NACTI Aff – MNDI DM
Plan(s)
1ac – plan
The United States federal government should propose the creation of a North American Court
on Trade and Investment for the United States and Mexico, staffed by a permanent tribunal with
members from both countries, to resolve interstate and investor-state trade disputes under
Chapters 11, 14, 19, and 20 of the North American Free Trade Agreement.
NAFTA Advantage
1ac NAFTA
Advantage ____ is NAFTA
Trade disputes within NAFTA are currently handled by ad hoc
tribunals, which undermine the agreement’s credibility
Pastor 11 – (Robert Pastor, former US national security advisor and writer on foreign affairs) “North American Idea: A Vision
of a Continental Future.” 2011 p. 196 http://site.ebrary.com/lib/umich/Doc?id=10480770&ppg=219
NAFTA established four distinct dispute-settlement
mechanisms to deal with problems related to investments, trade remedies, finance, and higher-level trade issues. Chapter 11
Permanent Tribunal for Trade and Investment Disputes.
of NAFTA provides assurances that a firm’s investment would not be expropriated without prompt, adequate, and effective
compensation. While it was mainly intended to reassure foreign investors in Mexico, it has been
used against all three countries and in ways that no one had contemplated. The most controversial cases involved
firms protesting new environmental rules that were judged “tantamount to expropriation.” In subsequent free-trade agreements
with Chile and Central America, the United States revised the wording so as to preclude any effect on environmental or health
policies. 42 The three governments should sign a memorandum of agreement that would make NAFTA consistent on this matter
with the newer agreements. Chapter 19 was intended to prevent arbitrary, protectionist use of U.S. trade
laws, and although it set a limit of 315 days for completion of panel proceedings, the average length has been nearly twice that, and
the United States has been reluctant to accept any rulings against it. The most notorious case involved softwood lumber “where the United States stalled cases interminably and Canadians eventually were forced to pay $1 billion to settle
legal cases they had won before bi-national panels and in U.S. courts.” 43 That $1 billion went to lawyers’ fees and nongovernmental
organizations connected to the forestry companies and the George W. Bush administration. This has left a very bad taste in the
mouths of Canadians. The current ad hoc dispute-settlement mechanisms rely on temporary panelists
that are increasingly likely to have a conflict of interest since many of the panelists have used their past
experience to bring cases to the courts. Moreover, it is not possible to establish precedents or build
any institutional memory if one uses an ad hoc mechanism. The three North American leaders
should therefore establish a Permanent Tribunal for Trade and Investment Disputes and fold the other dispute mechanisms into it.
A Permanent Tribunal should prevent the three governments from gaming the system and
eroding the region’s confidence in NAFTA. The World Trade Organization (WTO) has
established such a permanent court, and it is functioning very effectively. It’s time to apply it to
North America.
NAFTA integration risks failure now – hurts US and Mexican
economic competitiveness
Peters, 09 – Enrique Dussel, professor at the Graduate School of Economics, Universidad Nacional Autónoma de México (“Manufacturing
Competitiveness: Toward a Regional Development Agenda,” The Future of North American Trade Policy: Lessons from NAFTA, Pardee Center,
November 2009, http://www.ase.tufts.edu/gdae/Pubs/rp/PardeeNAFTACh2PetersManufNov09.pdf)
First, Mexico´s manufacturing share in GDP has fallen constantly since the end of the 1980s , from
levels above 23 percent to levels below 19 percent in the last quarter of 2008 (and since 2001). In terms of formal permanent employment, the
from 1994 to March 2009 manufacturing´s share of total formal and
permanent employment fell from 33 to 26 percent. Since its peak in October 2000, the sector
lost 1.04 million permanent jobs through March 2009—or 25 percent. In the recent economic crisis,
manufacturing has been hit particularly hard, suffering 59 percent of the country’s total
employment losses from October 2008 to March 2009. Weakening Integration Second, the integration process within
NAFTA, and concretely between Mexico and the United States, has been weakening steadily since
2000. From a Mexican perspective, the share of trade with the United States fell from levels above 86 percent
in the 1990s to 73 percent in 2008. In manufacturing the fall has been more substantial, with
Mexico’s share of U.S. manufacturing imports dropping from levels above 80 percent in the 1990s to
45 percent in November 2008. Similarly, as measured by the Grubel-Lloyd Index that calculates the percent of trade that is within industries,
intra-industry trade (at the four-digit level of the Harmonized Tariff System) reached its highest level in 1998 with 48
percent and fell since then to levels below 43 percent. This trend is a clear indicator of declining
conditions have been harsher:
economic integration between Mexico and the United States. Dependence on the U.S. Third, these tendencies have been evident in
value chains that are of particular regional importance—yarn-textile-garments, electronics, and auto parts-automobiles. The current global crisis has
taken a heavy toll on these industries. In automobiles, for example, it is very possible that only one or two of the Big Three U.S. auto companies—GM,
Chrysler and Ford—will survive the crisis. Mexico´s auto parts-automobile industry is highly dependent on these three firms, since they account for
almost 60 percent of total auto parts and automobile production. New Competitiveness Finally, it is worth remembering that during the period 1994–
2000, the implementation of NAFTA helped the auto parts-automobiles, electronics, and yarntextilegarments industries restructure. In both the United
States and Mexico, this increasing integration contributed to new competitiveness in North America to better compete with Asia. Causes and Effects A
number of factors contribute to these trends. NAFTA made the auto, electronics, and garment industries more dynamic. Yet the dynamism was largely
cut off from the broader economy because the firms in this sector tended to ignore Mexico as a source of inputs or markets, preferring to import the
majority of its inputs and export the majority of its output. Thus, much of Mexico’s domestic manufacturing sector was hollowed out. This was a result
of certain preferential programs in Mexico that favored importing inputs, a persistently overvalued exchange rate due to Mexico’s tight monetary
policy, and low tariffs under NAFTA. NAFTA’s investment and intellectual property rules also made it difficult to pursue East Asian-like policies to
enhance industrial competitiveness (though it is not clear the Mexican government would have used such policies if they had the space to do so).
China’s accession to the WTO accentuated these forces. Mexico’s exchange rate became even more overvalued relative to competitors (China) in the
U.S. market. These factors, in addition to the preference toward imports in national programs and in NAFTA, made importing all more important.
More importantly, those sectors that experienced dynamism from 1994 to 2000 began to lose competitiveness in the U.S. market with respect to
Manufacturing sectors in all three NAFTA countries are in a deep crisis, a crisis which has
been growing since the end of the 1990s. More worrisome than the short term is probably the
medium- and long-term state of the sector in terms of its competitiveness in Mexico and in the
U.S. market, particularly in comparison with China and the rest of Asia.
China.5
Competitiveness prevents great power war – and economic
perception is key
Baru 9 - Visiting Professor at the Lee Kuan Yew School of Public Policy in Singapore (Sanjaya,
“Year of the power shift?,”
http://www.india-seminar.com/2009/593/593_sanjaya_baru.htm
There is no doubt that economics alone will not determine the balance of global power, but there is no doubt either that economics
has come to matter for more.¶ The management of the economy, and of the treasury, has been a vital aspect of statecraft from time
immemorial. Kautilya’s Arthashastra says, ‘From the strength of the treasury the army is born. …men without wealth do not attain
their objectives even after hundreds of trials… Only through wealth can material gains be acquired, as elephants (wild) can be
captured only by elephants (tamed)… A state with depleted resources, even if acquired, becomes only a liability.’4 Hence,
economic policies and performance do have strategic consequences.5¶ In the modern era, the idea that
strong economic performance is the foundation of power was argued most persuasively by historian Paul Kennedy. ‘Victory (in war),’
Kennedy claimed, ‘has repeatedly gone to the side with more flourishing productive base.’6 Drawing attention to the
interrelationships between economic wealth, technological innovation, and the ability of states
to efficiently mobilize economic and technological resources for power projection and national
defence, Kennedy argued that nations that were able to better combine military and economic
strength scored over others.¶ ‘The fact remains,’ Kennedy argued, ‘that all of the major shifts in the world’s
military-power balance have followed alterations in the productive balances; and further, that the
rising and falling of the various empires and states in the international system has been
confirmed by the outcomes of the major Great Power wars, where victory has always gone to the side with the
greatest material resources.’7¶ In Kennedy’s view the geopolitical consequences of an economic crisis or even
decline would be transmitted through a nation’s inability to find adequate financial resources to
simultaneously sustain economic growth and military power – the classic ‘guns vs butter’ dilemma.¶ Apart
from such fiscal disempowerment of the state, economic under-performance would also reduce a nation’s attraction as a market, a
source of capital and technology, and as a ‘knowledge power’. As power shifted from Europe to America, so did the knowledge base
of the global economy. As China’s power rises, so does its profile as a ‘knowledge economy’.¶ Impressed by such arguments the China
Academy of Social Sciences developed the concept of Comprehensive National Power (CNP) to get China’s political and military
leadership to focus more clearly on economic and technological performance than on military power alone in its quest for Great
Power status.8¶ While China’s impressive economic performance and the consequent rise in China’s global profile has forced
strategic analysts to acknowledge this link, the recovery of the US economy in the 1990s had reduced the appeal of the Kennedy
thesis in Washington DC. We must expect a revival of interest in Kennedy’s arguments in the current context.¶ A historian of power
who took Kennedy seriously, Niall Ferguson, has helped keep the focus on the geopolitical implications of economic performance. In
his masterly survey of the role of finance in the projection of state power, Ferguson defines the ‘square of power’ as the tax
bureaucracy, the parliament, the national debt and the central bank. These four institutions of ‘fiscal empowerment’ of the state
enable nations to project power by mobilizing and deploying financial resources to that end.9 ¶ Ferguson shows how vital
sound economic management is to strategic policy and national power. More recently, Ferguson has been
drawing a parallel between the role of debt and financial crises in the decline of the Ottoman and Soviet empires and that of the
United States of America. In an early comment on the present financial crisis, Ferguson wrote:¶ ‘We are indeed living through a
global shift in the balance of power very similar to that which occurred in the 1870s. This is the story of how an over-extended
empire sought to cope with an external debt crisis by selling off revenue streams to foreign investors. The empire that suffered these
setbacks in the 1870s was the Ottoman empire. Today it is the US… It remains to be seen how quickly today’s
financial shift will be followed by a comparable geopolitical shift in favour of the new export and
energy empires of the east. Suffice to say that the historical analogy does not bode well for
America’s quasi-imperial network of bases and allies across the Middle East and Asia. Debtor
empires sooner or later have to do more than just sell shares to satisfy their creditors. …as in the 1870s the balance of financial
power is shifting. Then, the move was from the ancient Oriental empires (not only the Ottoman but also the Persian and Chinese) to
Western Europe. Today the shift is from the US – and other western financial centres – to the autocracies of the Middle East and
East Asia.’10 ¶ An economic or financial crisis may not trigger the decline of an empire. It can certainly speed up a process already
underway. In the case of the Soviet Union the financial crunch caused by the Afghan war came on top of years of economic underperformance and the loss of political legitimacy of the Soviet state. In a democratic society like the United States the political
legitimacy of the state is constantly renewed through periodic elections. Thus, the election of Barack Obama may serve to renew the
legitimacy of the state and by doing so enable the state to undertake measures that restore health to the economy. This the Soviet
state was unable to do under Gorbachev even though he repudiated the Brezhnev legacy and distanced himself from it.¶ Hence, one
must not become an economic determinist and historic parallels need not always be relevant. Politics can intervene and offer
solutions. Political economy and politics, in the form of Keynesian economics and the ‘New Deal’, did intervene to
influence the geopolitical implications of the Great Depression. Whether they will do so once
again in today’s America remains to be seen.
