Topic: 4: NAFTA & US hegemony: Canada and Mexico (Kit: Quintero-Ramírez; Mize,
R.L.; Pantaleo, K; Wise, C. ; Wise. T.A.; Abboushi, S.)
WST
• Financial Meltdown (2008)
• Trade liberalization (Neoliberalism)
• Continental Commodification
The Wonderful World of NAFTA (Part 1, 2) - 2007
http://www.youtube.com/watch?v=ZnVL0d9fwkY 7min p1
http://www.youtube.com/watch?v=XxQQael1ueE 7 min p2
NEED TO KNOW | After NAFTA | PBS 13.57 min
http://www.youtube.com/watch?v=mSXmB_my0ls 0c1 2011
Thesis: Under U.S. hegemony, NAFTA has integrated Canada and Mexico into a
continental free-trade system. As a result, Canada’ s raw materials are exploited
for reconstructing the declining U.S. global hegemony. As a result of US-led 2008
financial meltdown, workers face a sharply depressed job market in a deindustrialized Canada barely buffeted by the welfare system.
In contrast, Mexican cheap, but skilled and surplus labour is exploited for
restructuring the industrial sector in the U.S. The failure of the US financial system
has worsened the unemployment of the Mexican workers intensifying their poverty
as they have no welfare system.
Both, Mexican and Canadian economies, have become dependent on the U.S. through
the commodity chain of exploitation.
Peripheries: NAFTA
Periphery: Mexico
Semi-periphery: Canada
Arguments you need to integrate in the essay:
1. Wise T. A.(2011): Hegemony and dumping
NAFTA + U.S. Farm Subsidies Devastates Mexican Agriculture 2010
https://www.youtube.com/watch?v=N4KRd7Qjyys 8 min
1. Abboushi, S (2010):
• US trading power, US disregard for agreements, land-ownership
structure vs. strategy of acquisition; and Managed (not Free) trade
3. Quintero Ramirez (2002)
• NAFTA deindustrialized & depressed labour conditions in Canada and
exploits workers in Mexico
4. Susan George: WTO is ineffective
http://www.youtube.com/watch?v=NQ952ba75Yk you tube uploaded May 5,
2011)
5. Wise, R.D & Cypher, J.M (2007).
Cheap-labor embodied Mexican exports but not achieving new high-value added
production or specialization.
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Source: The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current
Economic Integration, THE ANNALS OF THE AMERICAN ACADEMY, March 2007
6. Carol Wise (2009):
Regional market integration of US, Canada and Mexico has been superseded by
China’s use of NAFTA to facilitate its entry into US through Mexico
7. Gandasegui, M.A (2006) Kit #17:
Using its hegemony, US wants to gain advantages over 4 areas in making trade
agreements with each country in LAm :
 Government contracts
 Pharmaceutical markets
 Agricultural markets
 Intellectual property (GRAIN 2004).
8. Katherine Pantaleo (2010).
The murders as gendered sexual serial killings primarily perpetuated and caused
by:NAFTA, Gender issues & Corruption of the criminal justice system.
NAFTA's Ultimate Effect on Mexico P1 of 2 2010 april 9.29 min murder city Charles
bowden
http://www.youtube.com/watch?v=WSrOAfMylAs
NAFTA's Ultimate Effect on Mexico P2 of 2
http://www.youtube.com/watch?v=nokmc36jnOI 7 min
9. Cormier & Targ (2001)
• Globalization led to workers’ poverty & global income inequality
(Cormier , D & Targ, H, (2001) Globalization And The North American Worker. Labor
Studies Journal, Spring 2001 v26 i1 p42 )
How does NAFTA de-industrialize & depress labour conditions in Canada and
exploit workers in Mexico?
(Quintero Ramirez: 2002)
By:
• Reducing the number of full-time jobs
• Subcontracting work outside the plant
• Increase of part-time workers
• Piecework outsourced to home work
Core: NAFTA & US (as Core):
• Power of the US: Neoliberalism is imposed on Mexico and Canada
• Impact of US financial boom-bust cycles affect their trade balances.
