The North American Free Trade Agreement (or NAFTA) is a treaty that facilitates free trade between its signatory nations Canada, The United States, and Mexico. When signed in 1993 (going into effect January 1st 1994) it was heralded as a way to bring greater economic prosperity to all three nations involved in the agreement by way of eliminating tariffs on trade and other encumbrances to trade between the three nations. For the purposes of this policy discussion we will focus on the relationship between the U.S. and Mexico within the wider North American free trade zone.
The idea behind NAFTA, as it pertains to the U.S. and Mexico, is that with the
elimination of trade barriers between the two nations (amongst other stipulations of the agreement), Mexico’s economy would benefit from increased trade with the U.S. and that the U.S. economy would benefit from cheaper imported products.
Maquiladora’s established on the Mexican side of the U.S./Mexico border import, duty free, machinery, equipment and primary goods from the U.S., produce secondary goods and then export these secondary goods back to the U.S. This, in theory was to increase employment on the Mexican side of the U.S./Mexico border region while providing U.S. consumers with cheaper products because of the cheaper labor used to produce said products.
Indeed trade did increase. According to Gretel C. Kovach of The New York Times (citing the U.S. Chamber of Commerce), there was $81 billion in trade between the U.S. and Mexico in 1993, while that number ballooned to $332 billion in 2006 (Kavach).
Although NAFTA opened up U.S. borders to Mexican exports, it also opened up Mexican borders to U.S. exports. U.S. agricultural exports would explode onto the Mexican market. The United States subsidizes a litany of different agricultural commodities, and as such these commodities are more competitive than their Mexican counterparts. This has had the effect of driving small Mexican farmers from rural areas into cities because they simply can not compete with U.S. subsidized wheat, grain, corn, rice etc. This has been a boon for U.S. agro-business conglomerates, and a detriment to small Mexican farmers. This is one example of an unforeseen negative externality of NAFTA; but not the only one.
Another externality caused simply by virtue of the increase in trade between the two nations, is the increase in traffic on the U.S. Mexican border; specifically international trucking. According to an article submitted to the Congressional record in 1997 by House member Marcia Kaptur (D-OH 9), there were 1.9 million trucks that crossed the U.S./Mexico border in 1993 before NAFTA was signed. In 1994 however (the year NAFTA went into effect), that number burgeoned to 2.8 million (U.S. House of Representatives, 2007). This incredible increase in international trucking is attributed to NAFTA. According to Agustin De La Rosa of the Texas Department of Transportation, that number had grown to 4.76 million trucks in 2007 (Rosa, 2007). This shows a steady growth in the number of trucks crossing the border annually.
The problem with this is that as legal international trucking grows over time, the likelihood of catching smugglers that use traditional access points on the border drops inversely. The reason for this is that there are only a finite amount of trucks that can be inspected in a day. However many that number is, it remains constant. Even if new trucking routes are established, those routes will only be able to be inspected a finite amount of times in a day also. In fact the United States only inspects %5 of all Imported containers according to the National Border Patrol Counsel (U.S. House of Representatives, 2007). This is an issue that will become more and more serious as time goes on. As shown above, the amount of trade between the U.S. and Mexico is steadily increasing along with the amount of transportation of goods that facilitates it.
This problem is directly related to the Mexican Drug War. In that same article submitted to the congressional record by Rep. Marcia Kaptur (D-OH9)
“Drugs are a multibillion-dollar industry for cartels in Latin America. The National Drug Intelligence Center conservatively estimates more than $108 billion roughly equal to the combined gross domestic product of Ecuador and Guatemala in drugs comes into the U.S. yearly. The U.S. Drug Enforcement Administration puts the figure at $142 billion in drug trade just between the U.S. and Mexico. Other estimates soar even higher. (U.S. House of Representatives, 2007).”
This is indicative of the reality that it is getting harder and harder for the U.S. to fight it’s War on Drugs and for Mexico to fight its Drug War as time goes on. With the increase of legal traffic and the decrease of the ability to inspect traffic that comes along with that, comes the simultaneous increase in the power of drug traffickers to smuggle drugs into the U.S. and money and guns (which are used by drug cartels in Mexico to fight their side of the Drug War) into Mexico; increasing their power and decreasing the legitimate power of both governments to enforce the law in their states.