Mexican economic decline spills over to the US and collapses antinarcotics effects and stability
Council on Hemisphere Affairs 9 (independent research and information organization established to promote
the common interests of the hemisphere, raise the visibility of regional affairs and increase the importance of the inter-American
relationship, as well as encourage the formulation of rational and constructive U.S. policies towards Latin America) “As Mexico’s
Problems Mount: The Impact of the Economic Recession on Migration Patterns from Mexico: A COHA Analysis” March 5, 2009
<http://www.commondreams.org/newswire/2009/03/05-3>
Implications for Mexico and the United States Evidently, through migration, remittances, and NAFTA-induced trade integration,
the Mexican economy has become increasingly dependent upon that of the United States, making the
former extremely vulnerable to the effects of the current financial crisis. The decrease in migration flows and remittances is thus
implicit in the current debate about Mexico's descent into being a "failed state." A Mexican economic collapse, spurred by
would weaken the state's
capacity to finance counter-narcotics activity, increase pay-rolls to prevent political and military officials from
corruption related to drug trafficking, recuperate the depressed economy, and keep their best and brightest at
home. These series of developments would have a negative consequence for the United States
economy and the Obama administration, as well. Mexico is the United States' third largest export market, and
the cheap labor that Mexican immigrants provide, although not nearly as coveted given the current recession, is
an important part of the national economy. Additionally, Mexico's potential economic and military collapse
deserves to be viewed as a national security threat to the U.S., given the spread of drug-related violence to
a decrease in the migrants and remittances upon which the country' s economy is reliant,
border states such as Arizona, where authorities blame a rise in home invasions and kidnappings on organized crime from south of
the border.
That turns Mexico into a failed state
Brad MacDonald, 1-29-2009; columnist for The Trumpet; Mexico: Bordering on Collapse;
http://www.thetrumpet.com/?q=5887.4259.0.0
First,
Mexico’s economy, which is tied closely to the American economy, is being hit hard by the global
economic crisis. Economic growth is slowing, the peso appears unstable and has devalued by about 20
percent since the beginning of 2008, less cash is flowing from America into Mexico, and, perhaps most dangerously, unemployment
is rising, which ultimately leads to a disgruntled, restless society. In addition to those economic woes, oil revenues, which comprise
40 percent of the federal budget, will soon begin to plummet. In short, the Mexican economy verges on collapse! Second,
Mexico’s political landscape is shifting and steadily growing more unstable. “Mexico has seen a massive spike in crime and drugrelated violence coincide with the first eight years of rule by Calderón’s National Action Party (pan),” Stratfor reported. “To make
things worse, the global financial crisis has begun to impact Mexico … and the impact on employment could be devastating. Given
the confluence of events, it is almost guaranteed that Calderón and the pan will suffer political losses going forward, weakening the
party’s ability to move forward with decisive action” (Dec. 9, 2008). Stratfor concluded its analysis with a warning similar to the one
issued by the American government: Mexico’s most critical challenge is the convergence of events it now faces. The
downturn
in the economy, the political dynamics or the deteriorating security situation, each on its own,
might not pose an insurmountable problem for Mexico. What could prove insurmountable is the
confluence of all three, which now appears to be in the making. Perhaps it’s difficult for Americans to replace
the images of Mexico’s white, sandy beaches, deluxe hotels and bright, cheap tropical fruit with images of a failed state. Try this.
Think about Pakistan. Nestled between the Middle East and Asia, it can be much easier to consider Pakistan in those terms.
Its economy is tanking and unemployment is growing. Infrastructure
is crumbling, and social unrest and
dissatisfaction are seething. Handicapped by political gridlock, Pakistan’s central government is
weak and ineffective. It has lost control over large swaths of territory, and is now unable to make
major decisions, enact legislation and implement a united foreign policy. In short, the nation cannot set
itself back on the path to success. Worse still, Pakistan’s government has been deeply infiltrated by radical Islamists who wield
significant influence over the nation’s military and intelligence departments. Entire regions of Pakistan are now controlled by radical
Islamic groups, which, blinded by their religious aspirations, have little desire to ensure people are fed, create jobs, stimulate an
economy or guarantee social stability, thereby exacerbating the nation’s spiral toward disaster. Now take it one step further.
Pakistan’s internal chaos makes it a national security threat to adjacent states, and even the
world. The terrorist attacks last November in Mumbai, India, you might remember, were traced back to radical Islamists
operating out of Pakistan. In Pakistan, chaos reigns supreme. Finally, imagine if Pakistan was situated
on America’s southern border!
This would destabilize Latin America and cause regional war
Tobin 2006 (Rick, TAO Emergency Management Consulting, “THE COMING CIVIL WAR IN
MEXICO”, 4-29, http://www.ricktobin.com/papers/thecomingcivilwarinmexico.pdf)
In a fast moving State of War in Mexico, the U.S. government would have to declare neutrality and seal its
borders immediately. Within days, the President and Congress would take actions that would be condemned by every country in the
world…and of course the U.N. The map on the next page shows the 100-mile buffer zone that would be taken by force by the U.S. military. This would become the new no-man’s
zone. Military exchanges would occur between the U.S. and Mexico along the new boundary. After a number of air losses and ground losses, the Mexican government would
withdraw and accept the boundary. Every Mexican citizen that remained there would have to carry dual identification at all times. The entire area would be sealed so that traffic
of any kind would be highly restricted and monitored. Martial law would be in place with open “shoot-to-kill” orders. At the “old” border, anyone attempting to cross illegally
would be shot. The border would be surveilled by the same flying drones now used over Afghanistan and Iraq. They would also be armed with Hellfire missiles. In addition,
particularly well-known pathways would be mined and re-mined weekly. In the United States the order would be given to round up all undocumented aliens with Mexican
heritage for immediate deportation to the “no-man’s zone.” Those who resisted would be arrested and held in internment camps at abandoned military bases until they could be
processed (under the Rex 84 Program and supporting Executive Orders such as 11051 and 11002, etc). A permanent marking would be placed on the hands of those so interned
(or a RFID chip). If they were found back in the United States they would face felony imprisonment. An underground railroad would develop to move illegal Mexican aliens to
the U.S. would take the oil fields and nationalize
them for the U.S. Again, this would raise the threat of intense hostilities, leading to new alliance in the
Western Hemisphere. Canada would become a neutral party and no longer support NAFTA or trade with
the U.S., including cutting water, electrical and petroleum exports. The Latin American countries might
unite as a block and form a powerful alliance with a strong socialist, anti- American focus, led by the triad
of Mexico, Cuba, and Venezuela. Later, Brazil would join to make the fourth major power. The United States federal
Canada. The U.S. would then demand that if Pemex products were interrupted for even a day,
government would now face the existence of threats that included unfriendly border neighbors to the north and south, a declining world position, and internal strife with its own
citizens, especially those with Mexican heritage or Latin America links.
Independently, ensuring NAFTA’s symbolic success is key to
American global leadership
Agrasoy, 4 - Bachelor of Arts degree in International Trade and a Bachelor of Science degree in Management Information
Systems from Bogazici University in Istanbul, Turkey, where he specialized in international trade and investment, Master of Arts in
Economics from McGill University in Montreal, ROI Research Analyst Director of Operations, Public Sector, overseeing worldwide
public sector operations at ROI (Emre, “NAFTA: as a Means of an U.S. Hegemony Creation in the Region?” May 23 2004,
http://emreagrasoy.awardspace.com/nafta.pdf)
Although U.S.
seemed the sole dominant power after the collapse of Soviet Union, U.S. envisaged that some
areas of influence 2 would have a huge potential to challenge its politic and economic hegemony
in the world, which is leading towards a tripolar economic structure. 3 Thus, “Fortress North America” must be erected to challenge
“Fortress Europe”. Both must be prepared to repel onslaught of Asian products. 4 At that time the North American Free Trade
Agreement (NAFTA) came into effect with the initiatives of U.S. The NAFTA includes Canada, the United States,
and Mexico, with a total (as of 2000) combined population of 410 million inhabitants, and combined GDP of over $11 billion U.S. 5
It created the world’s largest regional freetrade zone, directly challenging the growing
primacy of the European Community and the Japan-East Asia bloc 6 and aiming to maintain
its superpower position. In contrast to the EU, the NAFTA represents a less ambitious effort 7 to establish a common
continental market for goods and services, and common protections for private investors and businesses, with little attention or
interest devoted to developing a continental political or institutional dimension. The important structural and institutional
differences among the NAFTA partners are the reasons behind that the NAFTA has limited its scope to the deregulation of trade and
investment flows within the NAFTA zone, rather than attempting a deeper, European-style political and regulatory harmonization.
The model of the world economy assumes cut-throat trade competition between the three regional blocks. To survive in this
competition each block should have a leading nation, which provides the capital and managerial skills, and a group of less developed
nations, which supply the cheap labor and mineral resources takes the role of a regulatory body and dominates the NAFTA
economically and politically. So, U.S. as the dominant nation 8 intended to hook up with Mexico to obtain
low-cost labor and oil. Canada’s role is primarily “an energy and resource hinterland”. 9 For U.S., NAFTA will
mean a chance to regain competitive positions eroded by Japanese and European rivals. 10
For the U.S. the implementation of a North American free trade zone represented an important but hardly epochal
development, one which mostly served to reinforce its already-existing economic and strategic
dominance on the continent and even in the world. Trade patterns within the NAFTA
conform largely to a “hub-and-spoke” structure 11 , with the U.S. located at both the
geographical and the economic center of the continent. 12 The United States adopted economic
regionalism toward the end of the twentieth century. NAFTA of the early 1990s were crafted to apply the liberal
policies and free market principles closer to U.S policies. The United States did not impose
NAFTA on North America but it clearly had an inordinate and even hegemonic influence on North
America’s adherence to the disciplines and principles favored by the United States. 13 Free trade,
reciprocity, national treatment of investment, domestic trade policy, dispute settlement, labor and environment protection, and
liberalization of services as well as agriculture were NAFTA tenets. 14 NAFTA is a U.S.-led RIA, a symbolic and
genuine innovation that more formally organized North America with the United States at its
geo-economic hub. The NAFTA would draw both neighbors more closely into the U.S. sphere of
influence, reducing the perceived geopolitical risk to U.S. interests that had been posed by
occasional outbreaks of nationalist sentiment in Mexico and Canada. 15 Mexico’s place in North America
raises issues about the tradeoffs involved in integrating more closely developed and developing economies. This is what made
NAFTA so consequential for the possibility of linking the global North and the global South in
the
Americas. The NAFTA is contributing to the broad US goal of promoting economic growth,
political stability, and progress toward democracy in Mexico. 16 The NAFTA’s provisions should complement
and augment the extensive economic reforms already under way in Mexico and provide an insurance policy against any
reversion to past protectionist and interventionist policies that impeded US trade with Mexico. 17 As a result, a
prosperous Mexico would become a thriving market for U.S. exports. 18 NAFTA reinforces ongoing Mexican trade and
investment reforms 19 , which along with reforms in Mexican laws relating to intellectual property rights have generated
substantial new opportunities for U.S. firms. The United States has long championed a Pan American
vision of a liberal, democratic, capitalist hemisphere based on precepts long held to be
sacrosanct among its public 20 and private leaders. Integrating North and South America or at least
bringing them closer together meant allowing for a substantial role in Latin America for U.S.
power and policy. For the United States, organizing a RIA in North America was a strategy more than an ultimate goal.
