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June 15, 2017

NAFTA Legacy Series: Mexico’s Lost Opportunity

With NAFTA renegotiations about to begin, Public Citizen has compiled the latest information on how NAFTA’s outcomes measure up to its proponents’ promises. This is the fourth of a four-part expose.

To hear President Trump’s version of NAFTA, Mexico was the big winner. The reality is that NAFTA cost more than two million Mexicans lost their livelihoods related to agriculture. Mexican workers’ real wages are 9 percent lower or $1,500 less than in the year before NAFTA with median manufacturing wages of $2.50 per hour sufficient to support basic needs.

After the first two decades of NAFTA, Mexico’s real gross domestic product per capita growth rate has been a paltry 18.6 percent, ranking 18th out of the 20 countries of Central and South America. In contrast, from 1960 through 1980, Mexico’s per capita gross domestic product grew 98.7 percent. Mexico would be close to European living standards today if it had continued its previous growth rates.

And Mexican taxpayers have forked over $204 million to corporations attacking domestic laws in front of NAFTA tribunals of three corporate lawyers whose decisions are not subject to appeal.

The Mexican people – like people in the United States - were promised that NAFTA would strengthen their economy and raise wages. But after more than 20 years of NAFTA, over half of the Mexican population, and over 60 percent of the rural population, still fall below the national poverty line.

Mexican farmers suffered the worst under the agreement. Before NAFTA, Mexico only imported corn and other basic food commodities if local production did not meet domestic needs. But NAFTA eliminated Mexican tariffs on corn and other commodities and required revocation of programs supporting small farmers. Amidst a NAFTA-spurred influx of cheap U.S. corn, the price paid to Mexican farmers for the corn that they grew fell by 66 percent, forcing many to abandon farming. From 1991 to 2007, about 2 million Mexicans engaged in farming and related work lost their livelihoods. The price of tortillas – Mexico’s staple food – shot up 279 percent in the pact’s first ten years, even as the price paid to Mexican corn farmers plummeted.

To read more on NAFTA’s effects on Mexico, please click here

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