Semi periphery and Periphery:
• Continental commodification of Canada’s (semi periphery) and
Mexico’s (Periphery) raw materials
• http://www.slideshare.net/MariaRey/nafta-may-18-2011-rey 1-40 slides
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Driving force of Global market integration: (Cormier & Targ: 2001)
•
Neoliberalism (NL) deregulate commercial activity.
Liberalize trade, open for foreign investments. Deregulate
finance/currency, privatize the economy, ensure private property
protection
Why should Canada and Mexico adopt NL?
• US’s enforcement: How?
• By integrating Canada and Mexico through NAFTA
• As requirements of loans: WB, IMF & SAP
Feb 2010: UNCTAD’s new economic report shows that neoliberal policies have
negatively affected the countries that were forced to follow them
Why does Mexico as a peripheral country bow to American hegemony
IMF requires each country to balance export vs. import payment in trade. It lends
money to bridge the gap (imports minus exports) and imposes the rules of
neoliberalism (LAPDoGS) on the borrowing country.
Core: NAFTA & US (as Core):
• Power of the US: Neoliberalism is imposed on Mexico and Canada
• Impact of US financial boom-bust cycles affect their trade balances.
Semi periphery and Periphery:
• Continental commodification of Canada’s (semi periphery) and
Mexico’s (Periphery) raw materials
WST: US’s commodification of Canadian and Mexican raw materials: How?
1. Continentalization of the 3 economies
• Corporatization of production in NAFTA countries
• Continental expansion of US’s MNCs
•
Continental enforcement of neoliberalism
2. FT
• FT-terms favourable to the US
• GCC & Continental commodity chain
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Global Integration by trade agreements in
Table 1
• US vs. European Union (EU).
• European U: Sovereign states may resist
global integration because it would mean
surrendering national control on economic
policies
• CU allows greater bargaining power
between trading nations
• FTA may appeal to small states as exporters
need to adjust only to block standards not to
global standards.
WST: Continentalization of the three economies & US (Core’s)hegemony:
Mexico (periphery) and Canada (semi-periphery) are integrated through NAFTA
• Favourable terms of trade for the US (unequal exchange)
• US disregards WTO’s decisions
FT: Continental commodification of Canada’s (semi periphery) and Mexico’s
(Periphery) raw materials
• US power within NAFTA leads to the continental commodification
Under the US hegemonic power Mexico and Canada abide by the US strategies.
How does a hegemon in a trade block make gains?
• Political influence
• Terms-of-trade (TOT)
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•
•
Discrimination against non-members
Greater influence over multilateral trade negotiations
Impact of Neoliberal Trade Policies:
UNDP Human Development Report 2004 :
• 46 countries’ people are poorer today than
in 1990
• Liberalization and privatization restrict countries’ supply of basic
services
• WB conditionality undermines local
service industries that
cannot compete with
trans-national service corporations
http://www.un-ngls.org/cso/cso5/cfmm2004statement.pdf
UN
•
•
•
•
Economic and Social Council, 2000: committee on human rights reports:
Most global trade is controlled by multinational enterprises
Trade and commerce have serious human rights implications
WTO: gender insensitive
Patents for genetically engineered species
– economic high-jacking.
http://www.unhchr.ch/Huridocda/Huridoca.nsf/(Symbol)/E.CN.4.Sub.2.2000.1
3.En?Opendocument
.
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WST: US’s commodification of Canadian and Mexican raw materials: How?
1. Continentalization of the 3 economies
• Corporatization of production in NAFTA countries
• Continental expansion of US’s MNCs
•
Continental enforcement of neoliberalism
2. FT
• FT-terms favourable to the US
• GCC & Continental commodity chain
Ciccantell (2001): NAFTA: an institutional framework of integrating raw
materials
Why was U.S. interested in NAFTA?
• US raw materials supply systems
were declining
• To access cheap labour and to gain new markets
Name a resource that is expensive today:
oil & gas
e.g.: oil price increases of 1973-74 led to 1979-80 decline of U.S. economic
competitiveness
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Core: NAFTA & US :
1. Problems of U.S. & its MNCs:
How did they solve insecure supplies of the raw materials ?
