Nafta and Mexico

Mexico's economy is undergoing a stunning transformation. Seven years after the launch of the North American Free Trade Agreement, it is fast becoming an industrial power. Free trade with the U.S. and Canada is turning the country from a mere assembler of cheap, low-quality goods into a reliable exporter of sophisticated products from auto breaks to laptops computers. Although Mexico has seen economic growth lately, it still faces tremendous problems in the aftermath of the 1995 recession and the revolution that took place in the Chiapas which still wages on today. The purpose of this paper is to explore the effects that NAFTA has had on the economy and it's people during the implementation of NAFTA and in what NAFTA will bring in the future.

The North American Free Trade Agreement was designed to open borders and promote free trade between three countries: Canada, the United States and Mexico. Signed in 1992, ratified by the U.S. Congress in November 1993 and implemented January 1, 1994, NAFTA reduced some tariffs immediately while others are scheduled to fall to zero over a 15-year period. NAFTA follows the prescription of liberalization- including the deregulation of government restrictions to allow increased trade, direct foreign investment, and foreign ownership of businesses.

On January 1, 1994, a Mexico still sleepy from New Year's celebrations awoke to discover a passionate new revolution sweeping across the state of Chiapas. The Zapatistas, a small, yet powerfully forceful group of indigenous people, exhausted from centuries of oppression, poverty and corruption, rose up to end this societal injustice, and most specifically, to battle the new tyrant that would be born that very day: The North American Free Trade Agreement. This revolt was viewed by the indigenous population of Chiapas as an essential act to stop the debilitating cycle of injustice and to prevent future harm to the Mexican people by opposing NAFTA. "The Zapatistas have pulled back the curtain that covered up the other Mexico. It is not the Mexico of eager entrepreneurs lined up to open Pizza Hut franchises or consumers eager to shop at Wal-Mart, but rather the Mexico of malnourished children, illiteracy, landlessness, poor roads, lack of health clinics, and life as a permanent struggle." (Quoted in Russell, p. 1)

NAFTA was essentially the last straw for the indigenous people of Chiapas, and their revolt was inspired by five centuries of oppression and injustice. What they were asking for, effectively, was nothing more than the basic necessities of life - both materialistic and abstract - so that their people could live without shame, fear, and humiliation. One of their principal grievances was the status of the indigenous populations who, in spite of making up 30% of the state's population, continue to be treated as sub-humans and is constantly victims of discrimination and state repression. Accompanying these factors were some of Mexico's most abhorrent social standards. In percentages of illiteracy, lack of educational facilities, overcrowding, miserably low wages and lack of electricity, running water and sewage, the state of Chiapas ranks almost exclusively at the top of the list. Other concerns included horrifying human rights violations. In June of 1993 Amnesty International reported that in that year alone, over 1,000 members of the state security forces raided the villages of Chalan del Carmen, Rio Florido, Nuevo Sacrificio, Eden del Carmen, and El Carrizal, and proceeded to threaten, injure, torture, rape, arrest, and murder their fellow citizens (Quoted in Russell p. 12). Furthermore the Zapatistas, were concerned with the outright lack of education, health care, and lack of employment opportunities, without which the cycle of poverty has no end. Finally, a major concern involved their ejidos, or communal lands, which, since the revolution have been the main source of their livelihood. These lands not only provide the nourishment they need to survive, but also symbolically tie them to their cultural history, their ancestors and their traditions that are the backbone of their society. When President Salinas amended Article 27 of the Mexican constitution, permitting the sale of ejido lands, the security of these plots fell victim to wealthy landowners and corrupt state officials. Such losses caused massive rural-urban migrations, putting even more stress on overpopulated cities.

It was feared that these already debilitating problems would be worsened by the implementation of the North American Free Trade Agreement. Most of the Zapatistas' concerns centered around the importance of their communal lands as the center of their livelihood and connection to ancestral heritage. They knew the treaty would affect them personally, as President Salinas' decision to allow the sale of ejidos was a direct result of an ultimatum given by George Bush, implying that either the government clear these lands for use by multinational corporations, or the treaty would be broken. Furthermore rural farmers feared that cheap agricultural goods flowing into Mexico would undermine their limited livelihood as farmers, thus forcing them to abandon their land and people to find new lives in the cities.

Tumultuous times in Mexico seemed to ride in on the coattails of NAFTA's implementation. The country began 1994, and election year, with a violent rebellion in Chiapas, economic uncertainty and a political assassination. On March 23, 1994, presidential candidate Luis Donaldo Colosio was shot and killed while campaigning in Tijuana. Colosio had been chosen to succeed President Carlos Salinas de Gortari for the Institutional Revolutionary Party (PRI), Mexico's ruling party. There were investigations into the assassination, but whether or not it was part of a broader conspiracy has never been resolved.

Salinas chose Ernesto Zedillo Ponce de Leon to substitute for Colosio and he ultimately won the election in August with 50% of the vote. There have been charges that the PRI had employed fraud to control the election, but the election of 1994 was distinctive both because it was largely considered to be free from fraud, and because there was considerable uncertainty about the outcome. Though election fraud may have faded, since Zedillo's election, more members of the Party of the Democratic Revolution (PRD), the opposition party, have been assassinated than in the previous six years of Salinas administration (Marinez).

Zedillo's first three weeks in office were economically and politically volatile. After the rebellion in Chiapas, investors began to pull billions of dollars out of Mexico. The peso crashed, losing more than half its value in a matter of months.

In December of 1994 the Zedillo government was forced to devalue the peso by 50%, which ultimately

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