by Liza Wilcox

This is an essay written by Liza Wilcox as part of a Master in International Relations degree at Victoria University of Wellington. Liza contrasts the increasing freedom of movement for multinational capital and the corporate elite under free trade regimes such as NAFTA with the restrictions placed on the movement of ordinary workers.

Global economic liberalisation comes at a high price to the majority: farmers and labourers whose options are limited and movements are carefully restricted in contrast to their transnational, completely mobile employers. Restrictions placed on human movement satisfy a range of agendas and preserve the comparative advantage of low labour costs that makes the contemporary global economic status quo so profitable for corporations and the wealthy upper class. The liberal reforms undertaken in Mexico, for example, and their international instrument the North American Free Trade Agreement (NAFTA), have created an environment equally or more conducive to illegal, dangerous and demeaning emigration to the US – in some cases, to harvest the same crops farmed locally just a few years prior.

This paper discusses the emerging global labour market, labour migration trends and restrictions, and trade interactions. It examines the results of NAFTA in the context of increasingly restrictive US immigration policy and explores some implications for free trade agreements and future US immigration policy.

Labour migration, globalization and free trade

Ten million people leave their home country every year, and the number of people living outside the land of their birth has more than doubled since 1975, to 175 million, though 2002 figures seem to show a leveling off of migration to OECD countries. 1 The overwhelming majority of migration today is economically driven.2

Older flows of migrants have been joined by new migrations - many of which are a result of economic and social change in newly industrialized countries. Most destination countries have more socially, economically and culturally diverse people coming from more places for more reasons. This is sometimes referred to as the ‘globalization’ of migration.

In 1977, as part of the debate on theories of development, Frobel, Heinrichs and Kreye posited a world market for labour and for production sites, made possible primarily by the fragmentation of the productive process, new and better transport and communication technology and the ‘virtually inexhaustible potential of available labour.’ 3 It is only the very highly skilled, though, who can take advantage of the international opportunities of the labour market now offering virtually free movement for professional workers with the right education and skills.4

There have been a number of shifts in the global economy which affect labour migration. More work is insecure, temporary or part-time. Developed countries have seen the decline of traditional skilled manual occupations, heavy industry and manufacturing and growth in informal economies and services sector, leading to demand both for high- and low-skilled workers. Meanwhile more capital investment and manufacturing is taking place in developing countries, though advances in technology limit the number of workers needed. Differentiation of the labour force is rising. Women and minorities are tending to be pushed into casual work or work in the informal economy. Undocumented migration and policies to respond to it are also on the rise.5

While the last thirty years have seen an enormous increase in cross-border flows of money and goods and a proliferation of international trade agreements to institutionalize free trade across national and regional boundaries, and in spite of increasing numbers of migrants, the trend has been toward increasingly restrictive migration policies. Governments tend to encourage, or at least try not to discourage, temporary movement of people – as tourists, students and business visitors – but they take a much more restrictive approach to the permanent movement of people across borders and to the movement of unskilled and semi-skilled labour. This has placed millions in the precarious position of illegally meeting recognized labour needs at their own cost and risk, without the standard protections and rights of civil society.

Even nations of traditional immigration like New Zealand, the US and Australia have implemented stricter controls, particularly since September 11, 2001. The European Union is not immune; though the Schengen countries of the EU have a commitment to open borders within the region, the EU itself has taken more measures to restrict access, patrol its boundaries, detain and deport violators.6 This contradiction is sometimes a problem for policy makers. Recently a proposal to check trucks for immigrants at the Mexico – US border was vigorously opposed by business interests citing the time and money that would be lost in the delays.7

The issue is a vexed one. A number of theorists’ ideal vision is one of completely open borders, and even the Wall Street Journal has editorialized to that effect.8 The vast majority of studies show a positive effect on the overall economic welfare of countries receiving immigrants, as well as on the immigrants themselves. Restrictions on movement of people across regions costs far more than do trade restrictions on goods.9 Economists agree that migration has an overall positive effect on standard of living, simply because economic migrants go from a place where they are less productive to a place there they are more productive.10 But economists also agree (after liberal economist Henry Simons fifty years ago) that free immigration ‘would level living standards, perhaps without raising them anywhere.’11 These two apparently contradictory maxims continue to underpin economic conceptions about migration.