Canada’s & Mexico’s oil, natural gas, and other natural resources
2. Why was US interested in these supplies?
To reduce for U.S. MNCs’ cost of
production to advance their profit
& competitiveness.
Core: NAFTA & US (cont’d):
3. Core-Periphery unequal exchange continues under hegemonic FT rules:
FT ensures:
• Cheap access to heaviest, bulkiest, and largest volume raw materials
• Monopolistic (MNCs) extraction peripheries’ raw materials at low
costs
What is ‘Direct foreign investment’?
branch plants -- central mechanisms of core economies' control over their raw
materials in peripheries
Limit processing to certain refineries:
physical relationship tightly links many extractive peripheries to particular core
firms
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h p://revista.amec.com.mx/num_7_2004/Peter_Kresl.htm
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Quintero Ramirez (2002): How does NAFTA de-industrialize & depress labour
conditions in Canada and exploit workers in Mexico?
In Canada: by
• Reducing the number of full-time jobs
• Subcontracting work outside the plant –affects jobs:
- increase of part-time workers
- piecework
- outsourced to home work
Quintero Ramirez (cont’d)
In Mexico:
•
average of 70 hrs. per week without overtime pay - no health
insurance, no benefits
•
violation of the Employment Standards by employers – workers
received no compensation under the Workplace Safety Act
•
no welfare or UI (unemployment insurance)
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NAFTA benefits the capital investors but workers lose jobs: Source: G & M
Feb. 15, 2008, p.A18.(editorial)
• Trade Area 440 mil people
• 1993-2006: $15 Trillion (value of goods and services produced)
• Economies grew by :
U.S.
50%
Canada
54%
Mexico
46%
• NAFTA partners’ total trade /a minute
$1.7 million (worth)
Source: G & M
Feb. 15, 2008, p.A18.(editorial)
The Wonderful World of Nafta
http://www.youtube.com/watch?v=ZnVL0d9fwkY 7 min (the wonderful World
of Nafta 1/2)
http://www.youtube.com/watch?v=XxQQael1ueE (2/2)
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Does Canada control its own sovereignty, taxation and borrowing?
Yes, but:
• U.S. hegemony
It ensures that its huge sunk capital in raw materials, overpowers Canada’s
claims to sovereignty
Pre 9/11: What % of Canadians were ‘continentalists’?
Two thirds
What is hegemony?
Arrighi (2004):
When a state uses its economic, political, military and cultural power to control a
group of sovereign states.
Core: NAFTA & US :Ciccantell, P. (2001)
1. Problems of U.S. & its MNCs:
How did they solve insecure supplies of the raw materials ? Ciccantell, P.
(2001).
Canada’s & Mexico’s oil, natural gas, and other natural resources
2. Why was US interested in these supplies?
To reduce MNCs’ cost of production for U.S. to advance their
competitiveness.
(Ciccantell, P (2001). NAFTA and the Reconstruction of U.S. Hegemony: The Raw
Materials Foundations of Economic competitiveness. (Statistical Data Included) ,
Canadian Journal of Sociology, Winter 2001 v26: 1, p57)
Core: NAFTA & US (cont’d):
3. What does US as a hegemon want to monopolize trade in the world?
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Cheap access to heaviest, bulkiest, and largest volume of raw
materials
• Maintain its hegemony to extract raw materials at low costs from the
peripheries.
WST explains Core’s Globalization agenda & its consequences to the peripheries
Expansion of US Hegemony: (read: Ciccantell, P: 2001)
• Enforced uniformity in development
• Hegemonic control over technologies
• Unsuitable, costly & centralized solutions
• Lack of locally effective problem solving
•
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Peripheries: NAFTA
Periphery: Mexico
Semi-periphery: Canada
1. Wise T. A.(2011): Hegemony and dumping
2. Abboushi, S (2010):
• US trading power, US disregard for agreements,
land-ownership structure vs. strategy of
acquisition; and Managed (not Free) trade
3. Quintero Ramirez (2002)
• NAFTA deindustrialized & depressed labour
conditions in Canada and exploits workers in
Mexico
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