Article

Nafta's Lessons: from Economic Mythology to Current Realities

Article

Nafta's Lessons: from Economic Mythology to Current Realities

If you want to read the PDF, try requesting it from the authors.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the author.

... We, on the other hand, find that NAFTA has exhibited the following effects: (1) it has been a losing proposition for workers, small and medium-sized businesses and, particularly, peasants; (2) in the United States, for the working class and portions of the middle class, and for some sectors of business, the impact of NAFTA has been negative (Cypher 2001;. At the same time, NAFTA has directly benefited a small set of interests on both sides of the border, especially U.S.-based transnational corporations (TNCs) and Mexico's largest conglomerates (or grupos). ...
... This combination of policies has given rise to a near stagnant economy when viewed from the perspective of the rate of growth of per capita income: between 1980 and 2003, per capita income increased only 0.5 percent per year. Between 1988 and 2005, the level was an unimpressive 1.4 percent per year-far below the nearly 3 percent rate achieved from 1940 to 1980 under a policy of state-led development (Cypher 1990;Dussel Peters 2006b, 77). Further exacerbating the situation, the growth in productivity in the nonmaquila manufacturing area (which includes the disguised maquilas, the source of major dynamism in this area) has failed to lift wages, as Figure 3 shows. ...
... 15 At the microeconomic level of the firm-assuming the stability of final demand for products exported from Mexico to the United States-shifting capital to Mexico to achieve labor efficiencies was a logical step in many instances. In highly oligopolized industries, such as autos, the available research indicates that the cost-saving production processes adopted in Mexico were taken as profits (Cypher 2001). In less capital-intensive industries, such as apparel, where brand identity is strong, similar profit-enhancing results should be anticipated. ...
Article
Full-text available
This article aims to reveal the precise meaning of Mexico's export platform by focusing on maquiladoras and the disguised maquila industry. In both sectors, imported components account for 75 to 90 percent of export value. As a result, benefits for the Mexican economy are basically restricted to wages, that is, the value of the labor incorporated into the exports. The authors argue that what is actually taking place is the disembodied exportation of labor or, alternatively, that the workforce is being exported without requiring Mexican workers to leave the country. The authors thus demystify the purported orientation of Mexican exports toward high-value-added manufactured goods and reveal the regressive movement of the export platform.
... Thus, the provisions of NAFTA were supposed to stimulate trade within the member countries. Cypher (2001) compared the export and import data of the U.S.-Mexico trade for the period 1993 and 1999 and concluded that the large U. S. trade deficit with Mexico was the result of the 1994-95 peso crisis in Mexico. Burfisher et al. (2001) examined trade data for the period 1980-98 between the U. S. and its NAFTA partners. ...
Article
Full-text available
Refereed Proceedings, Fifteenth Annual South Dakota International Business Conference, October 9-12, 2008, pp. 103 – 118, Copyright 2009, ISBN 1-883120 -07-1, Rapid City, South Dakota , USA. (With Andy Bertsch, Kalthom Abdullah, and Norhizan Rosli) Environmental awareness has increasingly become a global concern during this 21st century. Malaysians have begun to realize how important it is to sustain the country‘s environment. There has been an increasing concern among individuals, business organizations, societies, and estates. This study aims to understand the extent of commitment by consumers toward protecting and preserving the environment through product usage and disposal activities and to analyze how much this concern for environmental protection influences purchasing decisions. There is a need to develop guidelines for consumers and organizations on the most effective ways to protect and preserve the environment.
... Viewing the matter from the standpoint of the restructuring of the U.S. production system, a separate logic-driven by the desire to maximize profits and out-perform the competition-prevailed: Under this logic shifting capital to Mexico could enable U.S. firms to purchase labor processes at as low as 9% of the cost in the U.S., while accepting that productivity per hour might not be as high as that in the U.S. xxiv From the level of the microeconomics of the firm-assuming the stability of final demand for products exported from Mexico to the U.S.-shifting capital to Mexico to achieve "labor efficiencies" was a logical step in many instances. In highly oligopolized industries, such as autos, the available research indicates that the cost-saving production processes adopted in Mexico were taken as profits (Cypher, 2001). In less capital-intensive industries, such apparel, where brand identity is strong, similar profit-enhancing results should be anticipated. ...
Chapter
Full-text available
