Analysis of the Effects of NAFTA on National Sovereignty in Lawmaking

Paul Andreas Fischer
Anore Horton
US-Latin American Relations

Analysis of the Effects of NAFTA on National Sovereignty in Lawmaking

The average Mexican worker, predominantly disenfranchised females, in Maquiladoras located in border towns such as Tijuana make $3.50 a day, trading basic human rights for the unusually high wages. Sub-par squatter housing spring up around these industrial wastelands. Water pollution is unregulated, resulting in unexplained and untreated spots, sickness, and birth defects. An article points out that “products that are imported into Mexico from non-NAFTA nations will be charged at a higher tariff rate if those products are available from either America or Canada” (Saldana, 35). Since the passage of NAFTA and the ensuing economic crisis, this mode of production has exploded as mobile international corporations rush to take advantage of Mexico’s oppressed and underpaid labour without the fetters of international tariffs, while excluding other nations in the world from competition. This agreement has perverted the ideals of classical liberalism through economic exploitation of member nations and unfair distribution of mutual benefits taken by rich nations. This has limited national sovereignty in lawmaking and introduced pre-existing government interference into economic zones. There are two main tenets of classical liberalism that are drastically affected or impinged upon by NAFTA: the precept of non-interference of the government in the economy and that of national sovereignty in legislative processes.
Classical liberalism was introduced and dominated western economic thinking until the advent of communism as a reaction to the mercantilist practices of European colonial powers. As the political ideas of nationalism and the state began to have a greater influence on the fate of nations, as opposed to the former rule of gold flow, most notably as seen in the success of post-revolutionary France under Napoleon Bonaparte, economic concepts also entered a state of flux.
These anti-government liberal ideals has become neo-liberalism under which heavily subsidised American agriculture completely uproots indigenous farmers in Mexico with the introduction of NAFTA and removal of costly trade barriers (Bacon, 24).  Neo-realism focuses on a strict avoidance of national debt, and that all measures be taken to honor borrowed and loaned money. Because of the Federal government’s involvement subsidising food production, NAFTA actually introduces more government interference in Mexico’s economy by allowing food into the country at a price substantially lower than natural equilibrium, even if it is a the price of outcompeted indigenous farmers and the US taxpayer, both in paying the production cost and in enforcing immigration laws increasingly under pressure. Consequently the Mexican government is unable to protect farmers with tarriffs even as American subsidies and expansive corporations make it impossible to survive on small farms.
J.S. Mill wrote On Liberty and began a process of differentiating the ideal government of a people based on their level of responsibility that ironically culminates in 1848 when Karl Marx writes The Communist Manifesto which professes to identify the “evolution” of government and essentially creates an ideal government type, communism, that exists as the pinnacle of human government form, at least in theory. Neo-liberal ideals, said to be the inspiration for NAFTA, evolved towards the end of the Cold War as a means to create zones of inequality and corruption which extend lines of credit to third world nations, further indebting them to the capitalist system. One author writes of NAFTA, “the benefits are not necessarily accruing to small farmers or the hungry” (Saldana, 31), and instead policies that are mutually beneficial in models are shown to skew heavily towards holders of capital, in this case rich nations, when applied in practice. During the Cold War, allowing free trade benefits to accrue in nations allied with America had an intrinsic strategic value that allowed America to corner the Soviet Union economically.
With the failure of the communist experiment in Soviet Russia, however, the focus of free trade advocates moved on from simple propagation of capitalism to taking full advantage of the rapidly expanding and underdeveloped markets in former Soviet states and the third world newly available for investment and trade. Radically different levels of education, societal, cultural and political norms across the world meant application of the free trade legislation and regulation that exists in America would not provide a maximum return for investors in the richest countries. This means drawing cheap labour towards American corporate interests while still cheaper food is exported, as the former coordinator of the Indigenous Front of Binational Organizations, Rufino Dominguez says, “There are no jobs, and NAFTA drove the price of corn so low that it is not economically possible to plant a crop anymore. We come to the United States because there is no alternative” and connects the impact of free trade on small farmers (Bacon, 23).
From OPEC to the Steel and Coal Commission (later the European Union), regions and continents have organized in recent years to protect themselves from the onslaught of cheap raw materials and labour available in the third world. In NAFTA, however, the incorporation of Mexico, which has significantly different economic make-up to the USA or Canada means that the agreement serves a unique purpose. Rather than a trade league or attempt to share the burdens of globalization, the purpose of NAFTA is intrinsically exploitative. In the aftermath of capitalism’s triumph over International Communism, NAFTA represents the creation of America’s own satellite state system, enforced by the sword of NATO member nations.
Signatory countries in NAFTA are forced to subject their own sovereignty in national legislation to international committees and boards. Although added to give greater equality to a naturally unequal distribution of wealth and legal power between the two nations, the only environmental victories have been on behalf of the state of California. This is a new form of regulation for the new approach to liberal ideals, as described in this article about NAFTA’s impact on biotechnology, “under neo-regulation, the neoliberal state, far from withdrawing from the economy, regularly intervenes, most importantly by promoting intellectual property rights” (Otero, 28). In biotechnology, as in other areas of research, US corporations such as Monsanto dominate the playing field. Unable to produce equitable levels of development or education, the member nations of NAFTA outside of the USA are relegated to a supplementary role in this economic structure.
There is a strong incentive to label NAFTA a unique form of exploitation pursuant to the democratic ideals espoused by the United States and the recent expansion of neoliberal thinking. It would be a fallacy, however, to pretend that the ease with which Maquiladoras abuse the environment and factory workers alike represent the shining standard of an efficient economic system. The external costs of Maquiladoras which “for years have been unable to document that they are handling their hazardous waste in accordance with the law” on living standards and on the government cannot be understated (Saldana, 33). This is a direct result of economic interference, creating dangerous situations which coupled with the impotence of national government’s legal actions to limit this interference, or consequences from it, represent a significant break from any form of classical liberalism.
What is unique about the systematic exploitation of American “satellites” is the political climate leading up to the signing of this and other free trade treaties that allows the creation of such “economic zones” which yields profitable double-standards for rich countries’ businessmen while establishing cycles of debt-ridden headaches for the national governments of people exploited. Unable to enforce or enact legislation to protect themselves, environmental safeguards and humanitarian causes fall by the wayside as the ultimate goal of profit dominates decision making by political leaders and the corporations who fund their campaigns alike. The issue is not only in Maquiladoras either, as displaced Mexican farmers became forced to compete with heavily subsidised American food imports, adding strains to immigration and domestic problems. This free trade policy may help the bottom line for the richest of America, but needs some revision, at the least, to be a sustainable part of the American dream, and many would argue that the status quo is a rude awakening from that dream.

Works Cited

Bacon, David. “Displaced People.” NACLA Report on the Americas Sept. 2008: n. pag. Print.
Otero, Gerardo, and Gabriela Pechlaner. “Is Biotechnology The Answer? The Evidence From NAFTA.” NACLA Report on the Americas May 2009: n. pag. Print.
Saldana, Lori. “Tijuana’s Toxic Waters.” Report On The US-Mexican Border Nov.-Dec. 1999: n. pag. Web.

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