Befitting its global status, it had a more ambitious agenda for the world economy beyond its own neighborhood. The United States
pursued two tracks in economic regionalism during the waning years of the twentieth century. One was a North American or
continental track. The second track is Pan American. As a unipolar region, North America had unique
advantages; its hegemonic structure made NAFTA an obvious first step for a free trade area. After
NAFTA, trade dependence and other economic relations are greater than before. The steep concessions that Mexico had to make to
gain admittance to this exclusive North American club were palatable to most Mexicans because the two highly interdependent
economies made structure and policy more congruent. 21 The same is not true of the hemisphere in general. 22 During the mid1990s, the United States entertained the view that NAFTA would be the vehicle for the more ambitious project
of building a RIA for the entire hemisphere. It did not quite work out that way. The idea was to widen or broaden
NAFTA by including new members through the accession clause 23 , but NAFTA did not expand. 24 NAFTA was bereft of support as
the vehicle for creating a FTAA 25 . While structural power is important, so too are two other elements of power: the soft power of
economic liberalism and the use of leadership to affect outcomes. U.S. influence depends partially upon an inter-
American convergence around liberal market ideas and trade policy preferences of the United
States. In other words, if Latin American leaders agree with the United States on the
principles and disciplines it advocates in the FTAA process, U.S. dominance is more
assured. The ultimate goal of U.S. is that the nations will converge around political and
economic liberalization. 26 Especially, in the wake of the terrorist acts of September 11, Iraq War and thus increasing
sociotropic threat 27 and patriotism in different countries, the American
foreign policy in NAFTA become more
important in preserving the support of its neighbors and indirectly of the entire world. U.S.
should change the context of NAFTA from mere a free trade area to a union with a Social Charter characteristic. NAFTA should
better use a regime of fair and peaceful competition, through positive integration and institution building strategies. 28 U.S should
emphasize the social quality aspects of NAFTA and help its NAFTA partners improve their economic as well as socio-
political conditions to gain new allies at the same level in the world arena. The improvement of the rule of
law and democracy should not be left in the hands of U.S., but they should be realized by institutionalization 29 taking the E.U as a
model. 30 Taking all these arguments into consideration, the NAFTA’ s success will not only shape North America’s
faith, but also the
future of the U.S influence on world politics as a superpower. NAFTA is
used by U.S. to some extent as a model 31 and a vehicle to maintain its superpower role
throughout the world. U.S. is given the opportunity to compete with the European Union and China, the most potential
emerging power, by exploiting Mexico’s cheap labor force and Canada’s natural resources. The strategic policies and actions will
determine its NAFTA partners’ position against U.S. They will either lead to stronger strategic alliances between these
countries, even including other Latin American counties, which will
enhance the U.S. dominance or lead to an
future will play an
important role; the success can help U.S. sustain its superpower role, but failure, such faced by U.S.
in the FTAA, can lead to a loss of this power, thus being a follower of E.U. in the world economy and politics it
opposition in Mexico and Canada, which could mean the loss of its superpower role. NAFTA’s
would be sufficient for U.S.
Hegemony and institutional leadership prevents extinction
Barnett 2011 – Former Senior Strategic Researcher and Professor in the Warfare Analysis & Research Department, Center
for Naval Warfare Studies, U.S. Naval War College, worked as the Assistant for Strategic Futures in the Office of Force
Transformation in the DOD (3/7, Thomas, World Politics Review, “The New Rules: Leadership Fatigue Puts U.S., and Globalization,
at Crossroads”, http://www.worldpoliticsreview.com/articles/8099/the-new-rules-leadership-fatigue-puts-u-s-and-globalizationat-crossroads, credit to LDK)
Events in Libya are a further reminder for Americans that we stand at a crossroads in our continuing evolution as
the world's sole full-service superpower. Unfortunately, we are increasingly seeking change without cost, and shirking from
risk because we are tired of the responsibility. We don't know who we are anymore, and our president is a big part of that problem.
Instead of leading us, he explains to us. Barack Obama would have us believe that he is practicing strategic patience. But many
experts and ordinary citizens alike have concluded that he is actually beset by strategic incoherence -- in effect, a man overmatched
by the job. It is worth first examining the larger picture: We live in a time of arguably the greatest structural change
in the global order yet endured, with this historical moment's most amazing feature being its relative and absolute lack
of mass violence. That is something to consider when Americans contemplate military intervention in Libya, because if we
do take the step to prevent larger-scale killing by engaging in some killing of our own, we will not be
adding to some fantastically imagined global death count stemming from the ongoing "megalomania"
and "evil" of American "empire." We'll be engaging in the same sort of system-administering activity that has marked our
stunningly successful stewardship of global order since World War II. Let me be more blunt: As the guardian of
globalization, the U.S. military has been the greatest force for peace the world has ever
known. Had America been removed from the global dynamics that governed the 20th century, the mass murder never
would have ended. Indeed, it's entirely conceivable there would now be no identifiable human civilization left,
once nuclear weapons entered the killing equation. But the world did not keep sliding down that path of
perpetual war. Instead, America stepped up and changed everything by ushering in our now-perpetual greatpower peace. We introduced the international liberal trade order known as globalization and played loyal
Leviathan over its spread. What resulted was the collapse of empires, an explosion of democracy, the persistent
spread of human rights, the liberation of women, the doubling of life expectancy, a roughly 10fold increase in adjusted global GDP and a profound and persistent reduction in battle deaths from statebased conflicts.
Success leads to global modeling of NAFTA
Pastor, 04
– Robert A., Robert A., Professor at and Founding Director of the Center for North American Studies at American University
(“North America's Second Decade,” Foreign Affairs, Jan/Feb 2004)
North America's second decade poses a distinct challenge for each government. First, the new Canadian prime minister, Paul Martin, should take the
lead in replacing the dual bilateralism of the past with rule-based North American institutions. If he leads, Mexico will support him, and the United
States will soon follow. Mexico, for its part, should demonstrate how it would use a North American Investment Fund to double its growth rate and
begin closing the development gap. Finally,
the United States should redefine its leadership in the twenty-first
century to inspire support rather than resentment and fear. If Washington can adjust its
interests to align with those of its neighbors, the world will look to the United States in a new way.
These three challenges constitute an agenda of great consequence for North America in its second decade. Success will not only
energize the continent; it will provide a model for other regions around the world.
That solves war – ensures interdependence
Griswold, 07 (Daniel T. -the associate director of the Center for Trade Policy Studies at the
Cato Institute in Washington, 12/31/98, “Trade, Democracy and Peace: The Virtuous Cycle,”
http://www.cato.org/publications/speeches/trade-democracy-peace-virtuous-cycle
First, as I argued a moment ago, trade and globalization have reinforced the trend toward
democracy, and democracies tend not to pick fights with each other. Thanks in part to
globalization, almost two thirds of the world’s countries today are democracies—a record high.
Some studies have cast doubt on the idea that democracies are less likely to fight wars. While it’s
true that democracies rarely if ever war with each other, it is not such a rare occurrence for
democracies to engage in wars with non-democracies. We can still hope that has more countries
turn to democracy, there will be fewer provocations for war by non-democracies.¶ A second and
even more potent way that trade has promoted peace is by promoting more economic
integration. As national economies become more intertwined with each other, those nations
have more to lose should war break out. War in a globalized world not only means human
casualties and bigger government, but also ruptured trade and investment ties that impose
lasting damage on the economy. In short, globalization has dramatically raised the economic
cost of war.¶ The 2005 Economic Freedom of the World Report contains an insightful chapter on
“Economic Freedom and Peace” by Dr. Erik Gartzke, a professor of political science at Columbia
University. Dr. Gartzke compares the propensity of countries to engage in wars and their level of
economic freedom and concludes that economic freedom, including the freedom to trade,
significantly decreases the probability that a country will experience a military dispute with
another country. Through econometric analysis, he found that, “Making economies freer
translates into making countries more peaceful. At the extremes, the least free states are about
14 times as conflict prone as the most free.”¶ By the way, Dr. Gartzke’s analysis found that
economic freedom was a far more important variable in determining a countries propensity to
go to war than democracy.¶ A third reason why free trade promotes peace is because it allows
nations to acquire wealth through production and exchange rather than conquest of territory
and resources. As economies develop, wealth is increasingly measured in terms of intellectual
property, financial assets, and human capital. Such assets cannot be easily seized by armies. In
contrast, hard assets such as minerals and farmland are becoming relatively less important in a
high-tech, service economy. If people need resources outside their national borders, say oil or
timber or farm products, they can acquire them peacefully by trading away what they can
produce best at home. In short, globalization and the development it has spurred have rendered
the spoils of war less valuable.¶ Of course, free trade and globalization do not guarantee peace.
Hot-blooded nationalism and ideological fervor can overwhelm cold economic calculations. Any
relationship involving human beings will be messy and non-linier. There will always be
exceptions and outliers in such complex relationships involving economies and governments.
But deep trade and investment ties among nations make war less attractive.
Maximizing the legitimacy of arbitration procedures would shore up
NAFTA’s symbolic credibility
Cordero-Moss 2013 – member of the Commission on Arbitration of the International
Chamber of Commerce; Senior Research Fellow and Honorary Lecturer on International Business Law at
the Centre for Energy, Petroleum, and Mineral Law and Policy; Ph.D in Law at Russian Academy of
Sciences (Giuditta, “INTERNATIONAL COMMERCIAL ARBITRATION: DIFFERENT FORMS AND
THEIR FEATURES” 2013 //SRM)
The identity, or rather renown of the relevant institution is perceived by many parties both as a
security for orderly proceedings and as a ‘brand’ in support of award enforcement. Instead of parties
and arbitrators having to spend time on reinventing the wheel, institutional arbitration offers procedural rules
that have been proved to work in practice and that exist conveniently at the outset of the
proceedings. Further, it may well be true that a recognized institutional brand carried by an award can make it
easier at times to enforce the award in local courts, the brand serving as a form of guarantee of
the legitimacy of the proceedings. Institutional quality control of award may further help to
ensure effective award enforcement and in the 2010 Study, scrutiny of the award by an
institution was mentioned by 33% of the participants as one of the factors that favourably
influenced their choice of institution. Further, institutions make decisions in support of arbitration based on
their experience. They make initial decisions whether the institution (or any arbital tribunal that would be appointed by it) has or
manifestly lacks jurisdiction to proceed with the case. They appoint or replace arbitrators, in which task they are
assisted by their knowledge of the pool of available arbitrators, and of the arbitrators’ expertise
and track record of pervious case handling (under the auspices of that institution). As the specialization of
arbitration increases, so does the need for assistance in finding the right arbitrator for the
dispute. Institutions also perform a gap-filling function where the arbitration’s agreement is silent (e.g. fixing the language or the
seat of the arbitration). They handle the financial aspects of the arbitration, fixing advances on costs and confirming fees and
expenses payable to arbitrators – costs being determined according to established schedules and thus predictable to the parties.
Institutions also manage time limits and other administrative aspects of the case and their staff are available for consultation on
various questions that may arise during the proceedings.
2ac NAFTA Uniqueness
Economic disintegration is hollowing NAFTA now
Peters, 09 – Enrique Dussel, professor at the Graduate School of Economics, Universidad Nacional Autónoma de México (“Manufacturing
Competitiveness: Toward a Regional Development Agenda,” The Future of North American Trade Policy: Lessons from NAFTA, Pardee Center,
November 2009, http://www.ase.tufts.edu/gdae/Pubs/rp/PardeeNAFTACh2PetersManufNov09.pdf)
One of the Mexican government’s goals in signing NAFTA was to expand its manufacturing sector by stimulating exports. In the early years following
implementation, Mexico succeeded in attracting foreign investment and increasing manufacturing exports, with notable expansion in automotive,
the three NAFTA countries
together have been losing their ability to compete in manufacturing in the global market. This
suggests the need for a more proactive and long-term regional response. Even before the recent global financial and
economic crisis1, the manufacturing sectors in the NAFTA-region were under similarly extreme
pressures. The share of manufacturing in terms of GDP and employment has been falling in the three NAFTA countries, particularly since 2000
(See Figure 1). Contrary to the period 1994–2000, which saw increasing regional integration in a
highly competitive global market, from 2000–2009 (March) the NAFTA region together lost 6.3
million jobs in manufacturing, or 27 percent of total employment in the sector.2 This suggests that
in general, and in particular since 2000, the process of regional integration has deteriorated; in
fact, an increasing process of “disintegration” has been taking place since then. These
tendencies have only deepened since the second half of 2008 with the global crisis. In recent years, the original
NAFTA integration agenda among the NAFTA countries has given way to one focused on security topics, with
little sustained attention to socioeconomic, infrastructure, and other regional development issues.
apparel, and electronics, among others. Yet this apparent success masks fundamental weaknesses, as
Mexican Economy – Uniqueness
The Mexican economy is improving, but signs are grim unless
something is done
Hernandez May 03, 2013 *Journalist at LA times citing various government agencies, blogger, Emerging Journalist of the
year in 2006, Specializing on Mexico City, lived and worked there for many years¶ (Daniel, “Small growth for Mexico's economy in
first quarter of 2013,” http://articles.latimes.com/2013/may/03/world/la-fg-wn-mexico-first-quarter-economy-201320130502)//MW
MEXICO CITY - Mexico's
economy grew only 1% in real terms in the first quarter of 2013, the Finance
project Mexico will grow by
3.5% for the year overall.¶ The figure represents a "deceleration," economists at the Finance Ministry said in
a news conference. They laid the blame mostly on external factors, such as growth rates in the United
States.¶ ¶ The news of a slowdown came as Mexican President Enrique Peña Nieto's administration hosts President Obama for the
Ministry said Thursday, a stark result for government economists who continue to
first time Thursday and Friday, with the intertwined national economies high on the binational agenda. The two leaders held a news
conference Thursday at the National Palace in the heart of the historic center in Mexico City. On Friday, Obama will deliver a speech
to students at the capital's Anthropology Museum.¶ Other financial signals looked grim for Mexico as Obama arrived here,
contrasting with an aggressive media campaign meant to boost global confidence in Mexico's economy.
