NAFTA’s Impact on Mexico
In 1994, the North American Free Trade Agreement (NAFTA) came into effect between Mexico, Canada and the U.S. The Sierra Club opposed NAFTA at the time because we were concerned that the environmental provisions in the agreement would not adequately protect the environment or the health of our families and communities. Fifteen years later, NAFTA has created a legacy where corporate profits are promoted at the expense of environmental safeguards, health protections, and workers’ rights. While NAFTA’s impacts have been felt in all three countries, Mexico has been most negatively affected.
Increased Pollution and Decreased Wages
NAFTA was initially publicized as the best way to bring economic development – as well as environmental improvement – to Mexico. Neither of these promises have come true. Under NAFTA, the vast majority of investments into Mexico were in maquiladora factories: export-oriented manufacturing and assembly plants that return profits to the U.S. and other investor-based countries and do not promote direct economic development within Mexico. Over 2700 maquiladoras were constructed along the already environmentally-strained and overpopulated border region between Mexico and the United States.1 The overcrowded cities and towns associated with these maquiladoras continually struggle to meet basic sewage and waste disposal needs, resulting in a hepatitis A infection rate more than double the Mexican average.2 The increase in trade has also meant an increase in traffic and the accompanying air pollution. In the border town of Ciudad Juarez, between 1997 and 2001, over 36,000 children were rushed to emergency rooms due to breathing problems. This high level of air pollution was also shown to contribute significantly to deaths among children under age 5. 3 Toxins created by the maquiladora factories are leaking into the land and water at alarming rates. According to Mexican government figures, the cost of NAFTA-related environmental damage in 1999 alone was an estimated $47 billion. It is likely that annual pollution damages from 1989 to 1999 exceeded $36 billion per year. This damage dwarfs the value of economic growth from trade, which was only $14 billion per year. 4 Despite an anticipated rise in pollution levels, NAFTA did nothing to strengthen Mexico’s environmental protections. In fact, enforcement of environmental protections declined noticeably after NAFTA, and is often ignored by both corporations and the Mexican government. For example: While Mexican law requires that hazardous waste created by foreign-owned factories in the maquila zone be shipped back to the country of origin for treatment, only 12% of 8 million tons of hazardous waste receives adequate treatment, and only 30% is returned to the country of origin.5 Total environmental inspections plummeted by 45% after 1993, and inspections in the maquila zone decreased by 37%.6 In a recent survey of maquiladora managers, 45% said that they were dissatisfied with the availability of environmental training and 50 to 70% of respondents indicated that they were not rewarded or given financial incentives for environmental improvement, demonstrating the lack of importance given to environmental protection among corporations operating in the maquiladora sector. 7 Although spending on environmental protection in Mexico grew between 1988 and 1993, it fell by nearly half between 1994 and 1999. The cost of environmental damage has averaged 10% of the Mexican GDP since 1999, equivalent to $64.7 billion dollars in 2004, whereas spending for environmental protection amounted to 0.6% of GDP, or 4.1 million dollars. Investment in environmental protection would need to be 14.6 times greater to keep up with the level of degradation and natural resource destruction.8 For workers in Mexico’s manufacturing sector, NAFTA did not improve working and living conditions. Wages and purchasing power have fallen for most Mexicans over the past fifteen...
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