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NAFTA: The Cause of Immigration

by James Weber

Immigration exploded into the forefront of national debate in early 2006, bringing with it calls for immigration reform, massive marches across the country, and a lot of tension between immigrant and resident communities. The main focus was on Mexican immigrants, who either were "stealing" American jobs or filling jobs no one else wanted, depending on who was asked.

In order to better understand why Mexicans came to the U.S. in the first place, I traveled to a rural part of Mexico in August of 2006. This area, Apan, in the state of Hidalgo, sends - by the estimate of the City Counselor Marco de la Peña - up to 2,000 people each year to the United States, many of them to Indiana. I began to realize that a lot of immigration from Mexico to the United States is the result of economic implications of the North American Free Trade Agreement (NAFTA). NAFTA has not met its originally stated goals, and while it has created some wealth on both sides of the border, this increased wealth actually leads to increased immigration. Mexico and the United States need to develop a guest worker program to allow people to move more freely across the border in order to balance the movement of trade and goods across the border.

NAFTA, enacted in 1994, was the culmination of several years of talks between Canada, the United States, and Mexico. The agreement laid out a plan to improve "virtually all aspects of doing business within North America." The agreement focuses on ending tariffs, expanding copyright protection, and encouraging cross-border investment. ("Welcome to ONIA"). I will be focusing on the implications of the agreement on the relationship between the U.S. and Mexico, as Canada has not been a major factor in immigration.

Immigration to the United States from Mexico is not a new phenomenon, but rather has been happening for over 100 years, and has not always been the result of an actual move by the Mexicans. "The first Mexicans to become part of the United States never crossed any border. Instead, the border crossed them." (Immigration... Mexican) The Mexican-American war resulted in most of what is now the southwest United States being taken by the U.S., meaning all the Mexicans living there became U.S. residents. From 1910-1930, immigration from Mexico increased drastically due to a poor economy in Mexico, followed by a period of intolerance directed towards Mexican immigrants. When the U.S. entered World War II, many U.S. workers were involved in the war effort, so Mexicans flocked to farms to fill the void there. When the war was over, the immigrants were no longer needed, and experienced a lot of racism towards them. (Immigration... Mexican) In other words, Mexicans are welcome when the U.S. economy needs them to fill vital jobs, but when they are no longer seen as a vital part, they are no longer a welcome part of the communities they belong to in the U.S..

Another important immigration trend to understand is that new immigrants to the United States - with the exception of the African slaves - are not accepted with open arms. The previous immigrants, once they have assimilated into the culture, claim that the country does not have room for more people. (Sassen 31) An example of this phenomenon is evident in Senator Rick Santorum's campaign advertisement, "Candles," which starts with a statement of Santorum's immigrant roots. It then argues that immigrants today are different, and should not be allowed in as easily.

Other politicians are also making a big deal about immigration, and the public is reacting. From January 1 to October 12, 2006, the White House released over seven thousand separate references to immigration, many of them coming from the president himself ("Google Search"). In April of 2006, a CNN poll showed that almost ninety percent of people in the U.S. saw immigration as a major election issue, and 1 in 7 people were planning to vote solely on a candidate's stance on immigration. Google Trends, which examines trends in searches as well as usage in news media, shows a large spike of interest in immigration in early 2006 that has continued to be higher than the past several years.

The ideas laid out in NAFTA may have been well-intentioned, but several problems have caused them to not work as expected. One fundamental flaw in NAFTA is how labor is treated as a separate type of commodity than capitol, information, and services, which are allowed to flow freely. NAFTA removes state control of these commodities while immigration policy is left up to each country. This creates a misbalance, allowing jobs and goods to relocate, but not allowing people to follow. (Sassen 7).

In 1993, Carlos Salinas de Gortari, the Mexican president projected that NAFTA would help curb emigration from Mexico to the U.S. However, many independent economists think that immigration to the U.S. is a vital yet unspoken part of the Mexican government's economic plan (Payne 51). A Mexican will benefit the Mexican economy more if they are working in the United States than if they stay at home, because of the massive amounts of money immigrants send home. In 1995, 10% of Mexicans lived in the U.S., and collectively sent 2 billion dollars home to Mexico (Payne 52). By 2005, $18 billion was sent to families in Mexico from immigrants elsewhere (Musser). Antonio Muñoz, the owner of one of the two large factories in Apan, said, "If… those people hadn't sent money to Apan, I don't know what would have become of Apan. I think it would be a ghost town. There's something to eat, there's something moving, and that's because of the money that arrives here." The money sent home by immigrants is crucial to the stability of the Mexican economy.