Retail sales have dropped and industrial output has slowed in the first months of 2013, financial news reports said.¶ In
another indicator that hits at the wallets of Mexico's workers and consumers, the inflation rate hit 4.25% in March, an almost 68%
increase over December 2012, Mexican economists said.
Mexican Economy – Ad Hoc Bad
Mexico is being economically harmed by each new dispute under the
current arbitration system
Raymond 2013 – Federal court correspondent and legal journalist at Thomas Reuters; Senior
Reporter at ALM Media; bachelor’s degree in journalism from University of Alaska Fairbanks
(Nate, “UPDATE 1 – CARGILL SETTLES NAFTA DISPUTE WITIH MEXICO” Feb 21, 2013
7:50pmEST http://www.reuters.com/article/2013/02/22/cargill-mexicoidUSL1N0BM08S20130222//SRM)
Cargill Inc has reached a settlement with Mexico in a dispute that resulted in a $77
million arbitration award for the U.S. agribusiness company, according to court
documents filed on Thursday. A North American Free Trade Agreement arbitration tribunal
awarded Cargill the sum in 2009 over trade barriers the company said Mexico
erected against high-fructose corn syrup from 2002 to 2007.The terms of the settlement,
reached on Feb. 5, were not disclosed. The settlement was detailed in papers filed in U.S.
District Court in New York, where Cargill had filed a lawsuit to enforce the arbitration award. A
spokeswoman for Cargill welcomed the resolution of the matter."We are dedicated to
compliance with NAFTA and believe NAFTA is a positive force for trade relations among the
United States, Canada and Mexico," she said, adding that the company will continue to invest in
its Mexican operations.A representative for Mexico's Economy Ministry did not respond to a
request for comment.Cargill filed its claims against Mexico in 2005 under Chapter 11 of
NAFTA, which allows companies to sue countries that are members of the treaty for
actions that affect their investments.In 2009, the tribunal awarded Cargill $77.3 million plus
interest and costs. In May 2012, the Supreme Court of Canada, the country where the original
NAFTA panel was held, let the award stand.Cargill in November filed the federal lawsuit in
New York to enforce the award. It said that, with interest, the award was now worth
$94.6 million.The case is Cargill, Incorporated v. United Mexican States, U.S. District Court,
Southern District of New York, 12-08225.
Mexico will continue to be negatively affected by investment disputes
Gottwald 2007 – American University International Law Review, Volume 22/Issue2/Article 3(Eric,
“LEVELING THE PLAYING FIELD: IS IT TIME FOR A LLEGAL ASSISTANCE CENTER FOR
DVELOPING NATIONS IN INVESTMENT TREATY ARBITRATION?”
As net importers of global capital, developing nations have
borne the brunt of the burden of defending the growing
number of investment treaty claims. According to U. N.
Conference on Trade and Development ("UNCTAD") data,
nearly two-thirds of the 219 known investment treaty
claims have been filed against developing nation
governments.61 Thirty-seven different developing nations are
known to have been defendants in investment treaty arbitration,
with several facing multiple claims.62 Argentina has faced an
incredible forty- two claims, with Mexico a distant
second at seventeen.63 Developing nations' experience with
investment treaty arbitration is almost exclusively as defendants:
there are only eleven known instances where developing nation
firms have filed investment treaty claims. 64 Due to the
confidentiality surrounding non-ICSID arbitrations, the
actual number of claims against developing nations is
likely to be significantly higher.65
Other Latin American countries are trending toward regional
arbitration courts to combat costly unfair procedures
Martinez 2012 – Vice president of the International Centre for Dispute Resolution (Luis M.,”LATIN
AMERICA AND THE ARBITRATION BACKLACK” 2012
http://www.adr.org/aaa/ShowPDF?doc=ADRSTG_022214 //SRM)
Increasingly, Latin American states have been taking the position that
their national courts should reassert their authority over investment
treaty arbitration.6 The return of the Calvo7 doctrine is being discussed in the
context of investment treaty arbitrations where there are trends towards greater
sovereign policy being reserved by the states in the international investment
regime. One commentator noted with concern a complete retreat from
investor-state arbitration, citing as one example the recent US–
Australia BIT which foregoes investor-state arbitration in favour of
local courts.8 Of course, states determine what dispute resolution mechanisms
they will consent to and a number of states are not party to the ICSID
Convention, including Mexico and Brazil. While Mexico is a party to the NAFTA
agreement, which does provide for international arbitration of NAFTA-related
disputes, Brazil has passed its PPP (public-private partnership) law allowing for
arbitration between state-owned entities and private individuals provided they
take place in Brazil and are conducted in Portuguese.9 The majority of BITs also
contain the possibility of ad hoc arbitration pursuant to the UNCITRAL
Arbitration Rules as an alternative or if the ICSID option is in question.
Moreover, states as well as state-related parties may opt to select a dispute
resolution mechanism that calls for institutional arbitration by the incorporation
of a specific arbitration clause in their contract with investors which references
the Rules or, although less likely, by executing a post dispute submission
agreement providing for institutional arbitration.10
Trade Key to Mexican Economy
Trade is key to Mexico economy- most of trade is from NAFTA
Global Tender, ( “Economy of Mexico” http://www.globaltenders.com/economy-mexico.htm)
//ST
The economy contains a mixture of modern and outmoded industry and agriculture, both of
which are increasingly dominated by the private sector. Recent administrations have expanded
competition in ports, railroads, telecommunications, electricity generation, natural gas
distribution and airports, with the aim of upgrading infrastructure. As an export-oriented
economy, more than 90% of Mexican trade is under free trade agreements (FTAs)
with more than 40 countries, including the European Union, Japan, Israel, and much of Central
and South America. The most influential FTA is the North American Free Trade
Agreement (NAFTA), which came into effect in 1994, and was signed in 1992 by the
governments of the United States, Canada and Mexico. In 2006, trade with Mexico's two
northern partners accounted for almost 90% of its exports and 55% of its imports.
Recently, the Congress of the Union approved important tax, pension and judicial reforms, and
reform to the oil industry is currently being debated. According to the Forbes Global 2000 list of
the world's largest companies in 2008, Mexico had 16 companies in the list. Mexico is an export
oriented economy. It is an important trade power as measured by the value of merchandise
traded, and the country with the greatest number of free trade agreements. In 2005, Mexico was
the world's fifteenth largest merchandise exporter and twelfth largest merchandise importer
with a 12% annual percentage increase in overall trade. In fact, from 1991 to 2005 Mexican trade
increased fivefold. Mexico is the biggest exporter and importer in Latin America; in 2005,
Mexico alone exported US $213.7 billion, roughly equivalent to the sum of the exports of Brazil,
Argentina, Venezuela, Uruguay, and Paraguay. However, Mexican trade is fully integrated with
that of its North American partners: close to 90% of Mexican exports and 50% of its imports are
traded with the United States and Canada. Nonetheless, NAFTA has not produced trade
diversion. While trade with the United States increased 183% from 1993–2002, and that with
Canada 165%, other trade agreements have shown even more impressive results: trade with
Chile increased 285%, with Costa Rica 528% and Honduras 420%. Trade with the European
Union increased 105% over the same time period. The North American Trade Agreement
(NAFTA) is by far the most important Trade Agreement Mexico has signed both in
the magnitude of reciprocal trade with its partners as well as in its scope. Unlike the
rest of the Free Trade Agreements that Mexico has signed, NAFTA is more comprehensive in its
scope and was complemented by the North American Agreement for Environmental
Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).
Yes Mexican NAFTA Withdrawal
Brazil quit NAFTA-like trade agreements because of similar
investment arbitration issues; this could inspire Mexico to leave
NAFTA if the U.S. doesn’t initiate a plan to fix them
Whitsitt 2008 – journalist for Investment Treaty News, law degree from NYU, assistant professor of
International Trade Law and International Investment Law at University of Calgary Law School
(Elizabeth, Damon Vis-Dumbar “INVESTMENT ARBITRATION IN BRAZIL: YES OR NO?” 30 November
2008 http://www.iisd.org/itn/2008/11/30/investment-arbitration-in-brazil-yes-or-no/ //SRM)
As of January 2006, Brazil had realized approximately US$ 88 billion in sales
revenue and some US$ 18 billion in debt transfer as a result of its privatization
program. Foreign investment accounted for approximately 48% of that total. Despite
the importance of foreign investment to its economy and unlike all other South American states,
Brazil is not a party to any bilateral investment treaties (BITs) and has not ratified the
ICSID Convention. One of the reasons for Brazil’s apparent reluctance to bind itself
to such agreements is legal uncertainty. Specifically, there is controversy in Brazil
with respect to whether ratification of such agreements is prohibited under Brazilian
law on grounds that it impedes the sovereign right of the state. However, others note that
Brazil may lawfully, and in fact has previously consented to binding foreign
arbitration by routinely entering into contracts that provide for such dispute resolution
mechanisms. Meanwhile, pressure to ratify BITs builds from Brazilian investors, who have
become increasingly internationalized. Indeed, in 2006, Brazilian companies invested more
overseas (US$28 billion) than the country received in foreign investment. While Brazil’s
outward foreign investment flows have since dipped, according to the United Nations
Conference on Trade and Sustainable Development, Brazil remains one of Latin
America’s leading exporters of capital. Not surprisingly, Brazilian multinationals are
asking for BITs and the protection they promise. ITN has interviewed three lawyers to seek their
views on whether Brazil should begin ratifying bilateral investment treaties, and if so, why.
Nathalie Bernasconi Osterwalder is the Managing Attorney at the Centre for International
Environmental Law. Todd Weiler, is a professor, arbitrator, legal counsel and consultant in
international economic law. Pedro Alberto Costa Braga de Oliveira is a Brazilian lawyer, and
currently general counsel of Enel Brasil Participações, an indirect subsidiary company of Enel
S.p.A.
Mexicans don’t like NAFTA—they want revisions
Faux o3
[Jeff Faux. Founder of the economic policy institute. How NAFTA failed Mexico. June 16 2003.
http://prospect.org/article/how-nafta-failed-mexico. //SRSL]
During the 1993 battle over the North American Free Trade Agreement, the proposal's promoters' most politically effective
argument was that NAFTA would keep Mexicans out of the United States. As political writer Elizabeth Drew later observed, "Antiimmigration was a sub-theme used, usually sotto voce, by the treaty's supporters." The voce was not always sotto. "We don't want a
huge flow of illegal immigrants into the United States from Mexico," said former President Gerald Ford, speaking at one of thenPresident Bill Clinton's pro-NAFTA rallies. "If you defeat NAFTA, you have to share the responsibility for increased immigration into
the United States, where they want jobs that are presently being held by Americans." Leaving aside the xenophobia,
Ford's argument made economic sense: If NAFTA were to create more jobs in Mexico, fewer
Mexican workers would leave. When people can earn a decent living in their own country, they
would generally rather stay put. Thus although workers in the poorer European countries can get jobs anywhere in the
common market, few have moved across national borders because jobs in their own countries are expanding. Growth in the
European Union periphery was largely stimulated by so-called cohesion funds, provided by richer nations for public investment.