Mexico achieved no net gain in total investment over the NAFTA period even as DFI rose in nominal terms. The level of investment in the NAFTA era has been anemic—showing a shortfall of roughly 6% of GDP below the level achieved in 1980, for example. Thus, while on a national level the NAFTA/neoliberal strategy of export-led production which President Zedillo once termed a new “national project” failed to lift investment levels, the same policy changes did create vast new opportunities to restructure Mexico and realign relationships of dependency with regard to the US. Between January 1 1994 and July 1 2006 US corporations attained an accumulated level of investment of $114 billion, steadily accounting for one-half to three-quarters of all the DFI Mexico acquired in those years (Secretaria de Economía 2006). President Zedillo was correct in describing the new policies as a “national project”, but not for Mexico.
... First, NAFTA has been a 'losing' proposition for workers, small-and medium-sized businesses and particularly peasants in Mexico. Second for the working class and portions of the middle class, and for some sectors of business in the US, the impact of NAFTA has been negative (Cypher, 2001;Delgado-Wise, 2006). Third, NAFTA has directly benefited a small set of interests on both sides of the border, specifically numerous US-based transnational corporations (TNCs) and Mexico's largest conglomerates. ...
... 12 Desde el nivel microeconómico de la empresa, suponiendo que la demanda final para los productos exportados hacia Estados Unidos sea estable, en muchos casos desplazar capital a México buscando "economías laborales" fue un paso lógico. En las industrias altamente oligopolizadas, tales como las automotrices, la investigación disponible indica que los procesos productivos adoptados en México que ahorran costos se traducen en ganancias (Cypher, 2001). En industrias menos intensivas en capital, tales como la del vestido, donde la identidad de marca de fábrica es importante, deberían esperarse similares incrementos de ganancias. ...
Article
Full-text available
We offer an alternative theoretical formulation to the perspective that Mexico's Export-Led Model, based in the rising growth of the foreign trade sector within the Mexican economy wherein exports increasingly consist of manufactured products, has been a resounding success. We argue that the model as constructed in Mexico from 1986 onward is not actually based in the growing export of Mexican-made manufactured products, but rather in the exportation of cheap labor through the articulation and combination of three interrelated processes: a) The expansion of the maquiladora industry. b) The stimulus to the disguised maquila sector. c) The increasing emigration of millions of Mexican workers who have been excluded for the national labor market. The Cheap Labor Export Model has constituted a fundamental element in the process of industrial restructuring within the U.S. economy, beginning in the 1980s and continuing up to the moment. The form of subordinated asymmetric integration of the Mexican economy to that of the U.S. which has been brought about by the new model of Cheap Labor Export has unleashed a harsh, and ultimately unsustainable, process of disaccumulation that now makes necessary a sweeping change in economic development strategies to be pursued by Mexican policymakers.
... poniendo que la demanda final para los productos exportados hacia Estados Unidos sea estable, en muchos casos desplazar capital a México buscando "economías laborales" fue un paso lógico. En las industrias altamente oligopolizadas, tales como las automotrices, la investigación disponible indica que los procesos productivos adoptados en México que ahorran costos se traducen en ganancias (Cypher, 2001). En industrias menos intensivas en capital, tales como la del vestido, donde la identidad de marca de fábrica es importante, deberían esperarse similares incrementos de ganancias. ...
Article
Full-text available
Ha habido innumerables intentos por definir y caracterizar la tendencia actual a la internacionalización del capital, que consiste en tres movimientos simultáneos: una expansión del comercio internacional, un crecimiento de los flujos financieros internacionales y la creación de sistemas de producción internacional integrados, asociados a una tendencia a la diferenciación, precarización y transnacionalización de los mercados laborales. A ve-ces se entiende que este proceso caracteriza a la “globalización”. Sin embargo, la globalización sigue siendo un concepto elusivo, a menudo descrito caprichosamente y empleado con ligereza. Por ello en este trabajo conferimos un carácter más concreto al proceso de internacionalización acelerada mediante el examen de lo que podría considerarse como un caso paradigmático: la adopción del modelo neoliberal en México, particularmente en el contexto del Tratado de Libre Comercio de América del Norte (TLCAN). El análisis de este caso no intenta definir la “globalización”, en virtud de la carga ideológica del término. Sin embargo, al patológico proceso en cuestión no se le puede considerar una aberración o una excepción a la dinámica de la internacionalización (o “globalización”). Más bien, se deriva —y al mismo tiempo es una negación categórica— del precepto neoclásico-neoliberal que afirma que una apertura indiscriminada entre naciones bajo el “libre comercio”, generará para éstas beneficios mutuos importantes, independientemente de sus disímiles fuerzas relativas, historias, aparatos productivos y niveles de desarrollo.
... On the factory floor, efforts at organizing can be met by a threat of plant closing, relocating workers to another maquiladora factory, or by firing the informal worker and bringing in a more compliant workforce (Bronfenbrenner 2000). In the Mexican maquiladoras, the labor turnover rate per month ranges between 15 percent and 25 percent per plant, and the number of workers switching jobs each year has grown to 3.5 million (Cypher 2003;Najera 2008). ...
Article
Full-text available
