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Have you ever thought about making money? I have a friend who, when she was 7, wanted to start a lemonade stand. Her mom wanted to teach her the value of a dollar and told her that to sell lemonade she would have to buy the lemons and pay for the sugar. Well, soon my friend figured out that if she sold water and the wild onions from her yard instead, she wouldn't have to pay her mom for the supplies. This way, any money she made from her sales was strictly profit. That's pretty good business sense even for a 7 year-old. Determining where you'll get your goods and services, how you'll pay for labor, and to whom you'll sell your product may be simple when you're just talking about a lemonade stand. But nowadays, American companies cross borders, sail over seas and mix in politics to help create what is now called "a global economy." There are many ways in which countries do business with one another. Using taxes on imported goods and services (called tariffs), governments and large corporations impact their economies, employ their citizens and establish partnerships with other countries. In 1994, the Unites States, Mexico and Canada enacted the North American Free Trade Agreement (NAFTA), one such "partnership" that opened up trade between these three countries. With NAFTA, the tariffs (and other trade barriers) have gradually been taken away since 1994 with a goal of no tariffs by 2008. It sounds simple, but the effects on employment, culture, the environment and the future of the global economy are vast. And whether you believe in NAFTA or are opposed to it, the idea of free trade seems like it is here to stay. Trade relations in North America were happening long before NAFTA. In the 1970s, Mexico opened up its trade with the United States, which made it easier for foreign investors to come into the country and use workers, who cost less than those in the U.S. Foreign businessmen also took advantage of the environmental laws of Mexico, that are less strict than those in America. These advantages enable the global economy to take shape. By taking its factory to Mexico, an American company pays lower wages because the minimum wage in Mexico is lower than in the U.S. They can then offer lower prices to us, the consumers. Because Americans want the best quality products for the cheapest prices, we benefit from the cheaper labor of these set-ups. But all is not as good as it may sound with this scenario. Both Mexico and the U.S. felt some negative effects of these early free trade agreements. Workers in the U.S. lost their jobs as factories began moving south. Big American corporations were buying out the businesses that were once Mexican-owned because they could no longer compete. Mexican workers were forced to move north to the border where they could find work. As a result, many Mexican citizens have grown poorer and poorer (having to accept lower wages), while American corporations continue to grow richer and more powerful. NAFTA seems to be encouraging these trends. This has been especially true for the companies that make clothes. Businesses like Sun Apparel (who makes the Polo brand) headed to Mexico and shut down factories in El Paso, Texas. Not only does such an action mean that many Americans lose their jobs, but working conditions sometimes also get worse. The companies that have gone to Mexico do not always have policies that require humane factory environments or fair wages. According to an expert on these work sites, most do have safety equipment for their workers and, while the pay rate is lower than here in America, most meet the wage standards set by the Mexican government. But the fact still remains that there are many companies who do not abide by the regulations. As a result, workers suffer while the leaders of these big companies get rich. As I stand atop the scenic road in El Paso, the smog lies heavy over the city and across the border into Juarez, Mexico. By taking U.S. jobs to another country, big corporations can take advantage of not only the cheap labor, but also of the environment. While NAFTA contains "side agreements" that are supposed to provide environmental standards, they rarely get placed in effect. Since NAFTA, many U.S. wood companies have entered Mexico for logging. In the Mexican state of Guerrero, 40% (a little under half) of the forests have been clear-cut in the last decade. It seems that profit is valued above everything else.
Family and Friends around the country
It's up to us to keep an eye on the impacts of NAFTA. While free trade may be good in principle, shouldn't we uphold our respect for the planet and for humankind before all else?
Jennifer
Please email me at:
Jennifer1@ustrek.org
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