From: "Walter Lippmann" <[EMAIL PROTECTED]> Reply-To: [EMAIL PROTECTED] Date: Tue, 24 Apr 2001 17:04:56 -0700 To: "CubaNews" <[EMAIL PROTECTED]> Subject: [CubaNews] Mexico, FTAA and Latin America's future GRANMA April 24, 2001 Mexico reflects what FTAA represents for Latin America BY JOAQUIN ORAMAS IN his in-depth analysis of what the Free Trade Area of the Americas (FTAA) could represent for Latin America, economist Osvaldo Mart�nez, director of the Center for Research on World Economy, with headquarters in Havana, used the example of Mexico to show how the North American Free Trade Agreement (NAFTA) with the United States and Canada has done more harm than good. Since 1994m, Mexico has been linked to those two countries through NAFTA, which is basically the FTAA on a smaller scale, given that it is built on the same neoliberal philosophy and at the same time is an attempt at integration among two developed economies and one underdeveloped one. So what has happened in Mexico during its almost seven years under NAFTA? Mart�nez gave some clear answers to this question, revealing the consequences of the agreement, starting with the fact that NAFTA has represented a decline in the base of Mexico�s national economy and a resulting deterioration in social development. He used a comparison to demonstrate this point. In the �70s, without NAFTA and without neoliberalism, the Mexican economy grew an average 6.6% per year, while in the � 90s, with NAFTA and neoliberalism, it grew only 3.1% per year. If we look at this growth in individual terms, in the �70s the production per capita grew an average of 3.4% per year, in the �90s it grew only 1.3%. He commented that the marvelous future predicted with the advent of NAFTA has turned out to be the complete opposite. He spoke of the impact that the agreement has had on the working population, saying that 50% of this sector consists of informal labor, without proper conditions, with low salaries, with no right to a trade union, retirement or holidays, let alone sick days. There are 20 million workers in precarious labor conditions, he stated. Mart�nez added that his information came from both Mexican and international sources. Expanding on what he ironically referred to as the "marvels" of capitalist investment, he recognized that $36.368 billion USD entered the country for that purpose between 1998 and 2000. However in this same period the current accounts deficit, or rather what was taken out of Mexico by this foreign capital, particularly by U.S. parent companies, equaled $48.699 billion USD. Such is the "miracle" of foreign investment, he announced. In 2000 Mexico�s external debt totaled $163.2 billion USD, more than double the figure for 1982, the year when the Mexican economy set off the Latin American external debt crisis. The director of the Center for Research on World Economy believes that NAFTA has created growing economic dependence for Mexico and a focus on relations with the United States, since before the agreement Mexico�s relations were spread more diversely throughout the world. He added that since NAFTA the United States counts for 74% of Mexican imports and receives 89% of Mexican exports. In short, a very large part of Mexican external economic relations are with the United States. These exports are another of the themes of NAFTA and neoliberal propaganda, and there is no doubt that they have grown, but the economist explored the issue of who does the exporting. Mart�nez explained that most of the exports are undertaken by 300 companies, the vast majority subsidiaries of U.S. transnationals, and noted the increase of maquiladoras, which assemble components that are virtually 100% imported, exploiting the Mexican work force, which 15 times cheaper than its U.S. counterpart. He stressed that Canada and the United States receive 96% of Mexican exports, with the other 4% dispersed among thousands of small companies constantly under the threat of being bought out or going bust, thanks to neoliberal policies. He used the Mexican textile industry as an example. This sector has increased exports to the United States, but 71% of its companies are U.S.-run and were set up in Mexico after having eliminated Mexican capital. Mart�nez quoted Mexican economists who claim that every dollar of industrial exports only contains 18 cents� worth of national components. Referring to the maquiladoras, he clarified that for every dollar exported the national components are worth two cents. He mentioned cargo land transportation, which was liberalized overnight by NAFTA, something which had taken 40 years to resolve as far as European integration was concerned, and around 15 years for the United States itself. The result of this is that in Texas 50% of Mexican transport is rejected, in Arizona 42% and in California 28%. He outlined the vicissitudes of the agricultural system which, due to its contact with its U.S. counterpart, must compete with the most sophisticated system of its kind in the world, riddled with intricate subsidies. In addition to this, the U.S. system also posses the most technically developed economy. The results are negative for the Mexican economy, for example in the rice industry, in which Mexico had been an exporter. Now, national production has been replaced by U.S. imports, which count for 50% of Mexican consumption of this product. Mexico�s traditional potato exports have been blocked by the United States for sanitary reasons, while U.S. potatoes invade the Mexican market. The economist also noted that Mexico used to be a big cotton exporter and has now become one of greatest importers of this product. Completing the analysis, he reported that Mexican agricultural land has been reduced and there are six million displaced workers in this sector, who used to grow produce now imported from the United States. These workers search hopelessly for work or try to pass the wall of democracy that the United States has erected on the Mexican border, a decision which involves risking their lives and facing the abuse immigrants suffer at the hands of their powerful northern neighbor. Quoting studies by Mexican economists, he announced that 47% of Mexicans are living in poverty and 19% in destitution. Sinc e NAFTA has been operating, the price of the family food basket has increased by 560%, while salaries have increased by 136%. He also explained that during Zedillo�s government the minimum wage lost 48% of its buying power. He concluded by saying that Latin America should carefully examine itself in that mirror. _________________________________________________ KOMINFORM P.O. Box 66 00841 Helsinki Phone +358-40-7177941 Fax +358-9-7591081 http://www.kominf.pp.fi General class struggle news: [EMAIL PROTECTED] subscribe mails to: [EMAIL PROTECTED] Geopolitical news: [EMAIL PROTECTED] subscribe: [EMAIL PROTECTED] __________________________________________________
