How do Free Trade Agreements Cause Migration?
What is a Free Trade Agreement?
A free trade agreement (FTA) is an agreement between two or more countries to remove barriers, like quotas and import taxes, on goods that are made in one country and sold in another. One example is the 1994 North American Free Trade Agreement (NAFTA). The U.S. has signed other Free Trade Agreements (some examples include the Central American Free Trade Agreement and FTAs with Bahrain and Singapore), and is negotiating others (including the Free Trade Area of the Americas and FTAs with Malaysia and Thailand).
What impact has NAFTA had on Mexican workers?
Under NAFTA, Mexico was forced to drop barriers that kept corn grown in the U.S. from being imported to Mexico. The U.S. subsidizes corn farmers, so they can sell corn more cheaply than Mexican farmers can. The price Mexican farmers got for their corn dropped by 70 percent. In the ten years after NAFTA, the value of the Mexican minimum wage dropped by 20 percent. The percentage of Mexicans living in poverty also increased after NAFTA.
What impact has NAFTA had on U.S. workers?
In the US, more than 879,000 jobs disappeared since NAFTA took effect, and when these laid-off workers find new jobs, they earn an average of 23 percent less than at their old jobs. Since NAFTA, two-thirds of manufacturing and communications corporations faced with union organizing threatened to take the jobs abroad. Small farmers have gone out of business at more than six times the pre-NAFTA rate.
How does this cause migration?
In Mexico and the U.S., workers who lose their jobs, and farmers who lose their farms, have to find other work. For many workers this means moving to a place with more jobs or higher wages. The number of Mexican migrants to the U.S. had dropped 18 percent in the three years before NAFTA, but increased by 61 percent in the first eight years after NAFTA.
Are there other Free Trade Agreements?
NAFTA is one example of free trade agreements that have done more harm than good to countries' populations involved. The US has signed other Free Trade agreements at a regional level: FTAA, ASEAN Initiative, NAFTA, MEFTA, APEC, and CAFTA-DR.
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