The increased flexibility that corporations enjoy is expressed in mobility and the freedom to pick and choose among production locations. This has exacerbated a shift in economic power away from labour.12 As corporations consolidate their advantage using ‘whipsaw’ bargaining (threatening to move elsewhere), they pursue their policy agendas more successfully in a cycle that continually elevates neoliberal ideology, neutralizes the regulatory capacity of national government, and squeezes higher profits from lower-paid workforces.

Sociologist Zygmunt Bauman has observed that from ‘globalization’ has emerged an asymmetry of power based upon the freedom to move:

“Mobility has become the most powerful and most coveted stratifying factor; the stuff of which the new, increasingly world-wide, social, political, economic and cultural hierarchies are daily built and rebuilt. …The mobility acquired by ‘people who invest’ – those with capital...- means the new, indeed unprecedented in its radical unconditionality, disconnection of power from obligations: duties towards employees, but also towards the younger and weaker, towards yet unborn generations and towards the self-reproduction of the living conditions of all; in short, freedom from the duty to contribute to daily life and the perpetuation of the community.”13

NAFTA is a ‘hyperglobalist’ project, a term used by David Held and colleagues to describe a tendency among some globalization theorists toward belief in the inexorable growth of economic liberalism and ultimate emergence of a single global market. This is said to herald the receding power of the nation-state in world affairs. Many believe the new forms of organization associated with this ‘borderless’ market will ultimately supplant the state as the primary political unit.14 Though hyperglobalists come in all politico-economic ideological stripes, from neoliberal to neo-Marxist, those who drafted NAFTA were certainly neoliberals. Supporters’ political and economic analyses frequently celebrate economic gains at a national level while musing over the ‘narrowness’ of integration thus far and suggesting methods for deepening the integration between the nations’ economies, institutions and cultures.15 Ultimately, though, NAFTA is an agreement among state leaders who are and can be expected to continue to be essentially nationalist in their outlook, particularly given the aftermath of September 11, 2001.

Mexico, which began economic liberalisation in 1981 and crowned its reforms with the implementation of NAFTA in 1994, was seen as the developing nation in the best position to make good use of the neoliberal model. Its proximity to the vast US market and ready US-based constituency of millions of Mexican American consumers and voters was said to give it a clear advantage.16

Mexican Migration to the US: Trends and Policies

The world’s largest migration ‘system’ is from Mexico to the US. The International Organization for Migration estimates between one and two million Mexicans enter the US for more than 3 months each year and about 300,000 stay.17 The number of undocumented Mexican immigrants currently in the US is estimated by the US Citizenship and Immigration Service (CIS) at 4.8 million, up from 2 million in 2000.18 In spite of the flight of hundreds of thousands of manufacturing jobs from both countries, a senior associate from the Carnegie Endowment for International Peace recently observed that “the last 10 years clearly demonstrate the durable need for Mexicans in low-value-added manufacturing and low-skill services in the United States.”19

The difference between legal and illegal labour migration in the US is closely related to the type of work; for professional work there are many visas available. Undocumented work tends to be in agriculture, construction and the service sector. Low-skill non-agricultural work visas are limited to 66,000, while obtaining permission from the Department of Labour to work legally in agriculture requires the employer to take the initiative.20 As migrant workers are hired because they accept wages and conditions that fall below legal standards, employers rarely do so. These visas are seasonal and, unlike high-skill work visas, provide no access to permanent residence.21

The Mexican Ambassador to New Zealand said recently that of the three major areas of the two countries’ relationship- migration, security, and trade- migration is the ‘unresolved’ area which remains the ‘main challenge.’ The number of Mexican-born resident in the US grew 80 percent from 1990 to 2000, and while border crossings fell for a short period after September 11 2001, they were back and climbing by 2003. Massive investments in border militarization, additional surveillance and fencing, and increased border patrols have only made the passage a more dangerous one.22 For the last few years, border-crossing deaths have averaged about one person per day – higher than ever - often from exposure as they are forced to seek more and more dangerous routes, sometimes from border official or civilian vigilante persecution.23 An industry in people-smuggling has sprung up, eating up savings and exposing people to added dangers.

