Do you know what NAFTA stands for? Though many students may not, a teach-in with Associate Professor of Sociology Joe Bandy on Monday revealed its relevant and lasting effects on the United States and Mexican economies.
NAFTA stands for the "North American Free Trade Agreement." Created in 1992, the purpose of the accord is to reduce trade barriers in North America. The plan phases in gradually, culminating in an end to agricultural tariffs in 2015.
According to Bandy, the agreement is actually a "free investment agreement," and its real purpose is to increase corporations' abilities to invest abroad through lowering trade barriers.
Bandy mentioned NAFTA's possible benefits, including augmented economic efficiency, modernization, and increased interconnectedness, but said that in practice, "as companies become more able to move overseas, countries seeking investment will lower standards to attract investment, [leading to] labor standard decline."
Environmental standards have also fallen as a result of NAFTA because of industrial dumping.
"The U.S.-Mexican border has become a cesspool," said Bandy.
Sophomore Shelley Barron, co-chair of the Democratic Left, which sponsored the event, said that NAFTA has created a "race to the bottom [where] firms compete for the cheapest production."
These conditions have lead to a polarization of wealth in Mexico, where corporations with political ties make large profits while the actual wages and conditions of workers decline, according to Bandy.
Although some macroeconomic indicators, including inflation and total debt have improved, these changes have not helped Mexico because the industrial factories do not contribute to the country's economy, Bandy said. Rather, they export their goods and do not buy raw materials from Mexican suppliers.
Solving these problems is also difficult, because consumer boycotts of Mexican-produced goods could dissolve some areas' only jobs, further depressing local economies. Global labor standards, which might also help, would be almost impossible to implement.
According to Bandy, the only avenue for mitigation of these conditions is for consumers to work with foreign labor associations for a better work environment and less ecological degradation.
However, this policy would mean drastically rethinking the logistics of NAFTA, Bandy said.