The program was so successful that, after centuries of exporting people to the rest of the world, Ireland in 1996 became a net
importer of migrants. NAFTA proponents, on the other hand, claimed that merely opening Mexico to free trade and unregulated
foreign investment would produce the job growth and rising incomes needed to create a stay-at-home middle class. It was the
capstone on an effort begun in the early 1980s by a group of U.S.-educated economists and businesspeople who took over the ruling
Partido Revolucionario Institucional (PRI) in order to build a privatized, deregulated and globalized Mexican economy. Among their
chief objectives was tearing up the old corporatist social contract in which the benefits of growth were shared with workers, farmers
and small-business people through an elaborate set of institutions connected to the PRI. NAFTA provided no social
contract. It offered neither aid for Mexico nor labor, health or environmental standards. The
agreement protected corporate investors; everyone else was on his or her own. Indeed, NAFTA
is the nation-building template imposed on developing countries by recent corporate-dominated
U.S. administrations and their client international finance agencies. It is the model for the
proposed Free Trade Agreement of the Americas, as well as for the Bush administration's
development plans for Iraq. Americans' understanding of NAFTA's impact on the Mexican
people is obscured in part by the gap between what Mexican elites tell U.S. elites and what
Mexicans tell one another. Last December former Mexican President Carlos Salinas, who
negotiated NAFTA, told a Washington conference of applauding corporate lobbyists,
government officials and free-market think tankers that NAFTA was a great success. "The level
of trade and type of products that cross the borders," he said, "silenced even the most ardent
critics." The next day, in Mexico City, a large group of very ardent Mexican farmers
broke down the door of the lower house of the Mexican Congress to denounce
NAFTA and demand that it be renegotiated . Similar demonstrations -- joined by
teachers, utility workers and others -- have erupted throughout the country, closing bridges and
highways and taking over government offices. Polls show that most Mexicans think
NAFTA was bad for Mexico . Largely because of the agreement, Salinas is the most unpopular ex-president in
modern Mexican history. NAFTA's critics did not doubt that it would stimulate more trade; that was,
after all, its function. Rather, they predicted that any benefits would go largely to the rich while
the middle class and the poor would pay the costs, and that the promised growth would not
materialize. They were right. NAFTA is not the cause of all Mexico's economic troubles, but it
has clearly made them worse. Since NAFTA's inception in 1994 -- indeed, for the 20 years of neoliberal "reform" -- the
Mexican middle class has shrunk and the number of poor has expanded. Economic growth has been below the old corporatist
economy's performance and substantially less than what is needed to generate jobs for Mexico's growing labor force. During his
2000 campaign, Mexican President Vicente Fox promised that under his six-year term the country would grow 7 percent per year.
Two and a half years after his inauguration, growth has averaged less than 1 percent. So the northward migration continues. Between
the U.S. censuses of 1990 and 2000, the number of Mexican-born residents in the United States increased by more than 80 percent.
Border-crossings diminished temporarily after September 11, but they are now as great as ever. Some half-million Mexicans come to
the United States every year; roughly 60 percent of them are undocumented. The massive investments in both border guards and
detection equipment have not diminished the migrant flow; they have just made it more dangerous. In the past five years, more than
1,600 Mexican migrants have died on the journey to the north, including 19 people who were found asphyxiated in a truck near
Houston in May. Still, as a neighbor of one of the 19 who left told The Washington Post, "If you're going to improve your life, you
have to go to the United States." The failure of NAFTA to deliver on its promise of a better life for
Mexicans represents more than just a misplaced faith in free trade.
Behind the laissez-faire rhetoric,
Mexico's neoliberals were pursuing a large-scale program of government social engineering aimed at forcing Mexico's rural
population off the land and into the cities, where it could provide cheap labor for the foreign investment that the new open economy
would attract. Salinas and the PRI reformers did not, of course, announce that they intended to depopulate rural Mexico. The
Mexican government promised that as tariffs on U.S. agriculture products fell, generous financial and technical assistance would
enable small farms to increase their productivity in order to meet the new competition. But, after the treaty was signed, the
reformers pulled the rug out from under the rural peasantry. Funding for farm programs dropped from $2 billion in 1994 to $500
million by 2000. Meanwhile, the U.S. Congress massively increased subsidies for corn, wheat, livestock, dairy products and other
farm products exported to Mexico. American farmers now receive 7.5 to 12 times more in government
help than Mexican farmers do. This "comparative advantage" enabled U.S. agribusiness to blow
thousands of Mexican farmers out of their own markets. But when the displaced campesinos
arrived in nearby cities, few jobs were waiting. NAFTA concentrated growth along Mexico's
northern border, where factories -- called maquiladoras -- processed and assembled goods for
the then-booming U.S. consumer market. Between 1994 and 2000, maquiladora employment doubled while
employment in the rest of the country stagnated. Neoliberalism was supposed to reduce the income gap between Mexico's relatively
rich border states and the poorer ones in the country's middle and south. Supporters claimed that privatizing banks and opening
them to foreign ownership would make more capital available for domestic firms in domestic markets. But -- in the depressingly
familiar pattern of privatization the world over -- the PRI reformers sold off the banks to friends, then bailed out the new owners
when the peso collapsed a year after NAFTA was passed. Made whole with more than $60 billion of the taxpayers' money, these
crony capitalists resold their banks at a handsome markup to foreign investors. For example, an investment group headed by the
well-connected Roberto Hernandez bought Mexico's second-largest commercial bank for $3.2 billion and sold it to CitiGroup for
$12.5 billion. Yet, as 85 percent of the country's banking system was being turned over to foreigners, lending to Mexican business
actually dropped from 10 percent of the country's gross domestic product in 1994 to 0.3 percent in 2000. The global bankers were
more interested in taking deposits and making high-interest-rate consumer loans than in developing Mexico's internal economy.
Meanwhile, booming investment in the exporting sweatshops of the north has created a social and ecological nightmare. Rural
migrants have overwhelmed the already inadequate housing, health and public-safety infrastructures, spreading shantytowns,
pollution and crime. Maquiladora managers often hire large numbers of women, whom they believe are more docile and more
dexterous than men at assembly work. Earnings are typically about $55 a week for 45 hours -- poverty wages in an area where acute
shortages of basic services have raised the cost of living. Families break up as men cross the border in search of jobs, leaving women
vulnerable to the social chaos. An Amnesty International report on the border town of Ciudad Juárez, where hundreds of young
women have been killed, quotes the director of the city's only rape crisis center (annual budget: $4,500): "This city has become a
place to murder and dump women. [Authorities] are not interested in solving these cases because these women are young and poor
and dispensable." As the U.S. economy slowed down after 2000, the number of jobs in the maquiladoras stopped growing.
Moreover, the privileged access that Mexicans thought NAFTA had given them began to erode.
The same global corporate coalition that forced NAFTA through Congress later successfully lobbied for the United States to sponsor
China's full entry into the World Trade Organization (WTO), paving the way for a huge increase in Chinese exports to the United
States. In the last two years, an estimated 200,000 maquiladora jobs have left Mexico for China, where workers can be had for oneeighth the Mexican wage. In a deregulated world, there is always someone who will work for less. Hope that NAFTA would enable
Mexico to export its way to prosperity has largely vanished. In order to relieve the pressures of unemployment, Fox has been
badgering George W. Bush to liberalize migration, create guest-worker programs, and provide Mexican migrants with civil rights
and social benefits. The Mexican president regularly refers to migrants in the United States as "heroes," and their remittances have
become one of the country's most important sources of foreign earnings. The White House has been unresponsive. After Fox -facing a July election with 80 percent of Mexicans opposed to the invasion of Iraq -- declined to join Bush's war coalition,
Washington is even less interested. In time White House pique will fade. But, in any event, Mexico cannot develop
by sending its most ambitious and industrious workers to the United States. It is not the poorest and
least educated that migrate; it is the working-class risk takers -- those who save up the $2,000 to pay a smuggler to take them across
the river and who, once in the United States, sacrifice to send home their exploitation wages. Mexico needs these people. It paid for
the cost of their upbringing and education, in effect subsidizing U.S. consumers of low-wage work. The Mexican government, aided
by some U.S. foundations and nongovernmental organizations, is attempting to channel migrant remittances into quasigovernmental credit unions that would provide capital to businesses and local governments. This may be useful. But migrants send
money home for immediate consumption to maintain the living standards of parents, grandparents and children in a depressed
domestic economy. It is an odd notion of economic development that rests on the meager savings of low-wage Mexican workers in
America while wealthy Mexicans regularly ship their capital to New York, London and Zurich. In fact, for Mexico's oligarchs, the
public focus on the condition of Mexican workers in the United States has the great virtue of diverting political attention from the
condition of Mexican workers in Mexico. Fox has been eloquent on the maltreatment of undocumented migrants at U.S. farms and
factories. Rightly so. But he has been silent about the harsh and brutal conditions suffered by Mexico's own domestic migrants,
including those as young as 11 years old who were found -- after Fox's election -- to be working in his own vegetable packing plant.
As in many developing countries, the largest part of Mexico's economic problem lies not in restricted export markets but in the
stifling maldistribution of wealth and power that restricts internal growth. The gap between Mexico's rich and poor is among the
worst in the Western Hemisphere. The rich hardly pay any taxes. Despite the image of Mexico as a country with a strong state, the
public revenue is 19 percent of GDP, compared with the 30 percent that the presumably more conservative American public sector
takes. Mexico -- even more than did the poorest nations of Western Europe -- needs substantial investment in education, health and
infrastructure to create sufficient jobs for its people. A contribution to that investment by the United States and Canada equivalent
to the EU's cohesion funds would approach $100 billion. The only imaginable scenario for anything near that level would require,
among other things, a dramatic democratic reform of Mexico's corrupt and inefficient public sector. Ironically, hopes for
such a future lie in the political fallout from NAFTA's lack of success. By 2000, Mexican voters
were so disgusted with the failed promises of PRI neoliberals that they ousted the party after 71
years of continuous rule. Whatever else Fox may accomplish, his breaking of the PRI's political stranglehold has
reverberated throughout Mexico's political economy. Not only are elections contested at all levels, the major institutions of the old
corporatist system -- the client labor unions, rural organizations and small-business groups -- are being slowly democratized by a
younger generation of leaders demanding accountability. It is too early to tell if or when these forces will produce a more effective
and broadly shared growth agenda for Mexico. But one lesson is already clear: Of all the world's developing countries, Mexico was by
far in the best position to exploit the neoliberal model. Its proximity to the U.S. market and a domestic U.S. constituency of millions
of Mexican American voters gave Mexico advantages under NAFTA that no other Third World nation had. The testimony of
hundreds of thousands of Mexican workers each year making the hard and dangerous trip north
is evidence that, after two decades, the model is not working in Mexico. If it is not working there, it is
unlikely to work anywhere.