This paper addresses the impacts of global “social distancing” on employers and workers and examines community-based worker center strategies to mitigate those impacts. Through a case study of El Centro Humanitario, Denver’s human rights center for immigrant day laborers, the paper addresses how community organizations can respond to social distancing by “organizing the unorganized,” and crafting strategies such as worker-owned cooperatives to promote workers’ rights while reconnecting workers to their work and to each other. JEL classification: L31, L33, P32
Article
Full-text available
ABSTRACT The 1997-98 East Asian crisis triggered a wave of neoliberal-influenced economic restructuring throughout the region. In most casesworking,people opposed this restructuring, fearing that it would produce greater inequality and poverty, higher levels of unemployment,and greater workplace insecurity. Mainstream economists and
Article
A large number of nation states throughout the globe entered into regional trade agreements (RTAs) during the 1980s and 1990s. Most observers assumed that the majority of RTAs could be understood as expressions of a single phenomenon: a widespread embrace of free trade. Uninterested in comparative questions, they made the collective turn to integration the subject of their analyses. This paper challenges this undifferentiated view of RTAs. In so doing, it produces evidence that directly speaks to current debates on globalization, the nature of markets, and the spread of neoliberalism across the world. The starting premise is that regional market building is a social endeavor, occurring in the midst of thick institutional contexts. Those contexts give rise to RTAs with remarkably different characteristics. The empirical analysis focuses on the European Union, the North American Free Trade Agreement, and Mercosur. Attention is given to the divergent evolution of law and organizations in three spheres of social life: working women, dairy products, and labor rights. The concluding section discusses additional variables shaping RTAs and venues for future research.
Article
Full-text available
The last few decades have seen a spectacular integration of the global economy through trade. The rising integration of world markets has brought with it a disintegration of the production process, however, as manufacturing or services activities done abroad are combined with those performed at home. I compare several different measures of foreign outsourcing, and argue that they have all increased since the 1970s. I also consider the implications of globalization for employment and wages of low-skilled workers, and for trade and regulatory policy, such as labor standards. 2 The last few decades have seen a spectacular integration of the global economy through trade. The share of imports (or exports) in GDP for the United States has approximately doubled in the last two decades, and if intra-OECD trade is omitted, the same is true for the OECD countries generally. Trade does remain a seemingly small fraction of U.S. GDP. This is not surprising in view of the fact that large economies...
Chapter
After the Second World War, many transnational corporations (TNCs) set up affiliates in Latin America in order to take advantage of the opportunities offered by the import substitution industrialization policies implemented by governments of the region. The strong inflows of foreign direct investment (FDI) led to the establishment of relatively large foreign companies to supply the highly protected local markets. Although many of these dominant foreign firms established highly profitable operations, they became increasingly inefficient with regard to their costs of production, rapidly obsolete in technological terms, and finally unable to withstand international competition in the local market when these economies began to open up.
Article
This article develops a model which tests the hypothesis that sectoral FDI flows from the United States to Mexico over a four-year period can be explained by the ownership advantages of US multinationals. Theoretical developments in the concept of 'ownership advantage' are used to guide the formulation of the research. The findings suggest that direct investment into US MNEs' affiliates in Mexico is driven by benefits derived from embedded human knowledge, technology-embodied advantages, and possibly from scale advantages. Local R&D is negatively associated with FDI.
Article
The NEM in Latin America radically altered foreign direct investment inflows to the region. Previously restrictive national policies became ones that facilitated foreign direct investment (FDI) in the context of new business opportunities. Transnational corporations (TNCs) took a new look at the region in the context of their evolving corporate strategies, examples being efficiency-seeking corporate strategies in the automotive (Mexico) and the apparel industry (Caribbean Basin) and the market access strategy for services in the telecommunications and electrical energy industries (Brazil). Two interrelated problems arose: (a) TNC objectives were often attained but those linked to national development goals often were not, and (b) national policies did not channel FDI to priority development activities.
NAFTA: Estimated U.S. Job Gains and Losses by State
  • Mary Jane Bolle
North America Free Trade After NAFTA
  • Robert Scott
La Autentica Contratacion Colectiva y Los Sindicatos de Proteccion
  • Z Fonte
  • Evaristo Luis
  • A Alvarez
  • Guillermo Rivera
The Impact of NAFTA on the Auto Industry in Mexico
  • O Ramírez De La
La Productividad y el Trabajo en el Contexto de la Produccion Esbelta
  • Humberto Juarez Nuñez
Mexico's Integration Strategy with North America
  • Nora Lustig