NAFTA Plunges 20M Mexicans into Poverty: Report

Mexico's so-called “prosperity” under the North American Free Trade Agreement, NAFTA, over the past 23 years has actually seen a shocking 20 million people fall into poverty in the country, according to a report by the Center for Economic and Policy Research, CEPR.

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While Mexico and NAFTA have both been convenient punching bags for right-wing nationalist politicians in the U.S. like President Donald Trump, the Mexican working class and campesinos have been forced to pay a devastating social cost for the free trade deal.

According to the CEPR, Mexican poverty has risen since the deal's implementation in 1994 as economic growth and real wages stagnated while nearly 5 million family farmers were displaced, propelling Mexico's poor toward migration to the United States — crucial drivers of social instability and unrest.

“From 1994 to 2000, the annual number of Mexicans emigrating to the United States soared by 79 percent. The number of Mexican-born residents living in the United States more than doubled from 4.5 million in 1990 to 9.4 million in 2000,” the report stated.

In a press statement, economist and CEPR Co-Director Mark Weisbrot said, "As the U.S. and Mexico consider renegotiating NAFTA, there should be a serious discussion of what went wrong for Mexico, as well as for the United States."

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The report also illustrates how globalization has virtually pitted Mexico against China for access to the U.S. import market, placing Mexico at a disadvantage due to Beijing's intervention in the economy. China's central authorities still reserve the right to take measures to stabilize currency markets and the banking sector, while Mexico's banking system is largely foreign owned.

“Many people think that since American workers lost out from NAFTA, Mexicans must have benefited, but the data show that this is not true,” Weisbrot said.

The report comes as Mexican officials continue to consider measures if the Trump administration makes good on threats to impose 20 percent tariffs on Mexican products, launching a trade war that could have devastating repercussions on both countries.