Farmers don’t like NAFTA—maize prices rising
Bury 04
[Scott Bury. Teacher and writer. Maize farmers unhappy with
NAFTA’s price. Winter of 2004.
http://www.cec.org/Page.asp?PageID=122&ContentID=2522&SiteNo
deID=454. //SRSL]
"I have nothing," protested Francisco Martinez during a 2002 demonstration in Mexico City. "I am here out of desperation because I
am poorer than I have ever been." A sign carried nearby squarely pointed a finger at the alleged culprit:
"NAFTA," it read, "Equals Death." Given the changes suffered by many small farmers in the past
ten years, it's understandable they felt moved to protest. Maize prices paid to producers dropped
44 percent. A wave of cheap, subsidized US maize flooded the domestic market. And many
farmers left the land, while others struggled to earn enough to provide for their families. The
roots of Mexico's corn crisis go deep, however, beginning years before NAFTA. "The problem
started back with Mexico's entry into the GATT [General Agreement on Tariffs and Trade] in
1986," according to Laura Carlsen, director of the Americas Program with the InterHemispheric Resource Centre in Mexico City. "The Mexican government began to dismantle policies that had
ensured a basic price support for corn." The removal of tariffs, quotas and direct supports was accelerated with the signing of
NAFTA and the opening of Mexico to international markets, says Carlsen. From 1994 to 2002, US exports of maize to Mexico nearly
tripled, from 2.2 million tonnes annually to 6 million tonnes. Mexico also became the second-largest export market for US maize,
accounting for 11 percent of all exports in 2000, or about US$550 million worth. The effects in rural Mexico have been pronounced.
As many of the larger farmers shifted from maize to other crops, smaller, poorer farmers actually increased the cultivated land under
maize to offset their decreasing income and feed their families. The unfortunate irony is that these smaller farmers lost even more
money on corn every year, and fell deeper into poverty. The expansion of maize agriculture into more marginal lands has also proven
costly for Mexico's rich biodiversity. According to NAFTA's Promise and Reality: Lessons from Mexico for the Hemisphere,
published by the Carnegie Endowment for International Peace, this practice has resulted in an average deforestation rate of more
than 630,000 hectares per year since 1993 in the biologically rich regions of southern Mexico. NAFTA's impact on
agriculture in Mexico, however, is decidedly mixed. Some sectors are clear winners while
others—maize in particular—have faced a harsher adjustment to open borders despite tariff
protections Mexico built into the trade agreement. But Brian Doidge of the Ontario Corn Producers Association
says the low prices are not the result of free trade: "Pricing has always been determined in the Chicago exchange," he says. What is
keeping the price of corn so low is the US agricultural policy, expressed most recently in the 2002 Farm Bill, which provides
substantial support for corn producers. "Corn is considered the most heavily-subsidized food crop in the US," says Tim Wise, a
researcher at Tufts University. US farmers benefit from subsidies amounting to some US$10 billion
annually, or roughly 10 times the total Mexican agricultural output. Some observers have
accused the US of dumping corn onto the world market because the price of corn is below its
own cost of production. "This is a 'wealth effect', in that the cash may keep farms in production
longer than they would otherwise be without the supports," says Chad Hart of the University of
Iowa. But the main winners are traders in corn and the consumers of cheap corn, including the livestock industries of Mexico and
the US who use corn as animal feed, says Wise. Producers and consumers of corn syrup and sweetened products, as well as many
other industrial users of corn flour, oil and syrup, have also benefited. "It's not benefiting US farmers," says Carlsen. "It's benefiting
the corn traders. The subsidy to farmers ends up being a subsidy to the traders and big corporations." Hart admits that while US
agriculture benefits from the supports, and consumers from lower prices, the US taxpayer has to cover the costs of these programs.
Moreover, he admits that other countries have been adversely affected. "Mexico, Canada, Argentina and any other nation exporting
agricultural produce will be affected," he says. Which is why some Mexican farmers brought their message to
Mexico City, calling for renegotiation of NAFTA. But maize pricing doesn't express the full importance of corn in
Mexican society, cautions Carlsen. In the country where maize first evolved and which is today a world center of maize genetic
diversity, growing corn is not just a means of earning a living, she says—it also signifies the preservation of the rural cultural identity
of Mexico.
Permanent Court Key
A more integrated legal system is key to solidify trade ties
Sands 2002 – Director of the Centre on International Courts and Tribunals and Professor of
International Law at University College London, Queen’s Counsel and Bencher of Middle Temple,
representative of Macedonia at International Court of Justice (Phillipe, “NORTH AMERICAN FREE
TRADE AREA DISPUTE SETTLEMENT PROCEDURES”, www.pict-pcti.org/courts/NAFTA.html//SRM)
The North American Free Trade Area, comprising Canada, Mexico and the United States, was
established in 1992 by the North American Free Trade Agreement (NAFTA). Like several
other regional economic integration agreements, such as the European Communities,
the EFTA, the Andean Community or the Mercosur, the objective of NAFTA is to remove
trade barriers, create a common market, and promote economic cooperation
between participating states. However, unlike most similar agreements, NAFTA falls
significantly short of creating an integrated legal system, much less a structured
dispute settlement system. While the EC, EFTA, Andean Community and COMESA, to
cite a few, are endowed with permanent international courts to settle disputes
between member states, individuals and the organization's institutions on the
implementation of the basic agreements and legislation deriving therefrom, dispute
settlement under NAFTA is less institutionalized and much more fragmented,
relying mostly on ad hoc arbitration.
Modeling – NAFTA Modeled
LA wants Free Trade- They will use NAFTA as a model
Gitli and Murillo April 2000 * The authors are senior researchers at the International Center on Economic
Policy for Sustainable¶ Development of the Universidad Nacional in Heredia Costa Rica (CINPE). They also coordinate the Project¶
Integration, Trade and Environment (INCA)¶ (Eduardo and Carlos, “A Latin American Perspective on the NAFTA Model for Trade
and Environment Issues in the FTAA Context,”
http://www.iatp.org/files/latin_american_perspective_on_the_nafta_model_.pdf)//MW
Therefore, a good deal of respected multilateral rules –among many other things- is¶ necessary to take advantage of the
opportunities set forth by the new international¶ economy. Some countries may find that the WTO umbrella covers every field of
interest¶ for them. Others may consider that deeper economic integration is a better instrument. All¶ Latin American
countries consider (although in various degrees, and with different timings)¶ that deeper integration is preferred,
and therefore they have agreed to establish the Free¶ Trade Agreement of the Americas (FTAA).¶ The FTAA
must:¶ • Respect national sovereignty, that is, the domain of national constitutions and laws.¶ • Ensure market access for Latin
American goods and services, not only through duty¶ free status in all the relevant markets, but also by rendering their exports free
of other¶ “exports harassment measures”. This means a predictable and transparent system for¶ export and imports.¶ • The
mechanism for resolution of disputes should be flexible and as inexpensive as¶ possible.¶ • The different mechanisms of the
agreement should be geared to promote investments.¶ • Facilitate cooperation among countries to take advantage of the proximity of
the¶ countries involved, reducing transportation costs (through public and private¶ investments in the corresponding infrastructure),
taking measures to facilitate trade,¶ solving migratory problems and, in general, reducing transaction costs.¶ • Last but not least, the
FTAA must serve as an input to a better life, taking advantage of¶ the specialization process, and striving to avoid the negative
aspects of “development”5.¶ The main objet of analysis in this paper is the “NAFTA model for trade and¶
environment”. Therefore we are not going to argue on the last two issues, but on the lessons¶ and the conclusions Latin
American countries may draw from this model. That is, we¶ assume (as we have showed in another place6) that
somehow both issues should be dealt¶ upon in the context of the FTAA or in other context, as long
as it is a convincing one.
NAFTA success encourages Mexico to liberalize and sign other FTAs
Chomo, 02 (Grace Victoria-master in the fields of International trade and marketing, market
research, international finance, WTO agreements, 2002, “Free Trade Agreements Between
Developing and Industrialized Countries: Comparing the U.S.-Jordan FTA with Mexico’s
Experience Under NAFTA,”
http://books.google.com/books?hl=en&lr=&id=oTvAV27FvocC&oi=fnd&pg=PA2&dq=countrie
s+modeled+after+NAFTA&ots=aRLQbJN9Rt&sig=aYPK3kiDjd3VmzQM9jpRMC7WtdM#v=on
epage&q=countries%20modeled%20after%20NAFTA&f=false
The net benefits accruing to the developing Mexican economy from liberalizing trade with its
industrialized North American neighbors stimulate the Mexican government to expand its free
trade policy. Mexico signed bilateral trade agreements with 10 countries over the last 7 years.
These countries included developing countries in Latin American as well as industrialized
economies such as the EFTA members and the European Union. The new Mexican FTAs are all modeled after the NAFTA, a
rules-based agreement with a clearly defined dispute settlement (Diaz). The Mexican experience under NAFTA has
shows a country rapidly expanding exports, not only to North America but to the world. Mexico
received increased infusions of FDI from investors around the world during NAFTA negotiations
and following NAFTA implementation. Mexico has ben able to maintain economic reforms, even
under the severe financial crisis of 1994-95. Empirical studies of NAFTA trade liberalization
have indicated significant impacts for the Mexican economy form trade liberalization with
Canada and the United States (Kehoe and Kehoe). The Mexican economy was expected to experience the greatest
adjustments under the NAFTA, due to the small relative size of its economy and higher levels of protectionism. Lopez-Cordova
reports Mexican real per capita GDP only 34 percent of US GDP in 1994, suggesting large factor endowment differences between
Mexico and its northern neighbors. Large differences in factor endowments prior to trade liberalization suggest large trade and
production effects from liberalization. Jordanian per capita GDP in 2000 was 5 percent of US per capita GDP. Like Mexico, Jordan
is expected to experience efficiency and welfare gains from resource adjustments under the trade liberalization measures of the FTA.
Future Latin American FTAs will be modeled after NAFTA
Prospect Journal, 10 (4/19/10, “NAFTA AND US CORN SUBSIDIES: EXPLAINING THE
DISPLACEMENT OF MEXICO’S CORN FARMERS,”
http://prospectjournal.org/2010/04/19/nafta-and-u-s-corn-subsidies-explaining-thedisplacement-of-mexicos-corn-farmers/
Since the 1994 implementation of NAFTA, massive rural to urban migration took place within
Mexico as agrarian farmers moved to metropolitan centers. This tri-lateral free-trade agreement
between the Canada, the United States and Mexico was unprecedented, particularly the relationship
between the United States and Mexico, as states with such drastically different levels of development merged their economies. This
paper will examine which factors are responsible for this massive internal migration within Mexico following the integration of the
North American economies. There are two highly divergent explanations for the Mexican migration and subsequent urbanization
that followed the signing of NAFTA, which I will detail in the literature review. The determination of the culpable factors for this
migratory flow is crucial because the accepted interpretation will significantly influence how states will approach free-trade
agreements and their inclusion of rules pertaining to the trade of agricultural commodities in the future. This study is particularly
pertinent as the looming Panama and Colombia free trade agreements, modeled after NAFTA, are
currently being debated by the United States Congress.
Modeling – Free Trade Good
Free trade promotes international peace and prevents war
Griswold, 98 (Daniel T. -the associate director of the Center for Trade Policy Studies at the
Cato Institute in Washington, 12/31/98, “Peace On Earth, Free Trade For Men,”
http://www.cato.org/publications/commentary/peace-earth-free-trade-men?print
With the Christmas season and its promise of “Peace on earth, goodwill toward men” upon us, and protectionist sentiment stirring
in Washington, it is appropriate to revisit the question of whether free trade promotes world peace. Advocates of free trade
have long argued that its benefits are not merely economic. Free trade also encourages people
and nations to live in peace with one another. Free trade raises the cost of war by making nations
more economically interdependent. Free trade makes it more profitable for people of one nation
to produce goods and services for people of another nation than to conquer them. By promoting
communication across borders, trade increases understanding and reduces suspicion toward
people in other countries. International trade creates a network of human contacts. Phone calls, emails,
faxes and face-to-face meetings are an integral part of commercial relations between people of different nations. This human
interaction encourages tolerance and respect between people of different cultures (if not toward
protectionist politicians). Ancient writers, expounding what we now call the Universal Economy Doctrine, understood the link
between trade and international harmony. The fourth-century writer Libanius declared in his Orations (III), “God did not bestow all
products upon all parts of the earth, but distributed His gifts over different regions, to the end that men might cultivate a social
relationship because one would have need of the help of another. And so He called commerce into being, that all men might be able
to have common enjoyment of the fruits of the earth, no matter where produced.” Open trade makes war a less
appealing option for governments by raising its costs. To a nation committed to free trade, war
not only means the destruction of life and property. It is also terrible for business, disrupting
international commerce and inflicting even greater hardship on the mass of citizens. When the door
to trade is open, a nation’s citizens can gain access to goods and resources outside their borders by offering in exchange what they
themselves can produce relatively well. When the door is closed, the only way to gain access is through military conquest. As the 19th
century Frenchman Frederic Bastiat said, “When goods cannot cross borders, armies will.” History
demonstrates the peaceful influence of trade. The century of relative world peace from 1815 to
1914 was marked by a dramatic expansion of international trade, investment and human
migration, illuminated by the example of Great Britain. In contrast, the rise of protectionism and the downward
spiral of global trade in the 1930s aggravated the underlying hostilities that propelled Germany
and Japan to make war on their neighbors.
