This article was first published at The McAlvany Intelligence Advisor on Monday, September 8, 2014:
In her promo for her article titled “America’s Car Capital Will Soon Be … Mexico,” which appeared in Forbes on Monday, Joann Muller claimed that “wise trade policies south of the border have quickly created the global auto industry’s factory floor” and wondered rhetorically if Washington was listening or watching to learn Mexico’s lesson. She wrote:
Seemingly overnight, Mexico’s automotive output has soared, bolstered by a flood of investment from foreign-based carmakers, including Nissan, Honda, Volkswagen, and Mazda. With $19 billion in new investment, production has doubled in the past five years to an estimated 3.2 million vehicles in 2014.
And it’s all because of NAFTA, she claims:
The North American Free Trade Agreement (NAFTA) in 1994 stimulated … investment by the major automakers. Now they are installing state-of-the-art technology in Mexico on par with their plants in the US and Canada….
In recent weeks Infiniti, Mercedes-Benz, and BMW have all detailed plans to build cars in Mexico. Hyundai-Kia is expected to announce a plant any day. Audi, meanwhile, is midway through construction of a $1.3 billion factory that will build luxury SUVs in Mexico starting in 2016.
Currently the world’s eighth largest auto producer, Mexico is on pace to surpass Brazil this year. By 2020 Mexico should be number six behind China, the US, Japan, India, and Germany, with annual production of 4.7 million vehicles.
Nissan, she claims, is expecting to build 1 million cars a year in Mexico within the next five years. Volkswagen operates their second-most productive plant in the world in Mexico, with its own fire department, security services, fleet of ambulances, health clinics, banks, and a currency exchange, along with nine cafeterias serving 12,500 meals every day.
The only trouble is, the auto-making boom isn’t having much of an effect on Mexico overall. According to Kimberly Amedeo, an expert on American-Mexican economic relations, writing in About News, thanks to NAFTA, Mexico has lost 1.3 million farm jobs. This was confirmed by Laura Carlsen, writing in the New York Times. At present, she says, some 20 million Mexicans live in “food poverty.” Translation: 25% of the population does not have access to basic nutrition and 1/5 of Mexican children suffer from malnutrition. Carlsen goes on to point out that this has put tremendous pressure on America’s southern border as jobless Mexicans have migrated to the United States at the unprecedented rate of about a half million a year since NAFTA was implemented in 1994.
All of which has resulted in the country’s annual per capita growth averaging just over 1%, one of the lowest in the hemisphere. Since NAFTA was implemented, real wages have declined and unemployment is up.
But the real story that Muller missed is that NAFTA never had anything to do with trade or tariffs or employment. It was not about trade at all but about politics. During the debates running up to the January 1, 1994 implementation of NAFTA, libertarian economist Murray Rothbard saw immediately through the façade, noting:
On the surface, NAFTA dealt with a few puny tariffs covering a small fraction of American trade. So why the fuss and feathers? Why did the Clinton administration pull out all the stops, throwing caution to the winds by openly and shamelessly buying congressional votes?
And why the coming together of the entire establishment: Democrats, Republicans, Big Business, Big Finance, Big Media, ex-Presidents and Secretaries of State, including the ubiquitous Henry Kissinger, and the last but surely not least Big Economists and Nobel Laureates? What is going on here?
It was indeed not about trade, certainly not about “free” trade.… The fight was about foreign policy, about the globalist policy that the United States has been pursuing since Woodrow Wilson, and certainly since World War II. It was about the Establishment-Keynesian dream of a New World Order. NAFTA was a vital step down the road to that order.
According to Rothbard, NAFTA was a fraud from the very beginning: “In the first place, genuine free trade doesn’t require a treaty or a trade agreement. NAFTA is called a trade agreement so it can avoid the constitutional requirement of approval by two-thirds of the Senate. If the establishment truly wants free trade, all it has to do is to repeal all the numerous tariffs, import quotas, antidumping laws, and other American imposed restrictions on trade. No foreign policy or foreign maneuvering is needed.”
Just a year ago this week, the New American magazine published an extensive exposé of NAFTA titled “How The Free Trade Agenda Is Knocking Down America,” and Larry Greenley, one of the contributors to the report wrote:
Our nation has already experienced incremental losses of independence through its participation in the North American Free Trade Agreement. Not only has the economic integration stemming from the NAFTA agreement included NAFTA tribunals that are superior to the US Supreme Court in cases involving North American trade, but furthermore, NAFTA has provided a platform for initial steps in the political integration of the United States with Mexico and Canada, which is commonly referred to as building the North American Union (NAU).
Bill Jasper, another contributor to TNA’s report, pointed out that “The planet is quietly being divided up into regional blocs ruled by an unelected and unaccountable cabal, and with the destruction of national sovereignty in Europe almost complete, the only serious force left that can stop the scheme appears to be the American people.” The only trouble is, articles like those appearing in Forbes touting the alleged benefits of NAFTA but failing to give the background or telling the rest of the story fail to inform the American public of the impending dangers to their liberties.
If Muller had spent just a little time on the political ramifications of NAFTA rather than all of her time singing its alleged praises, she would have learned its real purpose: to create an economic entity that would lead ultimately and inevitably to political union, overriding national sovereignty of the three countries involved. She would’ve discovered, for example, that Robert Pastor, professor of international relations at American University and longtime supporter and promoter of NAFTA, knew exactly what he was doing in promoting this so-called “trade agreement.” For example, Pastor wrote in Foreign Affairs, the Journal of the Council on Foreign Relations: “NAFTA was merely the first draft of an economic Constitution for North America.” Had she dug a little deeper, she would’ve learned that six years later Pastor was disappointed that that so-called first draft didn’t go far enough:
In the absence of a compelling vision to define a modern regional entity, and lacking institutions to translate that vision into politic[al reality], the old patterns of behavior among the three governments [the US, Canada and Mexico] remained.
Muller, then, fails to inform when she leaves out critical elements like these. To claim that NAFTA is responsible for the growth in the auto business in Mexico without explaining why it has had so little impact on the economy in general is to tell only part of the story. To leave out entirely any mention of the machinations of those seeking to build a New World Order, one step at a time, leads one to recall what Alfred Lord Tennyson so adroitly said: “A lie which is half a truth is ever the blackest of lies.” NAFTA has precious little to do with trying to improve trade relations but everything to do with taking the next step toward the creation of a New World Order run by unelected elites.
The New York Times: Under Nafta, Mexico Suffered, and the United States Felt Its Pain