The United States has taken a three-stage approach to the problem of labour migration from the south.24 The pattern tends to range between ignoring the influx, implementing major crackdowns, and limited-period legalizations. 1954’s Operation ‘Wetback,’ a quasi-military operation, saw a million Latinos deported in one year. It was followed by the Bracero (farmworker) program, which permitted millions of Mexicans to work in the U.S. agricultural sector each year, provided they returned home for the winter. After the Bracero program ended border militarization, which has become institutionalized rather than sporadic, began in the 1970s. Another accumulation period was followed by an Amnesty programme for immigrants already living in the US in 1986 and by four border security operations, all still current: Operation Gatekeeper, Operation Safeguard, Operation ‘Hold the Line,’ and Operation Rio Grande. In 2000, 1.6 million apprehensions were made at the southwest border alone.25 After September 11, 2001, the border patrol received massive sums and advanced weaponry. By 2002 there were 27 times more border patrol agents stationed at the U.S./Mexican border than at the U.S. border with Canada.26 The heavy border deterrence strategy has succeeded in moving migration traffic rather than limiting it and has contributed business to the coyotes, or smugglers.27

Restrictionist legislation regulating immigration and immigrants was passed in 1996. After September 11, 2001, a raft of laws and regulations appeared limiting civil liberties and immigrants’ rights in particular.28 In spite of all the measures to restrict and deter immigration, the US Citizenship and Immigration Service itself estimates that undocumented immigration from Mexico has more than doubled – and some say NAFTA was to blame.

FOCUS: Results of the North American Free Trade Agreement

NAFTA has been called the ‘capstone’ on the effort begun in the early 1980s by US-educated economists and businesspeople intending to privatize, deregulate and globalise the Mexican economy. After taking control of the ruling Partido Revolucionario Institucional (PRI), they eliminated the extensive set of institutions which had upheld the corporatist social contract that shared the proceeds of economic growth among workers, farmers and small businesses 29 In its place went NAFTA.

NAFTA went into effect in 1994 amid a great deal of controversy. Washington had insisted on leaving migration off the agenda. Its neoliberal proponents predicted economic gains for all three signatory nations in the form of economic growth, increased trade, job growth, higher foreign direct investment (FDI), and, ‘sotto voce,’ as one commentator has observed, a slowing of illegal Mexico-US migration.30 Migration is a highly politicized arena, one that many countries – including Mexico and the US, as Ambassador Arce suggested in her address - compartmentalize in their negotiations; immigration is not typically negotiated in trade agreements.31

Almost twelve years later the controversy continues. Data can be found to support almost any view. The governments of the US and Mexico are (still) strong supporters of the trade agreement, and on some fronts the agreement has been a success: trade volumes between the two nations have more than doubled to almost $2 billion per day, Mexico now has $90 billion in US FDI, and unemployment is down, according to Ambassador Arce.32 Mexico’s per capita income rose 24 percent during the period to just over $4000.33 In addition, US consumers have seen cheaper imported goods from Mexico34 as Mexico’s exports more than doubled from 1993 to 2001 to $139 billion.35

Critics of the treaty agree that trade is up, but point to a number of areas in which they say NAFTA has been a failure. The lion’s share of new jobs - and in 2002, along with the capital, 85 percent of FDI36 - went to border states. Similarly, while Mexican exports have tripled, the big gains have gone to a small number of local companies.37 Around half a million jobs were created in border-region maquiladoras (factories), but studies estimate losses of 200,000 to 400,000 manufacturing jobs to China by 200338 This, of course, was a driving principle behind the reforms – creating opportunities for highly mobile employers while less mobile workforces fear for their jobs and lose bargaining leverage, even as increasingly accommodating governments turn police and military against their own workers’ protests. Meanwhile industry leaders recognize – and participate in - the threat posed by China and India to Mexico. “If I opened a plant in India, I’d have all the engineers and technicians I need” one transport company division president warned. They prescribe better training for Mexican managers to boost quality, control waste and increase productivity.39

