International Relations

NAFTA Turns Twenty

The ancient historian Tacitus famously said, “Laws were most numerous when the commonwealth was most corrupt.” In looking over the enormity of the actual document that is NAFTA, one wonders what the honorable Tacitus would have said upon discovering that “Petroleum gases and other gaseous hydrocarbons other than: ethylene, propylene, butylene and butadiene, in purities over 50 percent” fell under Annex 603.6 of Chapter Six (Energy and Basic Petrochemicals) in Part Two (Trade In Goods). Annex 603.6 lists exceptions to Article 603, and states that “For only those goods listed below, Mexico may restrict the granting of import and export licenses for the sole purpose of reserving foreign trade in these goods to itself.” Unless my legalese is not as sharp as I would like to think, this means that NAFTA is a guest sign-in book for America, Canada, and Mexico’s greatest lobbyists.

For all the talk that NAFTA would be good for everyone and everything involved (Mexican peasants, American workers, the environment, etc.), it was immediately obvious to anyone paying attention that this was not the case. By January 1995 Republican NAFTA cheerleaders Newt Gingrich and Bob Dole were trying to get the U.S. Treasury to issue 40 billion dollars worth of loans to the Mexican government in order to save American corporate investments from the plummeting peso. In building up to its passage, the late libertarian polymath Murray Rothbard wondered why NAFTA was receiving so much attention in libertarian circles, as opposed to equally worthy libertarian causes like ending the Federal Reserve or decriminalizing marijuana. After some investigating, he sarcastically commented that the obsession was likely connected to the Koch Brothers purchasing over a billion dollars worth of gas pipelines in Mexico in 1992. For those of you who think this sounds conspiratorial, consider that all of Mexico’s oil refineries are state-owned, and that Mexico now refines less crude oil than it did in 1994. NAFTA’s incidences of corruption and broken promises are many, but out of all the examples, what could be called the “Subsidized-Crop-Immigration Cycle” is far and away the most illustrative.

The trouble begins, like so many things, with a program that FDR created during the Great Depression. Fearing a collapse of American agriculture, in 1933 the “Agricultural Adjustment Act” was passed which established the “Agricultural Adjustment Administration” which began dispersing large subsidies (also known as taxpayer money) to farmers across the country. The string attached to the money was that farmers had to not grow as many crops as they had been, the idea being that this would create a shortage of crops, causing their prices to go up, allowing farmers to make more profit. Say what you will of the policy’s success at the time, most everyone should be suspect of the fact that a mutated form of this bill is still with us – long after the Dust Bowl’s end, and when American farmers constitute less than 1% of the workforce, not 25%, as was the case in the 1930s.

Estimates vary, but in the last decade American taxpayers have given around 168 billion dollars over to farm subsidies, with another 195 billion estimated for the next decade. Where the money ends up is also an issue, and also not known precisely. The latter of the two sources cited above claims that about one third of subsidies go to the top 4% of farm operators. The former claims 75% go to the top 10%. Either way (or hypothetically, both), America’s largest food producers receive an incredible amount of free money.

To what end is all of this extra money used? Thanks to NAFTA, said money is used to flood Mexican markets with artificially low prices on all different kinds of food. Ten years ago Allan Wall reported that the Mexican pork industry had lost about 30% of its revenues since NAFTA because of importations, and numbers released since then show things only getting worse. Between 1997 and 2005, Mexican prices for corn, pork, poultry, beef, rice, cotton, wheat, and soybeans all fell from 44% to 67%. Unsurprisingly, 2.3 million Mexicans left the field of agriculture during this period.

What happens to these unemployed Mexican farmers? Well, during the same time the above economic study was conducted, the population of illegal immigrants in the US roughly doubled. It is a sad irony that the very same businesses that use corporate welfare to bankrupt farmers in Mexico later hire them here in the US – where one in four farmworkers is an illegal immigrant. With this influx of unemployed Mexicans comes the crime, economic displacement, and cultural change reported on almost every day at Vdare and American Renaissance.

It is worth remembering too, that along with America’s working class, Mexicans are not the real beneficiaries of this cycle either. Since 1994, Mexico’s annual GDP growth has been schizophrenic, one year it will shrink by 6% and the next it will grow by 5%, while in ‘60s and ‘70s, it was steadily growing. Additionally, the supposed benefits of NAFTA have done nothing to help Mexico surpass China as Canada or America’s second largest trading partner. One would also be hard pressed to find a Mexican who would rather pick beans at abysmal wages in the US than run a family farm in his homeland. The small matter of the Zapatistas who declared NAFTA to be death is worth mentioning as well.

The beneficiaries have been given many names – Samuel Huntington called them “Davos Men,” James Burnham called them “Managerial Elites,” and Sam Francis often referred to them more broadly as “cultural and social elites.” Regardless of the name, it is those who prioritize profits and pretension to goodness over any and all cultural, racial, or national loyalties. Understanding the presence of these elites, and what their interests are, is an essential part to navigating and surviving the American political landscape. Though I would recommend reading more on the matter, it should be understood that these elites have taken over the Republican Party: after all, only 10 of the 44 Republican senators who could vote against NAFTA did so; Republican congressmen displayed only marginally more economic nationalism – 43 out of 175.

NAFTA is another nail in the coffin of the white working class and another reminder to look above and beyond the “Generic American Party.” Not long after NAFTA kicked in, Newt Gingrich and company swept the legislative branch and once George W. Bush was elected, passed bill after bill of free-trade agreements. This November, remember NAFTA, and let the Republicans self destruct.