NAFTA & Economic Migrants

With Trump’s erratic statements and policymaking continuing to gather steam, it is worth keeping in mind the assumed and actual relationship between the North American Free Trade Agreement and rates of economic migrants (or “illegal aliens”, as he would prefer to deem them) to the United States.

Arguments in favor of NAFTA, approved by the US Congress in December 1993, stressed that the number of Mexican workers coming without visas to the United States in search of work would decline drastically. This line of reasoning assumed that tariff-free trading between the United States and her southern neighbor would create a wave of new well-paying jobs in Mexico. Thereby, there would be no desire on the part of Mexicans seeking work to travel north across the US-Mexican border.

In fact, the opposite occurred. Immigration rates rose slightly. But the number of Mexicans leaving without the expected permissions in the US skyrocketed. Why?

Some academics have argued harsh immigration policies in place since the late Reagan years were to blame. Others claim that the failure of the Mexican government to fund large-scale infrastructure improvements across the country resulted in new manufacturing jobs linked to NAFTA clustering near the border. The infrastructure in these zones (including cities like Tijuana and Ciudad Juárez), however, was also severely lacking. As many high-quality US manufactures as expected, therefore, did not move their factories to Mexico. Jobs in Mexico linked to US markets thus became largely temporary within companies specializing in low-cost, low-quality goods. Competition from China for US manufacturing further exacerbated this problem. Ultimately, high-paying jobs in Mexico declined and the average wages of Mexican production workers declined. A similar story occurred in agriculture as subsidies cuts drove Mexican corn prices into a spiral and forced many farmers to abandon their plots. The US looked more attractive than ever.

It is worth keeping this story of the past twenty-four years in mind as we shape the counter-Trump narratives on NAFTA and immigration. The Peso is at an all-time low. Consequently, Mexican purchasing power is in shambles. In such times, immigration to the United States should rise.

Stripping NAFTA would push the Mexican economy into further turmoil. After more than two decades of open trade borders, Mexico highly relies on the United States as their primary purchaser of exports. (The Mexican market is also an important one for many firms based in the United States.) Erecting high tariffs would mean the sudden slashing of countless jobs, both in factories and in the many service sectors positions they support, and immediate financial peril for many.

And a harsher border policy, wall or no wall, could make the risks all that much higher for those motivated by a crippled Mexican economy to attempt a crossing. Coyotes will bring their clients, hoping to get to the US, to more and more remote desertous locations. Death counts will rise. And a humanitarian crisis will deepen.

NAFTA is far from perfect, and sinister in many ways, but repealing it without any alternative could be truly devastating for impoverished Mexicans searching for a better life.