Standard trade theory has it that international competition will cause wages to converge between trading partners. If one partner is a developing nation, wages would tend to rise while if the other is developed, they would tend to fall. This has happened under certain circumstances, but developments in thinking on international trade have revealed ‘trade traps,’ or circumstances under which trade according to a nation’s comparative advantage may not lead to a rise in living standards in developing countries. Increased productivity so frequently fails to result in higher wages; when there is a seemingly inexhaustible supply of labour (usually due to a continuous stream of people moving from agriculture into an industrial workforce) there is little incentive for business to increase labour productivity or wages. Exports may grow, but the revenue will accrue to the national income, not the workers’.40 This may explain the disappointing failure to see big gains in productivity.

The PRI’s neoliberal reforms were touted to contribute to growth through making easier access to capital for domestic firms’ new enterprise or growth through the privatisation and foreign sale of banks. But the banks were sold to friends of public officials, bailed out of the peso crisis with $60 billion of public money, then resold the banks at huge markups to major international banking groups. Lending to Mexican business fell precipitously from 10 percent of GDP in 1994 to .3 percent in 2000.41

One of the most contentious issues is wages. There is evidence that real wages in Mexico have dropped 11 percent from 1994 to 2001,42 blamed by some on NAFTA and by others on the peso crash.43 Another possible explanation lies in US Government reports that in nominal dollar values, Mexican manufacturing wages (the sector most influenced by NAFTA) were about the same in 2000 as in NAFTA’s first year but had fallen considerably from 1981, when Mexico began its broad programme of free market reforms44. Economic growth in general has been below the performance of the previous corporatist regime. The Mexican middle class has shrunk and the poor have grown in number during those two decades.45 Proponents of NAFTA insist that benefits accrued to potential consumers across the region – whose numbers are far greater than producers - must be counted against losses to workers.46

But the effect that has attracted the most attention by ordinary Mexicans is the effect free trade has had on the country’s agricultural sector. Impressive growth (155 percent from 1987 to 2001) in the real value of agricultural trade prompted supporters to call the agreement a success, but as the US gradually reduced tariffs on its agricultural imports as agreed, Congress increased subsidies to American corn growers, allowing them to undercut Mexican corn farmers in their own market.47 In 2003 US farmers were receiving up to 12 times more in government assistance than Mexican farmers48. US corn exports to Mexico increased 18-fold between 1993 and 2000, when Mexico overtook the EU as an export market for the US.49 In nine years, US pork exports to Mexico grew by 726 percent.50 In spite of promises it had made before the agreement was signed to help small farmers increase their productivity through generous financial and technical assistance, the Mexican government actually cut funding for farm programs for its 20 million campesinos (small farmers) from $2 billion in 1994 to $500 million six years later.51

1.3 million farm jobs have been lost since 1993.52 In only four years from 1994 to 1998, the World Bank reports Mexico’s rural poverty rate climbed from an already-high 79 percent to 82 percent.53 Some allege that the plan was always to force Mexico’s rural population off the land and into cities as cheap labour for the new foreign investors.54 But cruelly enough, the jobs were not there in any case – while employment elsewhere stagnated, the new jobs were all in the maquiladoras, where mainly women were hired, in the border region. 55 It is this, critics say, that is behind repeated protests at the capital by tens of thousands of Mexican farmers.56

In the aftermath, farm plots have been abandoned, rural villages emptied. Michoacan state officials estimate that one out of seven people leaves for the US.57 While few have been prepared to publish direct conclusions about the numbers of migrants attributable to the complex changes wrought by NAFTA, Public Citizen’s Global Trade Watch, a US–based NGO, said in 2004 that industrial wages in Mexico had dropped by a quarter and undocumented emigration had doubled since NAFTA’s ratification.58

People emigrate for many reasons, but it is well recognized that economic hardship is a compelling one. These drastic changes in the Mexican economy are known to migration theorists as ‘push’ factors. These factors can be assumed to be even more compelling since 2001, as security and restrictive immigration measures undertaken by both nations have made crossing the border and surviving as an undocumented migrant within the US far more dangerous and difficult.