NAFTA, as stated above, has also caused the unemployment of many small Mexican farmers. These farmers go to the cities to find work and not all of them can find it. This is creating, essentially, a labor force that the drug cartels can easily take advantage of. These farmers and the other people that make up the wider farm economy are economically displaced by NAFTA policy, and the alternative of becoming a part of the drug economy becomes more attractive when the legal economy cannot support them. NAFTA is having the effect of increasing the ability of drug traffickers to produce and smuggle drugs across the U.S. Mexico border.
That increased ability to smuggle has ramifications further than the sphere of drug policy enforcement. The ability to traffic humans across the border is also increased by the increase in legal trade traffic across the U.S./Mexican border. This has ramifications that go beyond that of immigration. Both the United States and Mexico have laws against trafficking humans. According to Eric Green, of BestandWorst.com, between 600,000 and 800,000 people are trafficked across borders each year globally (Green, 2007). Also according to him 17,000 of those persons are trafficked across the U.S./Mexico border every year (Green, 2007). These persons are trafficked for the purposes of sex slavery, and involuntary labor as well as illegal immigration purposes. As it becomes harder to control the flow of traffic between the U.S. and Mexico it also becomes harder to stop the trafficking in humans across the border.
These two issues are problems that the United States and Mexico both face currently. But as stated before these problems of law enforcement stem from the increase in trade between the two countries as a consequence of NAFTA and an inability to monitor it. A problem that both countries may face in the future is the problem of pirated material and drugs from Asia and their smuggling across the border from Mexico into the U.S.
The article that Marcia Kaptur submitted to the congressional record states,
“Now, the Mexican Government is working very hard to build a four-lane highway which they call La Entrada al Pacifico, the Entrance from the Pacific. And the idea there would be to redirect so much of the traffic from Asia, from China, these big ships that are bound for the United States, from the west coast, Ports of Los Angeles and Oakland, further south, and stretch the actual shipping lanes into Mexico versus the United States. It is estimated that as much as 30 percent of the truck traffic will also be diverted from California and El Paso to the ports of entry at Presidio.
The idea is that the highway into our country would begin further south where goods would come in in deepwater ports, and the completed route would save up to 4 shipping days for goods moving between the Pacific Rim countries and Texas, which would be one of the major ports of entry into our country. (U.S. House of Representatives)”
These goods could be contraband of any sort. The report goes on to state “Contraband can be anything from narcotics, pirated videos, humans or weapons of mass destruction," (U.S. House of Representatives, 2007). The increase of trade that would occur because of a shift of imports to Mexico could further deteriorate the ability of both nations, the U.S. and Mexico, to enforce the law at the U.S./Mexico border.
We can now understand that the increase in trade between the two economies of the U.S. and Mexico presents a serious problem for law enforcement (actual enforcement of laws as opposed to peace keepers). The trucks that cross the border bringing Mexico U.S. goods, and the U.S. Mexican goods can bring anything, and the increase in that trade inversely brings a decrease in law enforcement capacity.
As we can see, the issue of enforcing laws related to cross border transport is a problem both countries face today. According to Reuters writer Arshad Mohammed,
“Washington plans to ramp up border security with a $184 million program to add 360 security agents to border posts and step up searches for smuggled drugs, guns and cash.
The Obama administration will spend $725 million to modernize border crossings and provide about $80 million to help Mexico purchase Black Hawk helicopters, (Mohammed, 2009)”
citing Hillary Clinton. Additionally, Sen. Joseph Lieberman (I-CT), according to the same article is seeking an additional $385 million to hire and equip 1,600 new Border Patrol agents and upgrade their facilities (Mohammed, 2009). This is in combination with $300 million that the U.S. has set aside for drug aid set to reach Mexico and South America. According to the Associated Press, the Obama administration has recently enacted a $95 million dollar program set to increase the inspection of southbound traffic across the U.S. Mexican border in order to stem the smuggling of guns and cash back to drug traffickers (Associated Press, 2009).
On the Mexican side of the border, according to Reuters writer Arshad Mohammed, Filipe Calderon’s government has spent $6.4 billion fighting the Drug War since December 2006. Additionally deploying 45,000 troops to places around the country (Mohammed, 2009).
The overall policy, as it seems, centers on the defeat of drug cartels in Mexico by attempting to deprive them of the cash that they recruit with, the guns they fight with and the drugs that they are funded with. This policy, although required, does not address the issue of cross border transportation and the weakening ability of both nations to monitor it. It is essentially an engagement of the purveyors of contraband across the border.
