How Did NAFTA Increase Globalization?
Countries around the world have strived to implement neoliberal policies in order to increase globalization and improve economic growth. The signing of the North American Free Trade Agreement in 1994 proved to be revolutionary as Mexico transitioned into a capitalist nation. Supporters of NAFTA promised reduced tariffs, free trade, and an increase in employment. In Mexico, NAFTA led to a rise in exports and imports to the United States (US) and Canada. Economic growth surged and contributed to a combined gross domestic product (GDP) of over $20.08 trillion. Additionally, the labor rights side agreement, known as the North American Agreement on Labor Cooperation (NAALC), accompanied NAFTA in order protect, enhance, and enforce basic workers'
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In fact, Mexico’s poverty rate in 2012 was 52.3 percent, similar to the poverty rate in 1994. In 2012, there were 14.3 million more Mexicans living below the poverty line than in 1994. NAFTA also led to a decline in the Mexican labor market. In 2014, the unemployment rate was five percent, as compared to an average of three percent during 1990-1994. The loss of local agricultural employment contributed to the rising unemployment rate. Under NAFTA, subsidized crops from the US were cheaper to import, which put many local farmers out of business. From 1991-2007, 4.9 million Mexican farmers were displaced. The economic failures of NAFTA ultimately decreased the quality of life for Mexican …show more content…
Despite the inclusion of the NAALC, labor rights violations continue to occur, along with a lack of government accountability. In 2004, the average factory worker in the US made $18 per hour, as opposed to a Mexican factory worker’s wage of $3 per hour. Also, the rate of unionization of the working population decreased from 22.4 percent to 13 percent from 1990 to 2012. Maquiladoras also fail to enforce safety and health regulations for workers. The exposure to toxins has caused high occurrences of miscarriages, birth defects, respiratory problems, and rashes. The NAALC has proven to be ineffective because it only requires that each country implements its own domestic labor laws, without a penalty for reducing labor protections. Since the agreement gives sovereignty to each country, there are no requirements to adopt any new international labor laws. Workers are able to file labor complaints to the National Administration Offices (NAO), but must be accepted for review. However, the petition procedure is a lengthy bureaucratic process that cannot directly pose sanctions on businesses. From 1994 to 2006, 38 complaints were filed, including 24 against Mexico. Between 2006 and 2009, no complaints were filed, and only one was accepted in 2010 against Mexico. The dramatic reduction in the number of complaints shows
In fact, Mexico’s poverty rate in 2012 was 52.3 percent, similar to the poverty rate in 1994. In 2012, there were 14.3 million more Mexicans living below the poverty line than in 1994. NAFTA also led to a decline in the Mexican labor market. In 2014, the unemployment rate was five percent, as compared to an average of three percent during 1990-1994. The loss of local agricultural employment contributed to the rising unemployment rate. Under NAFTA, subsidized crops from the US were cheaper to import, which put many local farmers out of business. From 1991-2007, 4.9 million Mexican farmers were displaced. The economic failures of NAFTA ultimately decreased the quality of life for Mexican …show more content…
Despite the inclusion of the NAALC, labor rights violations continue to occur, along with a lack of government accountability. In 2004, the average factory worker in the US made $18 per hour, as opposed to a Mexican factory worker’s wage of $3 per hour. Also, the rate of unionization of the working population decreased from 22.4 percent to 13 percent from 1990 to 2012. Maquiladoras also fail to enforce safety and health regulations for workers. The exposure to toxins has caused high occurrences of miscarriages, birth defects, respiratory problems, and rashes. The NAALC has proven to be ineffective because it only requires that each country implements its own domestic labor laws, without a penalty for reducing labor protections. Since the agreement gives sovereignty to each country, there are no requirements to adopt any new international labor laws. Workers are able to file labor complaints to the National Administration Offices (NAO), but must be accepted for review. However, the petition procedure is a lengthy bureaucratic process that cannot directly pose sanctions on businesses. From 1994 to 2006, 38 complaints were filed, including 24 against Mexico. Between 2006 and 2009, no complaints were filed, and only one was accepted in 2010 against Mexico. The dramatic reduction in the number of complaints shows