One study found emigration was part of a family strategy prompted by the changes in production patterns. Some family members (especially women and children) obtain manufacturing and agricultural export in northern Mexico, close to the border, while another family member is selected to take on the risks of seeking work in the U.S.59

Immigrants, though normally lower-skilled than their new countrymen, are often the semi-skilled of their countries of origin. This is because even illegal migration can cost a large amount of money – often far more than an average plane or bus ticket – and the poorest simply cannot put together the resources required. When large numbers of a nation’s publicly educated leave to work in another country, it can represent a subsidy to the receiving country.60 However, if remittances are large enough, as in the case of the Philippines and Mexico, officials prefer to encourage continued emigration in order to continue their access to foreign exchange.

It was against the backdrop of increasing labour market pressures in Mexico, heavy emigration, enormous vital US dollar remittances, and spirit of joint endeavour that President Vicente Fox thought he had reached an agreement with the White House to relax restrictions on migration in 2001. The two countries were on the verge of announcing a new programme when the events of September 11 caused the US to backburner the plan indefinitely. President Fox continued to seek an agreement but didn’t help his case by declining to join the ‘coalition of the willing’ when faced with an 80 percent disapproval rating of the war on Iraq and an election coming up.61 The Bush administration continued its silence until January 2004, when the President delivered a speech suggesting that undocumented labourers deserved human rights and proposing certain aspects of a guestworker programme. This was not followed by any concrete bill or proposal, but it may have helped him attract a record share of Latino votes in the election later that year.

More recently, Congress has seen a flurry of proposals for guestworker programmes but they face opposition from both parties. While immigration advocates reject a repeat of the systematized abuse of the Bracero programme and support access to citizenship for immigrant workers, many conservatives will not even accept guestworkers. Conservatives and nationalists, organized extreme racists, and even liberal environmentalists increasingly oppose immigration on grounds such as job protection, homeland security, population concerns, environmental degradation, urban sprawl, protecting cultural homogeneity, and ‘fairness’. Twice, organized anti-immigrant forces have attempted to take over the Sierra Club, a major mainstream environmentalist organization.62 Much of the language heard on Capitol Hill and the network news channels conflates immigrants with criminals. The REAL ID bill, passed May 4, 2005, prevents immigrants from having a driver’s license, empowers private police to enforce immigration laws, creates impossible requirements for asylum seekers and increases risks to migrants crossing the border.63

Even immigrant rights advocates are shifting to the right in the current environment. On May 12, 2005, Senators McCain and Kennedy introduced a bill, The Secure America and Orderly Immigration Act of 2005, that would fine undocumented immigrants and put them at the end of the line for permanent residence after six years of work. 64 Yet it is the most generous to immigrants among the proposals. All this is despite decades of research confirming that overall, immigrants improve US economic growth, contribute to GDP and the tax base, do not depress employment prospects or wages, supply low-cost food and services, and take jobs Americans do not want.65

CONCLUSIONS: Implications for trade agreements, immigration policies

Proponents of NAFTA support a specific process of rapid economic liberalisation which would ideally produce a ‘deeply integrated’ single North American market. Failures in internal and cross-border trade arrangements are seen as a sign of the need for further liberalisation and removal of all non-economic barriers,66 in spite of the fact that a fully integrated economic region would make Mexico and Canada, economies only 1/20th and 1/10th the size of the US economy, respectively, far more vulnerable to the vicissitudes of that enormous market.67

Immigration Impact Assessment

Sociologist and globalization expert Saskia Sassen criticizes policy makers for approaching immigration unilaterally, and as if it were an autonomous process unaffected by other processes associated with globalization. While trade and multilateral military operations have been subjected to a major ‘re-think’ in recent years, migration has not. Sassen argues the roles of free trade agreements, multinational corporations and global institutions such as the IMF are ignored, even though their activities directly displace hundreds of thousands of local small-scale producers and encourage emigration. Another unacknowledged agent is governments who displace large numbers of people by taking military action in their homeland. Sassen recommends ‘immigration impact statements’ to accompany every new free trade agreement or international loan. 68 Such an assessment would help establish timeframes and milestones for much longer adjustment periods, for instance, for the probable victims of future trade agreements.