Even if the increased efforts on the U.S. side increase border inspections %300, the number of inspected vehicles would still only be %15 percent of total current volume. Additionally, if a %10 increase in inspections, coupled with the increase in spending by the Calderon government actually were to topple the drug cartels, that would still not address the issue of an inability to truly monitor cross border transportation.
An alternate policy proposed by isolationists in the U.S. involves the restricting of cross border traffic. The Benefit of this idea is that it would address the actual problem of monitoring of international trucking in that the fewer vehicles allowed through the border the higher the percentage of them can be inspected. Although this addresses the problem, it presents both states with larger problems. To restrict trade between the U.S. and Mexico would only harm legal and illegal shipping between the U.S. and Mexico but at the same time there are many Mexican immigrants that, although coming here illegally, are coming here because of societal and economic reasons. The fact that there are factors at play that influence the decision of these people wont go away with and would be exacerbated by the loss of trade that Mexico would sustain. The illegal immigrant would still come through the desert and would be put at risk because of the taking away of the option of traditional access to the U.S. additionally it would cost the U.S. government more money in border patrol of non-traditional access points to the U.S. in addition to the simultaneous loss in trade. Additionally this option may violate NAFTA’s 11th chapter making it difficult to implement.
A third alternative, although dependant on technology and not policy, could involve the tracking of all international trucking through GPS in order to monitor where trucks have been and where they are going. As almost all international trucking is linked to commerce, the companies whose goods are being shipped, and where they are being shipped to could be where the U.S. and Mexico could focus efforts to stop contraband from crossing the border region without having to check more trucks. Essentially if the business that is shipping goods is suspected to be a part of an illegal operation (this information can be gathered through traditional intelligence elements currently in place) then that shipment can be monitored more closely and effectively through the GPS network and law enforcement officers in the jurisdiction in which the truck is. This essentially allows for the current law enforcement infrastructure to be modified in order to address the problem of monitoring cross border transport. Free trade would still exist and a large obstacle to the enforcement of laws at the border would be overcome. The obverse of this solution is that international trucking is not the only sort of cross border transport and this plan does nothing to address other problems with law enforcement at the border.
We have only examined three policy alternatives here but there are others. The world is full of policy ideas. Spending more money on a system that addresses the belligerents as opposed to their ability to be belligerent while inspecting more traffic going both ways may be a viable option but it will keep both nations fighting against belligerents in perpetuity. Restricting cross boarder transport seems like an extreme and unwieldy solution but could be the basis for a reworking of NAFTA in order to address the problem of the enforcement of transport laws at the border. The use of GPS in order to track international trucking seems like an answer but doesn’t address the entire problem of monitoring other forms of cross border transport.
Both nations have an interest in monitoring and securing the border. The Mexican Government has an interest in stopping the violence associated with smuggling cartels and the U.S. has an interest in stopping the flow of drugs across the border. The issue of monitoring and controlling the shipment of contraband across the border must be addressed by whatever policy is adopted because it is not just a problem with drug policy implementation, human rights, or contraband of any sort. All of these are problems that fall under the umbrella of solving the negative externality that NAFTA has created.
Works Cited
Associated Press. (2009, May 15). Some cash, few guns found in southbound checks. Retrieved May 29, 2009, from Forbes.com: http://www.forbes.com/feeds/ap/2009/05/15/ap6428888.html
Green, E. (2007, April 26). THE US - MEXICO BORDER, HUMAN TRAFFICKING AND SEX SLAVERY? Retrieved May 29, 2009, from BestandWorst.com: http://www.bestandworst.com/v/114330.htm
KOVACH, G. C. (2007, September 9). For Mexican Trucks, a Road Into the U.S. Retrieved May 29, 2009, from The New York Times: http://www.nytimes.com/2007/09/09/us/09truck.html
Mohammed, A. (2009, March 25). U.S. to blame for much of Mexico violence: Clinton. Retrieved March 29, 2009, from Reuters: http://www.reuters.com/article/topNews/idUSTRE52O5RF20090325?sp=true
Rosa, A. D. (2007). Update on Texas/Mexico Border Activities. Texas Department of Transportation, Government and Public Affairs office. Austin: International Relations Office.
U.S. House of Representatives. (2007). NAFTA And the Drug Trade. U.S. House of Representatives. U.S. house of Representatives.