Free trade prevents wars—triggers peace and prosperity, and strong
relations
Brooks 2K May 1, 2000*with the Department of Journalism at Carleton University¶ Law
student, University of Toronto '00¶ Reporter / Columnist for Toronto Star '00¶ (Jason, “Make
Trade, Not War,” http://www.independent.org/students/essay/essay.asp?id=1456)//MW
Free trade is, in one sense, like a nuclear weapon. Which seems strange to say because trade is
associated with peace and prosperity, while nuclear weapons are synonymous with apocalypse and
terror. But here is how they are alike: they both prevent war by making it more costly. A strong
argument exists that the only reason the Cold War never got “hot” between the United States and
the Soviet Union was that nuclear weapons made outright conflict unthinkable. Trade, in a
similar way, binds the fortunes of people in the world together. It is the best assurance of peace. By
forging bonds between customers and suppliers around the world, trade gives citizens a vested
interest in the wellbeing of people in other countries—war becomes a matter of mutual assured
destruction, if you will. With trade, a war abroad will have fallout at home. But while trade has the
deterrent effects of powerful weapons, is far preferable because of its other advantages. Where
weapons are expensive, free trade brings prosperity and freedom. Where weapons bring terror, free
trade fosters harmony and encourages people to resolve disputes without violence. Richard Cobden, a
nineteenth century British industrialist and politician, often argued in favor of trade over
armaments to discourage war. His recipe for peace remains as true today as it was more than 150
years ago: “The more any nation traffics abroad upon free and honest principles, the less it will
be in danger of wars.” Free trade is indeed the wellspring of peace.¶ What is trade? It is the natural,
voluntary interaction of people for mutual benefit. Trade does not require force. American
economist Henry George writes, “Free trade consists simply in letting people buy and sell as they
want to buy and sell. It is protection that requires force, for it consists in preventing people from
doing what they want to do.Ӧ In order to set up an argument linking free trade to peace, it is
useful to first look at the incentives inherent to a world where borders are shut by governments.
In such a world the incentive is for war. First of all, protectionism puts a government in conflict with
its own people. Consider: In wartime, nations punish their enemies by blockade or trade sanctions.
Where a government pursues a protectionist policy, it essentially commits an act of war on its own
people. This would be bad enough if the harm inflicted ended with its own citizens, but it doesn’t.
A protectionist government harms, in addition to its own people, all citizens of the world who
wanted to trade with the besieged. It follows that any government imposing protectionism puts
itself in conflict with citizens of many nations. The harmful effects of one protectionist policy
circle the world like shock waves. “If a national government hinders the most productive use of
its country’s resources, it hurts the interests of all other nations,” writes Ludwig von Mises. “The
economic backwardness of a country with rich natural resources injures all those whose
conditions could be improved by a more efficient exploitation of this natural wealth.” What is the
resulting incentive for the harmed citizens of the world? Mises gives us the answer. “This
economic nationalism must result in war whenever those injured believe that they are strong
enough to brush away by armed violent action the measures detrimental to their own welfare.Ӧ
Protectionism encourages war—and this is a very important point to be made. It encourages
countries to make war on the protectionists and it encourages, perhaps most of all, the
protectionists to make war on everyone else. That protectionism leads to war becomes obvious if
we consider that citizens may, fundamentally, acquire goods from abroad in only one of two
ways: trade or conquest. When voluntary exchange is made impossible by artificial restrictions imposed
by governments, the only other way nations may access foreign markets is by force. A country insisting
on self-sufficiency will have to choose between shortages or war. The reason is clear: around the
world, concentrations of population do not in general correlate with the distribution of natural
resources, such as wheat, oil, or technical expertise. In a world of protectionism, countries will not
have access to resources unless those resources lie within its national boundaries. It is this basic problem
with protectionism that makes extending national boundaries, and ultimately war, so appealing.
Resource shortages caused by protection have been a problem in Europe for centuries. Mises
observes that it was a problem in particular for Germany. “The Germans tried—in vain—to solve
it by war and conquest.” Protectionism makes war profitable. But the solution to this perverted
state of incentives is simple: free trade. Where borders are open it makes no material difference
to the citizens how far national boundaries stretch. Goods and services will still flow freely.
Citizens can migrate and sell their labor anywhere when borders are open. To paraphrase Ayn
Rand, a protectionist country survives by looting; a free country survives through production and
trade.¶ It has been written time and again that the common folk don’t make war—it is the kings,
politicians and autocrats who wage war at the expense of the people. If so, trade is a solution to
war. First, in contrast with protectionism, trade makes war more costly to the common people.
Citizens of democracies will be less likely to vote for leaders who wage war. Second, free trade
tends to undermine autarky. It spreads liberty and helps create new democracies, thus empowering
those citizens to whom war is most costly. In a democracy, common people, not the rulers,
ultimately make the country’s choices through the votes they cast. This helps explain why
democracies are less likely than autocracies to wage aggressive wars. Historian Spencer Weart, in Never
at War, states boldly that “Well-established democracies have never made war on one another.”
While a few exceptions are possible depending on your definition of a well-established
democracy, it is a powerful statement that, in general, holds. Evidence is all around us. Wars
between Canada and the United States, Britain and France or any other of a few dozen
democracies that come to mind are unthinkable. Rudolph Rummel, in Power Kills, arrives at similar
conclusions, adding “the more a nation is democratic, the less severe its overall foreign
violence.” One explanation why democracies don’t fight each other, first suggested by Immanuel
Kant, is that citizens reject war because it costs too much. Wars are destructive, people are
forced to fight and die, and both victor and vanquished are burdened with war debts after the
peace is signed. Free trade makes war less likely for democracies because it adds to the costs of war for
the majority of citizens who elect their leaders. The more a country trades abroad, the more its
consumers will depend on imports, and the more domestic jobs will depend on exports. By
giving majorities of people a material self-interest in peace, war is discouraged. Under current
rules of trade, for instance, we can be sure the United States will never wage war on Japan. We
can be sure of this if for no other reason than that Americans like to watch their wars on TV—
and the Japanese make the TVs. Of course, there are a million other ties that would prevent these
countries from fighting—from the trade in automobiles to cross-ownership of capital in
thousands of industries.¶ Yet an argument could still be made that common citizens of
democracies do like some wars—perhaps because war means more programming choices in
prime time or because it boosts national pride. Adam Smith raised this possibility, writing at a
time of great protection, in 1776. For some people the amusement from reading about the war in
the newspapers “compensates the small difference between the taxes which they pay on account
of the war, and those which they had been accustomed to pay in time of peace.” While this may
be true, we must remember that taxes are a relatively small price of wars, particularly when trade
between two warring nations is extensive. It seems that if citizens were wont to support wars for
their entertainment value this would apply far more readily to countries with which trade is
minimal. Where trade links are strong, war threatens citizens with much lower living standards—
for many reasons. One interesting argument given the interest in the stock market by a broad
base of society in recent years is that with free flows of capital, anyone who holds stocks or
mutual funds will likely have investments abroad. These investments are often in foreign
companies or in companies that conduct substantial amounts of business abroad. The more we
have free trade, the more citizens of a warring nation must worry that a missile launched from
home will ultimately impact on their own investments abroad—and their pocketbooks at home.
Free trade, because it makes war costly, is the greatest guarantor of peace because it turns
concern for ourselves into concern for others. The more a nation trades, the more going to war
with another country becomes indistinguishable from going to war with oneself.¶ We now turn
to another powerful benefit of trade: how it undermines tyranny. Undermining tyranny is important
for two reasons. First, as mentioned, democracies are less likely than autocracies to make international
violence. Second, and perhaps more important, weakening autocratic governments fosters peace
within countries by protecting citizens from the violence of their own governments. While international
war is horrific, deadlier still are conflicts inside the borders of nations. And deadliest of all are
the prolonged, often covered-up wars waged by governments against their own citizens. When
considering how free trade brings peace, it is important to focus not just on how it prevents
international violence but also how it prevents domestic slaughter. To give an idea how the body
counts stacks up, Rudolph Rummel offers some statistics. From 1900 to 1987, the war dead in
the world from civil and international conflicts totaled 38,500,000. This giant figure is dwarfed,
however, when we look at the mass murder committed by governments on their own people: at
least 169 million killed, by Rummel’s count, in the first 87 years of the 20th century. This
includes the approximately 21 million people murdered by the government of Nazi Germany and
the 55 million of its own citizens the Soviet government killed. Many other governments,
including China, Cambodia and Japan have murdered millions or hundreds of thousands. Free
trade helps to foster peace by transferring power away from governments into the hands of
citizens. Free trade is closely linked with a number of other personal freedoms, including the
right to hold private property, that are prerequisites for democracy. How does free trade
empower people? Free trade—either at home or abroad—largely implies that people can do what
they want. They may coordinate and interact with whom they choose, they may buy what they
can afford and sell what is theirs. Control gained by citizens over their own actions is, by
corollary, control lost by government. In a pure state of free trade, people may migrate freely
between nations. It is not for nothing that totalitarian countries build walls to keep their citizens
from leaving and erect barriers to trade. If trade had been free, citizens of the former Soviet
Union could have simply left. Millions would have enjoyed more prosperous lives elsewhere;
millions would have escaped the slaughter of the totalitarian state. Under open borders, the
Soviet government would have had to tailor is policies to appeal to the masses or else run out of
people to govern due to mass emigration.¶¶ [continued]¶ .¶ Different people have different solutions to war; none
are as logical as free trade. The war hawks have pursued a policy of mutual assured destruction, arguing
that bigger weapons make better deterrents. Others have argued for disarmament. While the
causes of war are undoubtedly varied, protectionism clearly invites conflict. To this, free trade is a
remedy. While diplomacy is important, there can be no better diplomacy than that which exists
between common citizens of the world every day in a thousand spheres of life. The more free
trade we have, the more the invisible hand of the market helps us to, while working for our own
advancement, create a world of peace. The wellbeing of others becomes our own. There is no
reason why, in a world of perfect free trade, people worldwide shouldn’t get along as well as the
citizens of the happiest, most prosperous democracies. For in a word of free trade it matters little
where borders are drawn. “Make love, not war,” was a slogan once bandied about as an answer
to war. It was a catchy phrase—and an appealing message given the two options. But it wasn’t
too practical. The real solution to war, if condensed to the size of a placard, would instead read,
“Make trade, not war.”
Free Trade is inexorably linked to Democracy—helps governments
make a shift towards positive relations
Brooks 2K May 1, 2000*with the Department of Journalism at Carleton University¶ Law
student, University of Toronto '00¶ Reporter / Columnist for Toronto Star '00¶ (Jason, “Make
Trade, Not War,” http://www.independent.org/students/essay/essay.asp?id=1456)//MW
A free trade in ideas lets citizens import cultural products of their choice, including movies, books and other literature that weakens tyranny by
spreading messages of democracy and freedom. Free trade on an internal scale allows citizens to circulate these materials amongst themselves
and organize their labor into activities that promote democracy. While free trade, or an even wider definition of capitalism, doesn’t guarantee
democracy, trade
is closely linked to democracy. Nobel laureate Milton Friedman writes that “I know of no example in time or
place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market
to organize the bulk of its economic activity.” Free
trade and democracy are, it seems, on a continuum and they move
together. Any amount of free trade detracts from the power of the government and increases the power of
common citizens. The greater the extent of this power shift, the greater a country moves from tyranny to a state
of democracy, a state that is most friendly to peace at home and abroad.¶
Heg Good – War
US influence is key to preserve the international system
Kagan, 14 Mar. 2012. Robert, has a MPP degree from the John F. Kennedy School of
Government atHarvard University, America Has Made the World Freer, Safer and Wealthier.