American Immigration Policy

While the roles of external agents may go unacknowledged by governments, government is by no means unaware. It is well accepted that US employers, particularly in agriculture and services, ‘need’ additional workers and that government policy is an attempt, however clumsy, to facilitate that need. Some researchers even model immigration using numbers of border apprehensions as a proxy for US employer demand for illegal workers.69 It is unconscionable and clearly ineffective to pursue increasingly restrictive measures under current economic circumstances. The experience so far shows that preventing legal migrants only produces more illegal ones, which tends to provoke a negative reaction among the US public and politicians, leading only to more punitive and restrictive measures. Given that the US economy needs foreign labour, that each US worker raised and schooled in Mexico represents a gift from Mexico to the US, and that the impact of NAFTA on jobs in the US has been negligible in comparison with its effects on Mexico, it is reasonable to demand that officials reform the immigration system to legitimize migrant workers and to protect their basic rights. Activists in the US are calling for comprehensive immigration reform that would reflect these principles.

Bringing Labour back in

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a voluntary federation of 58 US national and international labor unions. After decades of deriding undocumented immigrants, the AFL-CIO made a surprising about-face in 1998. The turnaround came because unions recognized the critical need to build their own ranks and some unions, such as Service Employees International, already comprised a substantial proportion of immigrants and Latinos. The SEIU and Ladies Garment Workers unions led the way in reshaping organized labour’s approach to immigrants. Today the AFL-CIO is a prominent supporter of comprehensive immigration policy reform in order to protect workers’ bargaining rights and rights on the job.70 It is time to build organized labour in order to restore its negotiating position and balance the scales better between corporations, state and labour.

Supranational institutions and the example of the EU

Some supporters of free trade suggest that supranational institutions with authority to negotiate policy with governments might ‘in the distant future’ be created who would represent ‘the interests of the North American community.’71 This prospect may be a solution for many of the problems identified by both sides. There would have been a role, for instance, for an agency to ensure both governments kept their promises to their citizens and to one another. This option will probably not be embraced by supporters or opponents of free trade agreements as long as the objectives, the notion of ‘fairness,’ the obstacles and even the constituency continue to be variously defined.

Some, including President Fox and two of its framers now believe NAFTA would be improved if it bore a stronger resemblance to the European Union.72 There, a “social protocol” and a systematic funnelling of resources from richer to poorer nations has helped ‘level the playing field’ and, some argue, prevented mass movements of economic migrants. 73 President Fox supports provisions for free movement of labour and cross-border grants to compensate Mexico for the dislocations caused by free trade.74 Implementing something similar in North America, where the gap between rich and poor countries is far greater (and Mexico’s corrupt public sector receives only a small proportion of its revenues from the wealthy), would require dramatic reform. It has been suggested that a contribution comparable to the EU’s cohesion funds would be near $100 billion.75 Few are optimistic that this is in the offing.

Multilateral Framework

A supporter of CAFTA, NAFTA’s Central American equivalent, says, “NAFTA is a prime example of how we have allowed diplomatic policy to shape trade policy, and that’s a major flaw. There is always a diplomatic reason why you can’t go to Mexico, to China or India and enforce trade agreements because we always need something from them.”76

This is a valid consideration, but there is no multilateral framework to govern cross-border migration. The ILO World Commission on the Social Dimension of Globalization recommended a multilateral regime for the cross-border movement of people and liberalisation of migration as a prescription for increased global labour productivity. The report points out that most industrialized countries have ageing populations whose labour and social security problems could be mitigated by increasing immigration. Other benefits cited included the transfer of foreign exchange, skills and the stimulus to business activity by remittances and returning migrants to developing countries. The ‘diaspora effect’ has already stimulated the growth of high-tech and other industries in several East Asian countries and India.77 This is a welcome recommendation.

Solving the local capital problem – with remittances?