An original claim by proponents of NAFTA was that it would reduce immigration. Both of the then-presidents of Mexico and the U.S., Carlos Salinas and George Bush, claimed that an increase of jobs in Mexico, brought about by NAFTA, would decrease the desire for Mexicans to emigrate. However, as people earn more money, they are able to afford the costs of hiring a guide and obtaining fake identification. People who were not able to pay the high costs associated with immigration - one Mexican immigrant I talked to who is now living in Elkhart, Indiana, paid $4,000 to emigrate - are more likely to be able to afford it now. Rothstein observes that immigrants are rarely the poorest people; they usually are educated and are looking to go farther than they are able to in Mexico. Currently, workers in the United States, on average, get seven times as much as someone working in Mexico. As that ratio gets closer to equal, more and more Mexicans will be able to afford immigration, until a turning point where staying in Mexico is as financially rewarding as emigrating. However, a U.S. government estimates the equalization of wages may take several generations. (Rothstein 65)

On the northern side of the border, higher standards of living also are a pull factor, causing Mexicans to immigrate. As the U.S. economy grew in the mid-90's, so did the desire of Americans to eat healthier. Healthier foods such as broccoli, cauliflower, and lettuce actually take more work, since their production has not yet been mechanized. This necessitates the use of cheap labor, found in immigrants. Studies show that as American wealth increases, so does their need for immigrants to maintain that level of wealth. (Rothstein 70)

Because of changes to the Mexican constitution and a reduction of subsidies, Mexico has moved from an agrarian society to more industrial. According to a 2003 Chicago Times article by Hugh Dellios, rural areas of the country that have relied on farming have not been helped by NAFTA, and the implications of tariffs and subsidies being removed has been to the detriment of many small farmers. Between 1993, the year before NAFTA was signed, and 2003, a third of Mexican hog producers shut down due to a doubling of the imported pork from the United States. Mexican farmers have a hard time competing with U.S. farmers, who get $7 billion annually in federal subsidies. (Dellios 52) This will lead to a mass exodus from farms, likely to Mexican cities, and to the U.S., as one million Mexican peasants are predicted to give up farming each year for the next 10 to 20 years (Rothstein 66).

NAFTA has also not caused the massive investment into the Mexican economy by U.S. companies that was expected. Investment by U.S. companies in Mexican companies is only one percent of what is being invested into the U.S. companies. (Griswold 58). Another major provision of NAFTA was the creation of Maquiladoras, factories that are tariff-free and were supposed to provide major employment on both sides of the border. However, almost a quarter of the Maquiladoras that sprung up in the wake of NAFTA have shut down in the last six years. (Smith 70). The manufacturing jobs that were created by NAFTA do not provide stable employment and can not promise a future of employment.

NAFTA is generally held in a positive light by many for the jobs it has created and how it has helped the economies of areas both north and south of the border. However, most of the benefits of NAFTA have gone to creating more wealth for the already wealthy. In Mexico, twenty percent of the population holds fifty-four percent of the wealth, leaving less than half of the country's wealth for the remaining eighty percent. (Payne 52). NAFTA also has not been proven to have any effect on the U.S. economy (Griswold 55), and some even say it has compounded the trade problems that have been plaguing the U.S. for several years (Hawkins 63).

Earlier, I mentioned the plight of pork producers in Mexico attempting to compete against larger U.S. pork producers. This near monopoly occurred despite tariffs on pork entering Mexico from the U.S. However, a provision of NAFTA states that as of 2008, most tariffs will be lifted, effectively removing barriers "that have helped to exclude U.S. goods from the other two markets, especially Mexico" ("Welcome to ONIA"). What will happen to the remaining pork producers in Mexico? The workers who no longer have jobs in the industry will not benefit from cheaper pork coming into Mexico. Before we implement the 2008 NAFTA rules, we should carefully examine whether this will be beneficial in light of what has been learned in the last 12 years.

Another feasible step to limit the damage done by NAFTA would be to allow workers to follow jobs and money. As early as 2004, President Bush was proposing a guest worker program that would create a pathway for Mexicans to come legally to work in the United States. In a speech to Mexican ambassador Tony Garza and Hispanic rights groups on January 7, 2004, Bush said that the guest worker program must not compromise border safety, must help meet the economic needs of the U.S. and mustensure that workers do not overstay their visas. However, in almost three years since this speech, no guest worker program has been created, although Bush continues to promote the idea. It is an option that seems to benefit everyone involved. It allows workers whose jobs have been displaced to follow the workflow, while ensuring that they have the ability to live safely in society. It also ensures that taxes are paid to the correct municipalities and states.

NAFTA has caused immigration from Mexico to the United States to rise due to its economic policies, including the allowance of unequal and unfair subsidization of goods. It has hurt Mexico's economy overall, and even when it does help individuals monetarily, this only encourages immigration. Steps must be taken by the U.S. government to allow workers from Mexico in order to compensate for the free flow of jobs and trade.

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Copyright 2007 James N. Weber