At the Quebec Summit of the Americas, President Bush said he wants a free-trade pact for all the Western Hemisphere modeled on the North American Free Trade Agreement. But NAFTA is a deeply flawed guide to economic integration, and especially disappointing for those in Mexico worried about the growing development gap not just between their country and the United States but also within Mexico [see Jerry W. Sanders, “Two Mexicos and Fox’s Quandary,” February 26]. Even before he took office, Mexican President Vicente Fox offered a bold program to help close this gap, but many of his more promising ideas–for regional development funds and increased infrastructure investment–have since fallen off the US-Mexico agenda. Indeed, what emerged from the Fox-Bush February meeting was a potentially new corporate bargain: opening up Mexico to US oil companies in return for regularizing Mexican migrant labor in the United States.
To stimulate thinking on an alternative agenda, The Nation invited Walter Russell Mead, a senior fellow at the Council on Foreign Relations, to offer his ideas, and we solicited responses from Jeff Faux, president of the Economic Policy Institute, and Angelo Falcón, senior policy executive at the Puerto Rican Legal Defense and Education Fund, a national civil rights organization.
WALTER RUSSELL MEAD
Vicente Fox’s election as president of Mexico may be one of the most important legacies of the North American Free Trade Agreement. But for Fox–and for the many US, Mexican and Canadian citizens who went to protest at the recent Quebec Summit of the Americas–NAFTA is unfinished business. NAFTA may have helped break the stranglehold on power of the ruling Institutional Revolutionary Party (PRI), paving the way for Fox’s election. It also may have greatly expanded trade between the United States and Mexico, linking Mexico more closely to the successful US economy.
But for all these accomplishments, NAFTA has failed to raise the living standards of most Mexicans, and it has so far failed to deliver the large-scale flow of capital Mexico needs to create jobs for the many young Mexicans entering the labor force. Real wages in Mexico are 26 percent below their 1981 levels, and dropped steadily after the inauguration of NAFTA. Hundreds of thousands of Mexicans still cross US borders each year in a desperate search for work.
Not satisfied with NAFTA as it is, Fox soon after his election offered a bold program for making NAFTA into something more like a North American economic community. Fox called for a freer flow of immigrants to the United States, generous development funds and a new multilateral approach to stopping the drug trade. Across the border in this country, these ideas were met with a dismissive silence, reflective of a fatigue born of the bitter struggles over NAFTA’s passage in 1993.
Yet it would be a mistake to turn our backs on the goal of a more prosperous and democratic Mexico or on Fox’s ideas for a new partnership. Even if his proposals in their current form are political nonstarters, there are other things the United States, Canada and Mexico can do together that would dramatically change Mexico’s economic outlook and do for Mexico what the European Union did for countries like Portugal and Spain: Give ordinary Mexicans the chance to build something like a First World standard of living.
§ Massive infrastructure investment. The first thing Mexico needs is private investment in highways, water-treatment facilities, hospitals, power plants and airports. In Europe they did this with taxes. That won’t, of course, happen here. But we can accomplish the same goal by persuading private capital to invest in Mexican infrastructure projects on a massive scale. So far, the efforts have been disappointing. Corruption makes projects more expensive than they should be, and Mexico’s poverty makes it hard to make money from infrastructure.