Mexico's 20 years of North American Free Trade Agreement: Socio-Environmental Trends and Unequal Exchange

Abstract

The North American Free Trade Agreement (NAFTA) is the most influential trade agreement, signed by the governments of USA, Canada and Mexico in 1992. It came into effect the 1st of January of 1994 promising economic growth and better employment opportunities to reduce Mexican emigration. The Zapatista Army of National Liberation (EZLN), a civil resistance movement against capitalist neo-liberalism, protested the agreement, warning that it would feed social inequalities and threaten indigenous rights, autonomy, land access and use of natural resources. The Zapatistas feared the NAFTA would reinforce a master-servant relationship where Mexican human and natural resources are displaced, undermined or employed for the benefit of USA-CAN. In this paper we use Multiregional Input-Output Analysis based on the EORA model to examine changes in the carbon, land material, water and employment footprints in Mexico derived from the NAFTA agreement. We pay particular attention to the fairness of the resource exchange between USA and Mexico. We find all the consumption-based footprints grew between the period of 1990-2015. The carbon footprint increased by 50%, land by 32%, material by 46% and water by 566%. Territorial based employment rose by 7% and consumption based employment by 14%. Consumption of land and water considerably sped up after NAFTA. Remarkably, the land footprint doubled between 1994 and 2003, whereas GDP only increased by 20%. After that peak, the changes in land footprints retracted and stabilized at a 32% yearly increase until 2015, which corresponded to a 65% increase in GDP. Carbon intensity per unit of GDP has noticeably decreased after the NAFTA, nevertheless rising consumption heavily drives carbon emissions, eating-up efficiency gains. We confirm that the unequal trade has increased after the NAFTA, with surpluses for carbon, materials and more heavily for labour -meaning Mexico has become a net source for these resources. Not so for land and water, where Mexico remains a net consumer (2) We confirm that a large portion of the increases in Mexico’s carbon, material and water are destined to satisfy USA-CAN consumption. (3) We confirm a master-servant dynamic where the employment embodied in trade leaves Mexico with a 73% surplus -a net supplier of labor among NAFTA partners.

Development of Comprehensive Evaluation Model of Free Trade Port Investment under Macroeconomic Support

“…When constructing the theoretical model of investment price fluctuation and monetary policy response of free trade ports, we need to comprehensively consider commodity prices, macromonetary control policies, and their actual influencing factors [13][14][15]. e model is an economic system including an inflation equation, currency equation, investment equation, and consumption equation.…”