What Does The Trans Pacific Partnership Mean For Mexico?

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Originally posted on MexResorts.com

The Trans-Pacific Partnership (TPP) is a controversial new trade bill. In Mexico, where “free trade” agreements have been historically destructive, the uncertainty over the implications of TPP has stirred up much discussion. A lot of analysis regarding TPP has focused on another bill, implemented 21 years ago, and its effects on relations between the US and Mexico.

The North American Free Trade Agreement went into effect in 1994 and worked to cut tariffs and changed the rules of trade between the US, Mexico and Canada.  The bill was signed by US president Bill Clinton, Mexican president Carlos Salinas and Canadian prime minister Jean Chrétien.  The final parts of the deal were implemented by the beginning of 2008. Import tariffs in agriculture, textiles and automobiles were decreased, with NAFTA also focusing on intellectual property protections.

In their report on the effects of NAFTA, Gary Hufbauer and Jeffrey Schott of the pro-trade Peterson Institute for International Economics in Washington stated  the United States “gained” 100,000 jobs per year from 19933 to 2003, yet they cannot say for sure this is all due to NAFTA.  Peterson researchers conjectured in 2005 that NAFTA had increased US economic output by 7.3%.

But others see this differently, such as Public Citizen, a Washington-based consumer advocacy group, which estimates that 1 million jobs have been lost because of NAFTA. A Small trade surplus in the US became a trade deficit of $177 billion as goods from Mexico and Canada crossed the border.  For sure some have lost their jobs, as, according to the White House, 2.2 million American workers have received federal money or retraining since 1974 after losing jobs due to trade-related issues.

The true effects of NAFTA are vague,  with the number of manufacturing workers having fallen this century from 15 million to 13 million, though factories are at 85% output (with a slight dip during recession years). Better technology allowed industry to continue to function despite the loss of some jobs.

“According to the U.S. Bureau of Labor Statistics, two out of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them taking a pay cut of greater than 20%,” Public Citizen said.

Trans Pacific Partnership

The House approved the first sections of the TPP, enabling the administration to negotiate the TPP with fast-track authority. TPP “covers” trade relations among Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Japan, the United States and Vietnam.

There has been critique of TPP due to its secretive nature, as well its restrictive intellectual property (IP) law interpretations.  WikiLeaks leaked drafts of the agreement show that TPP has free speech implications, as well as implications for privacy and due process. The leaked documents show US negotiators championing copyright measures that are more restrictive than those currently required by international treaties, including the controversial Anti-Counterfeiting Trade Agreement (ACTA).

The TPP draft means other countries must adopt US DMCA Internet laws, sacrificing Internet users’ expression and privacy protections in countries outside the US. Other vague parts in the TPP create issues for journalists and whistleblowers who could face harsh criminal punishments for revealing information considered confidential.  The bill also seeks to expand copyright terms protection from life of the author + 50 years to Life + 70 years for works by individuals, and 95 years after publication or 120 years after the creation for corporate owned works.

NAFTA Backlash

At Naftas’ 20th anniversary, most of the U.S. people were in favor of “leaving” or “renegotiating” the trade agreement.  Since the agreement went into effect in 1994, the nation’s annual per capita growth flat-lined to just 1.2 percent. Real wages declined and unemployment has increased.

With US corn and other staples flowing into Mexico, prices dropped and small farmers were unable to make a living, with approximately two million having left their farms since Nafta. Consumer food prices, however, increased, including the price of the tortilla. Not all of Mexico’s problems can be attributed to Nafta, to be sure.

The day Nafta went into effect on January 1, 1994, the Zapatista National Liberation Army and people of Chiapas declared war on the Mexican government, claiming that Nafta would destroy Mexico.  The Zapatistas took control of five major towns in Chiapas with an army of men and women.  As Zapatista Subcomandante Marcos said in the 1990s in the documentary Zapatista:

We are creating a general profile of what civil Zapatistas could look like, taking the essentials of armed Zapatismo to recognize not taking power, not wanting to hold public office. And the struggle continues for democracy, freedom and justice, and demanding that the government place itself at the service of society, to change the relationship in Mexican society between rulers and the ruled.

According to Professor Peter Rosset, “The Zapatistas control about a third of the territory of the state of Chiapas, which they organized into five autonomous regions.” As he notes, the Zapatistas have constructed an alternative form of autonomous self-government in parts of Chiapas over the past 20 years.  As Comandante Zebedeo said at the time:

“We have never had these rights—freedom of expression, the right to organize, the freedom to set prices of our produce. When we produce something, it is the buyer who sets the price of our product, and that is where the exploitation begins. They pay us as little as one peso for our products, but don’t consider the work and sacrifice which we make in the bulk and the weight of our work. And this costs us work. It costs us hunger. It costs us the little money we have invested there. And when it doesn’t produce, when it does not bear fruit, we don’t benefit. Others benefit, and the true workers remain the same, with their arms crossed and their land exploited.”

In a very small area in the southeast of Mexico, Zapatistas have created an alternative system, with a rotating government, an education system, healthcare, production cooperatives and societies and a legal system. As Comandante Hortensia said:

Now is the time to strengthen and globalize the resistance and the rebellion, because we know that these lying thieves and criminals who call themselves the government will never stop attacking us. They will never stop persecuting us. They will never stop incarcerating us and trying to put an end to us and erase us from history. But they will not be able to, because our struggle has its just cause: democracy, liberty and justice. From Caracol II in Oventic, Resistance and Rebellion for Humanity, the high zone of Chiapas, January 1st, 2014.

The controversy surrounding TPP is palpable. Dr. Gary Kohls said the bill is “the most secretive, anti-democracy, pro-corporate legislation since the Patriot Act and Homeland Security Acts.” Nobody in Congress has actually read either of those bills.  Nevertheless, reports about some benefits to Mexico exist, including that the deal should double Mexico exports to Japan, a very closed market, in five years. The TPP could cover 40% of the global economy.

Deputy Trade Minister Francisco de Rosenzweig has aid that Mexico’s focus in the final stretch of TPP are to maintain privileges with the US, where three-quarters of the country’s exports go.

“Without a doubt, our priority is to strengthen our productive framework with the United States and preserve our preferential trade status that we have under NAFTA,” de Rosenzweig said.

“Our second priority is to have a strong presence in Southeast Asia as well as access to the agricultural market in Japan.”

There will be many implications for the Mexican people and economy should TPP pass,  affecting the Internet, trade and even media. To be sure, the full effects cannot be known due to the bill’s secretive nature. The 12 countries, which make up 40% of the global economy and that are to be a part of the TPP, will have to adopt similar regimes, taking away from each countries autonomy, and this includes Mexico.