for Development: Lessons From Mexico Under NAFTA,” a study on the effects of the North American Free Trade Agreement and related neoliberal economic policies on Mexico’s economy.

The study found that in the period since the agreement went into effect in 1994, Mexico’s annual per capital growth rate has been slow (1.6% in 1992-2007, compared to 3.5% in 1960-1979) and job growth has been weak, with net losses in agriculture and manufacturing (except for the export-oriented maquiladora sector). Contrary to the projections of neoliberal economists, NAFTA did not increase investment—foreign investment increases were more than offset by decreases in domestic investment. And less restricted trade with the US has made Mexico “excessively dependent on the United States as an export market, with more than 85% of Mexican exports going to the United States, up from 70% in 1990… For this reason, the current recession is hitting Mexico harder than any other country in Latin America.”

The study’s findings are not new—a joint statement by Canadian, Mexican and US labor federations made many of the same points in August [see Update #1001]. What is new is the fact that a prestigious US think tank discussed these issues, specifically challenging what the report notes is a widespread assumption in the US “that Mexico was the undeniable winner from NAFTA.” (Carnegie Endowment 12/7/09; New York Times blog 12/10/09)

 source: Nicaragua Solidarity Network of Greater New York