NAFTA Means Better Future for Mexicans

by Aaron Lukas

Aaron Lukas is an analyst with the Cato Institute's Center for Trade Policy Studies.

February 21, 2001

It's telling that Elizabeth Topping and Ann Strachan, research associates at the Council on Hemispheric Affairs, attempt to discredit NAFTA by claiming that "more Mexicans currently live below the poverty line than did in the early 1980s" ("NAFTA makes rich richer," Feb. 16).

Sounds quite damning. Yet NAFTA wasn't created until 1994, while the Mexican economy suffered major crashes in 1982, 1988, and 1994 due to unsustainable levels of government debt, foolish monetary policy, and an over reliance on oil exports. By choosing a pre-crash year for their comparison, Topping and Strachan paint a misleading picture of Mexico's economic health in the 1980s.

NAFTA was a response to economic misery, not the cause of it.

Also contrary to the authors' claims, the involvement of U.S. businesses has positively influenced both labor conditions and environmental quality in Mexico.

First, domestic firms are increasingly forced to compete with foreign-owned businesses and joint ventures by offering better working conditions and higher pay.

Second, U.S. production methods and technology are demonstrating to Mexican managers that it is possible to be both green and profitable.

Finally, far from "racing to the bottom," the Mexican government has actually strengthened its environmental regulations and enforcement procedures since NAFTA has been in place.

Many Mexicans will undoubtedly continue to live in conditions of grinding poverty for the foreseeable future. Nevertheless, for perhaps the first time in Mexico's history, parents can be confident that their children will have greater opportunity than themselves. This is what NAFTA really means to our neighbors south of the border.

Aaron Lukas is an analyst at the Cato Institute's Center for Trade Policy Studies and author of "WTO Report Card III: Globalization and Developing Countries."

This article appeared in USAToday.