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 Editorials | Issues | January 2008 
Scholar: NAFTA Has Helped Mexico, but Not Enough
 David Gaddis Smith - San Diego Union-Tribune
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| | Gustavo Vega, director of the Center for International Studies at the Colegio de Mexico. | | |
NAFTA has done the job it was negotiated for, but it has not been enough, a Mexican political economist says.
Gustavo Vega, director of the Center for International Studies at the prestigious Colegio de Mexico in Mexico City, said that while NAFTA has helped create more jobs for Mexicans, it has not helped create enough of them.
Still, had it not been for passage of the North American Free Trade Agreement in 1993, Mexico would have suffered a much-greater financial crisis after its economy crashed in December 1994, he said.
“It helped us to recover from the crisis sooner rather than later,” Vega told the Center for U.S.-Mexican Studies at the University of California San Diego on Tuesday.
Two million jobs were created in Mexico between 1995 to 2001, according to Vega. “But we need a million every year. It is not enough,” he said.
Last year, the country saw almost a million new jobs, Vega said, citing Mexico's Central Bank. Despite that growth, he said the United States' economic problems are likely to hurt Mexico this year.
Vega also noted that NAFTA's positive impact on Mexico has been undercut by the Sept. 11, 2001, attacks in the United States and the rise of Chinese exports.
U.S. imports into Mexico have declined sharply, he said, while imports from China have risen. “We have a huge surplus with the U.S. The issue is China,” he said.
Vega said he thought Mexico could prosper by finding economic areas where it could do a better job than China at producing certain goods.
NAFTA also has been a factor in transforming Mexico politically. “I would... argue it helped the transition to a democratic regime,” Vega said.
In 2000, Vicente Fox of the conservative National Action Party, or PAN, ended the Institutional Revolutionary Party's 71-year grip on the Mexican presidency.
Vega said NAFTA has benefited Mexico's more-industrialized north far more than the more-rural south.
He said President Felipe Calderón of the PAN took almost all the northern states in the 2006 election, while left-of-center candidate Andrés Manuel López Obrador took almost all of the southern ones.
The once-ballyhooed Puebla-Panama plan put forth by Fox to benefit the south has not gone anywhere, Vega said, because officials were “not able to come up with financing.”
He said many groups have been pushing for a renegotiation of NAFTA because they fear that Mexican corn producers will not be able to compete with more-efficient U.S. farmers now that all agricultural tariffs have been lifted.
But he said data shows that Mexican corn production has not been falling despite the reductions in tariffs since NAFTA began.
“I don't think the renegotiation of the agreement will fly,” he said, while adding, “There are some areas where some communities will need some support” to cope with the impact of cheaper U.S. corn imports.
He said that for NAFTA to work better and for the border to be more efficient, security inspections should be moved to Mexican factories where shipments originate. He said inspected goods should be placed in sealed and tamperproof containers.
Vega said Mexico also needs Congress to pass economic reforms to compete and provide more jobs for its people. “The new Congress seems to realize some things cannot wait,” he said, pointing to the partial fiscal reform passed last year.
Energy reforms are among the issues still waiting action. Vega said a lot may depend on which faction gains control of the Democratic Revolution Party in a leadership election this year.
The election pits López Obrador's more intransigent supporters against a more practical-minded group that Vega called the Chuchos, who back Sen. Jesús Ortega. People named Jesús are often called Chucho in Mexico. |
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