NAFTA - Can NAFTA develop a different way or will it be doomed to exploit cheap labour?

NAFTA - Can NAFTA develop a different way or will it be doomed to exploit cheap labour?
June 27, 2008

The North Atlantic Free Trade Association (NAFTA) was founded by three nations but these nations differed greatly and inequality was a stark reality from the start. However, unlike the European Union (EU) which is based on equality and human rights, NAFTA was always focused on economics and it was outside the political and social scope. Therefore, is NAFTA based on exploiting cheap labour from Mexico or can it evolve in the near future in line with the EU?

For many Americans NAFTA is a nightmare because it means cheap labour and lost jobs. At the same time mass Hispanic immigration to America is also taking jobs and it appears that Americans are losing out both ways. Of course many American companies are also abusing both American labour and Mexican labour, and this is the problem, it does not feel like a bloc based on equality or an organization which desires to upgrade the region.

Obviously for Canada the situation is more different because America is a buffer zone and this prevents massive Hispanic immigration. Therefore, Canadian companies gain from both high tech investments via America or from American investments in Canada, and from cheaper markets in Mexico which enables Canada to maintain her high level economy.

While for Mexico this trading bloc did enable major investments to move more freely within her economic system. Also, NAFTA was needed in order to transform many moribund sectors and to provide much needed employment. Investments also increased and many companies from America and Canada gained from her abundant cheap labour and lower rental rates. These lower costs were attractive and it is clear that if it was not for NAFTA, then these investments may have gone to another nation. Therefore, the benefits of NAFTA is clear for Mexico and despite some negatives, it is positive overall.

Yet what about workers in America? Well for them it is double-edged because many Americans have lost their jobs or wages remain static or employment rights have been cut. However, for some American companies NAFTA meant they could expand in both America and Mexico respectively because cheaper labour costs and no-pension provisions, meant that profits could be re-invested within America. Given this, you did have some positives but for many Americans it meant losing your job or having your rights taken from you or having to work for lower wages
because of competition in Mexico and massive immigration which reduced costs within America.

Given all the current factors then it is clear that NAFTA does not desire to be based on social equality. Instead NAFTA will over rely on cheap labour and immigrants in order to reduce costs. At the same time tensions will deepen because of lack of trust and a growing number of Americans will become alienated by the reality of NAFTA. It would appear that this bloc will just chug along and it will stay in the shadows of the EU.

Lee Jay Walker Dip BA MA

http://journals.aol.com/leejaywalker/uk/