Mexican immigrants sent home $14 billion in remittances in 2003 – 4 billion more than all the FDI expected by Mexico in the same period.78 However recipients of migrant remittances often immediately spend the money - often on imported goods – providing less lasting benefit for the developing economy.79 The Mexican government tries to counter this trend by channelling remittances into ‘quasi-governmental’ credit unions to help provide local capital. This can only be helping to provide local access to lending, but as Jeff Faux points out, ‘It is an odd notion of economic development that rests on the meagre savings of low-wage Mexican workers in America while wealthy Mexicans regularly ship their capital to New York, London and Zurich.’80 The Mexican government might do well to look at its revenue mix and ways to prevent capital flight.

Neoliberal Reforms on Trial

Hyperglobalists think they know the direction history will take, which constrains the options they see available for solving problems or moving forward. Free trade agreements are the instrument of neoliberal ideology across national borders. Like the Ambassador, many mainstream analysts are reluctant to indict NAFTA for increased migration flows, instead confining their analysis to legal migration, which is mainly constrained by immigration law, or suggesting that it would have been worse without the agreement, or blaming ‘failures’ in the Mexican economy without exploring the context of those failures. 81

Much of the debate stems from the fact that proponents and opponents of liberalisation are addressing different problems. For instance, the author of an agricultural trade article mused that inefficiencies could be enhanced with the removal of all non-economic barriers, and that the establishment of trans-regional institutions would alleviate contention in “…such areas as dairy, beef, sugar, wheat, rice, corn, livestock, lumber, transportation and labour migration.” The article continues, “most agricultural disputes among the NAFTA countries stem from differences in national laws and regulations, divergent domestic farm programs and incompatible macroeconomic policies” and calls the lack of such institutions the ‘major dilemma’ confronting the new trade region. 82

But for others, what is on trial is not just a free trade agreement, but free trade itself and the reforms that accompany its inception in developing nations because of their effects on people. Cavenagh et. al noted that manufacturing wages had declined significantly in Mexico since the onset of these reforms. 83 Indeed, many of the economic shortcomings associated with NAFTA could as well be connected with Mexico’s economic liberalization programme. Mexico’s startling gap between rich and poor is not unusual among developing countries, but it is among the worst in the Western hemisphere.

The widening income and asset gap is a major factor in Mexico’s stagnant internal economic growth.84 From the bank sales scandals to the lending crisis to the small farms losses, there can be no doubt that these policies have gone a long way to making that gap worse. By 2000, voters were tired enough of failed promises from the PRI that they threw the party out after 71 years of rule.85 Ironically this is cited by one of NAFTA’s framers as evidence that labour unions have gained strength in Mexico.86

It is easy to see free trade as an engine being driven by the global corporate and professional elite, at a very high cost to the majority, labourers whose movements are carefully restricted in order to preserve the comparative advantage in production costs which make the current global neoliberal economic balance so profitable for some. This educated group uses ‘flexibility’ of corporate movement, the ability to produce capital through remote investment, the technology and telecommunications revolutions, the low cost of travel and increasing acceptance of transnational identities to enhance their profits and lifestyles. These features come close to Bauman’s description of the ‘globalization’ that continues to stratify and separate people:

What appears as globalization for some means localization for others; signalling a new freedom for some, upon many others it descends as an uninvited and cruel fate. Mobility climbs to the rank of the uppermost among the coveted values – and the freedom to move, perpetually a scarce and unequally distributed commodity, fast becomes the main stratifying factor of our late-modern or postmodern times. … A particular cause for worry is the progressive breakdown in communication between the increasingly global and extraterritorial elites and the ever more ‘localized’ rest. 87

Major North American food corporations such as Kraft, PepsiCo and McCain reinforced this point as they responded to the flood of foreign investment by reorganizing themselves as North American rather than national companies.88 Now they can swiftly move or outsource aspects of production among the three countries to minimise cost – make best use of corporate ‘flexibility’ – without bearing allegiance to any one of them.

Because of Mexico’s favourable position in relation to the US, some believe ‘If (neoliberalism) is not working there, it is unlikely to work anywhere.’89 John Audley, senior associate with Carnegie Endowment for International Peace, observes “The idea that free trade by itself can bring about changes that can control existing migration flows in the short-to-medium term is clearly wrong.” The continued press of hundreds of thousands of people seeking work in the US, against great odds, is clear evidence that for a great many Mexicans, it is not working.

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