Donald Trump’s threat to impose an escalating amount of
tariffs on goods imported from Mexico was so stupid on so many levels—the
biggest one being the likely reversal of the economic stability that free trade has
brought to Mexico, which has over time to the steep decline of illegal immigration
from that country. Not that free trade has been entirely beneficial to Mexico; while
U.S. consumers have benefited from year-round fresh fruits and vegetables from
Mexico, many small farmers in Mexico have nevertheless been burned by competition from U.S.
imports and forced to go to the cities to find work. Trump’s threats on Mexican
manufacturing would throw them out of that work as well, and where would they go from
there? This just shows you how stupid Trump’s chief advisor in such matters—Stephen
Miller—really is. Trump’s complaints about the trade deficit with Mexico ignore
the fact that the U.S. has a much larger consumer base than Mexico does; the
one truly out-of-whack trade problem the U.S. has is with China, and Trump “war”
with that country apparently will only end when Trump is out of office, with
the loser being American consumers.
Despite Trump’s claims of an “invasion” and the media following along with its own hysterical headlines, illegal immigration from south of the border is still down from what it
was 20 years ago. Most migrants seeking asylum in the U.S. today are from
Central America, a region which also has the “benefit” of a free trade
agreement with the U.S., called “DR-CAFTA,” the former acronym referring to latecomer
the Dominican Republic. But CAFTA clearly has been far more beneficial to the
U.S.; in 2018 it exported $32.7 billion in product to those countries, while
importing $25.2 billion for a trade surplus of $7.5 billion. Considering the
fact that the even combined the CAFTA countries have only a fraction of the consumer
and consumer spending base as the U.S., this tends to demonstrate that free
trade has not led to increased investment and living wage job creation in
Central America, in fact quite the opposite.
Back in the “Banana Republic” days U.S. companies robbed
Central American countries blind, backed by hand-picked regimes that enforced repression
of the population and labor based on the peonage model practiced in the U.S., and when finished pillaging destroyed all infrastructure so that it could not used by the natives.
It is not all that certain that the economics have changed all that much under
CAFTA. Back in 2014, a report by Foreign Policy in Focus pointedly asserted
that “the pact has had a devastating effect on poverty, dislocation, and
environmental contamination in the region. And perhaps even worse, it’s
diminished the ability of Central American countries to protect their citizens
from corporate abuse.”
The report notes that U.S. companies have particularly abused
their power in Central American countries through the pernicious Investor-State
Dispute Settlement program, which allows such companies to overturn any local
law that affects their profits, in effect “Such lawsuits can be financially
devastating to poor countries that already struggle to provide basic services
to their people, much less engage in costly court battles with multinational
firms. They can also prevent governments from making democratically accountable
decisions in the first place, pushing them to prioritize the interests of
transnational corporations over the needs of their citizens.”
This includes U.S. interests in mining production. One-third
of the entire territory of Guatemala and Honduras is devoted to unregulated
mining, with toxic effects to the environment and the population. Countries
like El Salvador and Costa Rica, which have put up a brave face before the U.S.
foe, have been sued by U.S. companies through various international “dispute”
mechanisms to overturn environmental and labor rules in those countries. While most
of these suits have not been successful, they have cost El Salvador and Costa Rica
millions in ill-afforded dollars. When such suits are successful, the
arbitrary unfairness of them is palpable, as the Focus report notes:
TECO Guatemala
Holdings, a U.S. corporation, alleged in 2009 that Guatemala had wrongfully
interfered with its indirect subsidiary’s investment in an electricity
distribution company. Specifically, TECO charged that the government had not
protected its right to a “minimum standard of treatment”— an exceptionally
vague standard that is open to wide interpretation by the international
tribunals that rule on such cases — concerning the setting of rates by government
regulators. In other words, TECO wanted to charge higher electricity rates to
Guatemalan users than those the state deemed fair. Guatemala had to pay $21.1
million in compensatory damages and $7.5 million in legal fees, above and
beyond what it spent on its own defense.
It goes on and on. Last year, the journal Foreign Policy noted
that the U.S.—which is principally at fault for the violent street gang problem
in Central America, as it is the “incubator” of those gangs before “deporting”
the problem elsewhere—has done little to reign in its rogue corporations or
help the economies of those countries in stable job creation, which “free trade”
was supposed to do. A 2015 AFL-CIO report noted the devastation of small subsistence
farming wrought by CAFTA, not just by U.S. imports but by the shift to “corporate
plantations” to compete in the global market. Small farmers thrown out of work
have not—like they have in Mexico—been able to find anything but the lowest
paying work without any rights whatever, save to breath and work under intolerable
conditions. The government of Honduras has been remarkably complicit in this;
in 2013 its so-called Supreme Court allowed a law that gave foreign
corporations sovereign control over all territory their businesses were
situated on.
Thus it is no “coincidence” that the large migrations from
Central America began in earnest since the CAFTA agreement promulgated during
the Bush administration. The U.S.’ failure to reign-in abusive U.S.
corporations and insure that native workers are provided living wages, and the continuing
U.S. policy of deporting U.S.-nurtured gangs to ravage communities and drive
out small businesses, is the principle reason for the so-called “invasion.” The
U.S. needs to come to its senses and realizes that it is not its own interests to continue to overlook its culpability in a border “crisis” largely
of its own making. This “crisis”—which
began in 1965 with an immigration law which for the first time put a cap on
legal immigration from Latin America, and the 1986 law which “criminalized”
undocumented labor—will not only continue but become worse if the U.S.
criminally turns its back on what it has wrought.
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