Disadvantages of NAFTA:
Loss of U.S. Jobs:
Since the cost of labor is cheaper in Mexico, many manufacturing industries moved part of their production from high-cost U.S. states. Between 1994 and 2002, the U.S. lost 1.7 million jobs but gained 794,00 jobs, for a net loss of 879,000 jobs of which 78% were in manufacturing. States hit particularly hard include California, New York, Michigan and Texas. These states have high concentrations of industries (such as motor vehicles, textiles, computers, and electrical appliances) which moved a large number of plants to Mexico. (Source: Economic Policy Institute,
The High Cost of Free Trade, November 17, 2003)
Lower U.S. Wages:
Employers in industries that could move to Mexico used that as a threat during union organizing drives, thus suppressing wage growth. Between 1993 and 1995, 50% of all companies used the threat; by 1999, that rate had grown to 65%.
Mexico's Farmers Are Being Put Out of Business:
Thanks to the 2002 Farm Bill, U.S. agribusiness is heavily subsidized - as much as 40% of net farm income. As tariffs are removed, corn and other food is exported to Mexico below cost. This benefits consumers, who pay less for food, but makes it impossible for rural Mexican farmers to compete. In contrast, between 1990-2001, Mexico decreased its subsidies to farmers from 33.2% to 13.2% of total farm income. Most subsidies go to Mexico's large firms, anyway. (Source: International Forum on Globalization,
Exposing the Myth of Free Trade, February 25, 2003; The Economist,
Tariffs and Tortillas, January 24, 2008)
Maquiladora Workers Are Exploited:
NAFTA caused an increase of the maquiladora program, in which U.S. owned companies employ Mexican workers near the border to cheaply assemble products for "export" to the U.S. This now comprises 30% of Mexico's labor force. These workers have "no labor rights or health protections, workdays stretch out 12 hours or more, and if you are a woman, you could be forced to take a pregnancy test when applying for a job," according to Continental Social Alliance. (Source: Worldpress.org,
Lessons of NAFTA, April 20, 2001)
Degradation of Mexico's Environment Has Increased:
In response to NAFTA competitive pressure, Mexico agribusiness has increased its use of fertilizers and other chemicals, costing $36 billion per year in pollution. Rural farmers have expanded into more marginal land, resulting in deforestation at a rate of 630,000 hectares per year. (Source: Carnegie Endowment,
NAFTA's Promise and Reality, 2004)