CNN.com, Web. http://us.cnn.com/2012/03/14/opinion/kagan-world-americamade/index.html?hpt=hp_c1
In 1941 there
were only a dozen democracies in the world. Today there are more than 100. For four
centuries prior to 1950, global GDP rose by less than 1 percent a year. Since 1950 it has risen by an
average of 4 percent a year, and billions of people have been lifted out of poverty. The first half of the 20th century saw the two most
destructive wars in the history of mankind, and in prior centuries war among great powers was almost constant. But for the past 60
years no great powers have gone to war. This is the world America made when it assumed global
leadership after World War II. Would this world order survive if America declined as a
great power? Some American intellectuals insist that a "Post-American" world need not look
very different from the American world and that all we need to do is "manage" American
decline. But that is wishful thinking. If the balance of power shifts in the direction of
other powers, the world order will inevitably change to suit their interests and
preferences.¶ What about the free market, free trade economic order? People assume China and other
rising powers that have benefited so much from the present system would have a
stake in preserving it. They wouldn't kill the goose that lays the golden eggs. But China's form of capitalism is heavily
dominated by the state, with the ultimate goal being preservation of the ruling party.¶ Although the Chinese have been beneficiaries
of an open international economic order, they could end up undermining it simply because, as an autocratic society, their priority is
to preserve the state's control of wealth and the power it brings. They might kill the goose because they can't figure out how to keep
both it and themselves alive.¶ War among the great powers was a common, if not constant, occurrence in
the long periods of multipolarity in the 16th, 17th, and 18th centuries. The
19th century was notable for two
stretches of great-power peace of roughly four decades each, punctuated, however, by major
wars among great powers and culminating in World War I, the most destructive and deadly war mankind had known up to that
point. The era of American predominance has shown that there is no better recipe for great-power peace than certainty about who
holds the upper hand.¶ International order is not an evolution; it is an imposition. It is the
domination of one vision over others -- in America's case, the domination of liberal free market principles of economics, democratic
principles of politics, and a peaceful international system that supports these, over other visions that other nations and peoples may
have. The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it.¶
US-Mexico Relations Advantage
1ac
Advantage ___ is US-Mexico relations
A North American Court on Trade and Investment is key to give
Mexico an equal stake in NAFTA – the current arbitration scheme
stacks the deck in the US’ favor
Clarkson 8 – political scientist (Stephen, professor of political economy at the University of Toronto ) “Does North
America Exist? Governing the Continent After NAFTA and 9/11” 2008 pgs. 92-93
A North American Court on Trade and Investment along with a permanent legal secretariat has
been proposed to help rectify the many deficiencies inherent in NAFTA’s ad hoc panel
system. If it served as a permanent appellate body to hear appeals to Chapter 11 rulings, it could
ensure some uniformity and predictability in investor-state cases. Such a body could confer a
more equal status on Mexico if a wider array of judges were employed and the discrimination
against the use of Spanish were eliminated. This proposal to build transborder legal governance
implicitly confirms my argument that the continental arbitral regime established by NAFTA
amounts to only weak governance, characterized by both tenuous legitimacy and limited
effectiveness.
Mexican dissatisfaction with the current arbitration scheme causes
distrust over trade issues
Scaff 2007 – Gardere Wynne Sewell LLP, Association of Corporate Counsel, J.D. from University of Houston
magna cum laude (Peter, “EFFECTIVE AND ENFORCEABLE DISPUTE RESOLUTION IN US/MEXICO
COMMERCIAL TRADE” http://www.lexology.com/library/detail.aspx?g=78cbacff-ab9a-42b4-90bc4af02b616fdc//SRM)
Introduction. Since NAFTA, commerce has steadily increased between the U.S. and Mexico. As
would be expected, increased trade brings greater pressure on these countries to provide
effective and enforceable resolution of commercial disputes. Historically, a xenophobic
distrust exists between the United States and Mexico concerning the fairness and efficacy
of the other’s legal system. Outsiders frequently view the U.S. legal system as a forum that
involves burdensome and intrusive discovery, erratic jury verdicts and outrageous punitive
damages awards. Likewise, Mexican courts are often stereotyped as being ineffective, subject to
influence and ill-suited to handle complex commercial disputes. However, this natural
predilection in favor of resolving disputes in one’s backyard often gives birth to a number of
problems in the enforcement and collection stages of the litigation. Balancing the perceived or
real advantages associated with litigating at home versus the resulting difficulties that may be
encountered in enforcement and collection, recent improvements in the laws and infrastructure
of Mexico indicate that U.S. entities and their attorneys should consider selecting Mexico for
arbitration proceedings in order to improve results during the enforcement and collection stages
of the dispute. The result for cross-border disputes resolved in the U.S. courts is that unless the
responsible entity possesses assets in the United States sufficient to satisfy the judgment, a
successful party is still required to enforce and collect by bringing an action in Mexico to assess
liability or to seek formal recognition. Over the past thirty years, Mexico has been quite
proactive in its attempts to modernize its legal system with respect to international legal issues.
Mexico has entered into a number of agreements with other countries, primarily the non-U.S.
members of the Organization of American States, providing for reciprocal recognition of foreign
judgments. Mexico also entered into a series of multinational agreements designed to promote
international judicial cooperation. To effectuate these agreements, an extreme overhaul of
Mexican law occurred with the 1988 amendments to the Federal Code of Civil Procedure. The
amendments established, for the first time, a procedure for the application of foreign law in
Mexico; allowed for the processing of letters rogatory; provided for international cooperation for
the taking of evidence; and provided for uniform enforcement of foreign judgments. Because no
cooperative agreement or treaty exists between Mexico and the U.S., to give formal effect to a
U.S. judgment (as opposed to an arbitration award) in Mexico, one must institute an expensive
and subjective judicial procedure known as homologación. Under this process, the foreign
judgment is scrutinized to determine whether the requirements under Mexican law for validity
have been met.The cumbersome process for enforcing a U.S. judgment in Mexico highlights the
potential pitfalls associated with making a knee-jerk decision to litigate in the U.S. Even if the
U.S. litigation efforts are initially rewarded with a judgment, the ultimate success of the matter
will be determined in large part by whether it is necessary to reach assets that are located in
Mexico. If so, obtaining the U.S. judgment may merely signify the beginning of the true battle –
the Mexican enforcement proceeding. The difficulty in utilizing the homologación process to
enforce a judgment is circumstantially confirmed by the frequent tactic of Mexican entities of
simply choosing not to participate in the U.S. proceedings, particularly if they do not have assets
in the U.S. subject to execution. Understanding the difficulties of recognition in Mexico, a
Mexican entity finding itself named as a defendant in U.S. litigation commonly makes a
calculated gamble to wait and defend against the claims in the Mexico courts.
This distrust risks escalation to trade wars
Grillo 2009 – TIME World; former journalist for PS, Channel 4 (UK), The Houston Chronicle, Sunday
Telegraph, Al Jazeera English, France 24, The Sunday Times, Gatopardo, and The San Francisco Chronicle; author of
El Narco: Inside Mexico’s Criminal Insurgency (Ioan, “OBAMA’S ‘TRADE WAR’: NO TRUCK WITH MEXICO” Mar
25 2009 http://www.time.com/time/world/article/0,8599,1887494,00.html //SRM)
The U.S. press has given the flare-up an ascending series of alarming descriptions: "a
dispute that could lead to a trade
war"; a "mini–trade war"; and the full, flaming "Obama's first trade war." This month's ban on Mexican truckers
operating in U.S. territory quickly led to Mexico's imposing retaliatory tariffs on a wide range of
American products. The speed with which the two governments have been willing to sacrifice free
trade for a political spat has politicians and business lobbies south of the border
increasingly worried about how well the fragile Mexican economy can survive the fracas — and
how much stomach the country has for a confrontation with the still formidable economic power
to its north. "With the world economy being so unstable and the Mexican peso falling, it is crazy to get into this protectionist
trade dispute now," says Representative Edmundo Ramirez of Mexico's former ruling Institutional Revolutionary Party. "Our
governments should be sitting down and negotiating solutions, not slapping on retaliatory measures." (See pictures of the Great Wall
of America rising on the Mexican border.) The spat, which will at least give Secretary of State Hillary Clinton something other than
drug gangs to discuss during her visit to Mexico on Wednesday and Thursday, was kicked off when President Barack Obama signed a
spending bill on March 11. Embedded in the bill was a clause that prohibits funds from being used to "implement, continue, promote
or in any way permit" a two-year-old pilot program that allowed some Mexican trucks to operate in the U.S. Pressure for the clause
had come directly from the Teamsters, who have long opposed competition from the Mexican 18-wheelers on their turf, complaining
that the foreign truckers don't meet U.S. safety standards. Down in Mexico, the administration of President Felipe
Calderón accused the U.S. of being hypocritical and protectionis t. It has a strong case. Under NAFTA, Mexican
trucks were meant to be roaming some U.S. roads in 1995 and the width and breadth of the whole country by 2000. However,
successive U.S. administrations could not say no to Teamster complaints that Mexican trucks were not fit for the interstates. Finally,
both sides agreed on the pilot program to break the deadlock. "We consider that the United States is mistaken, protectionist
and clearly violating the treaty," Mexico's Economy Secretary, Gerardo Ruiz Mateos, told a news conference on March 16.
"To decide to protect their own transport sector, they have decided to affect the competitiveness of our countries and of the region,
impacting many other productive sectors." Ruiz Mateos made the angry statements as he announced that Mexico would
slap tariffs across 90 U.S. products that were worth $2.4 billion in trade in 2007. He pulled no punches
about his goal: the tariffs were designed to hit as many different U.S. states as possible. Going into effect
on March 19, the tariffs of 10% to 45% affected goods ranging from onions and shaving cream to fruit juice and red wine. There was
even a tariff on Christmas trees, which may not have worried the growers too much because they don't sell many in March. However,
while Mexicans are normally pleased to celebrate any chance to hit back against the imperialist gringos, there was little popular
applause for the latest measures. As the world economy is suffering, the Mexican peso has lost about 40% of its value against the
dollar in the past four months. That means higher prices for just about any product imaginable in the supermarkets and stores of
Mexico, which imported $151 billion worth of goods from its northern neighbor last year. The new tariffs mean the prices will go up
even further. "This will hit poor people, whatever the government says," Ramirez says. "Poor families use
many of these products mentioned."
Trade wars can destroy entire sectors of U.S. agriculture
TBJ 2011 – Business Journal Staff (“TRADE DISPUTE BETWEEN U.S. AND MEXICO
ENDS” 7/6/2011 12:59pm http://www.thebusinessjournal.com/news/agriculture/97-tradedispute-between-us-and-mexico-ends//SRM)
California fresh grape farmers can expect to sell a higher volume of their products now that a two-year trade dispute between the
U.S. and Mexico has been resolved. In 2009 the U.S. canceled a pilot program that would have allowed
Mexican trucks to operate in the country. As a result, Mexico introduced a 45 percent tariff on
table grapes from the U.S. The move severely hurt the California fresh grape industry, causing
the exports to drop 73 percent between 2008 and 2009. Mexico is one of the largest
export markets for fresh grapes. However, in a move expected to help bring an end to the tariff on grapes U.S.
Transportation Secretary Ray LaHood is in Mexico City today signing an agreement with the Mexican government that will end the
trucking dispute. The tariff will be dropped to just 10 percent starting Friday, and will end completely once Mexican trucking begins
in the U.S. “It was important to get this issue resolved as soon as possible,” said Kathleen Nave, president of the California Table
Grape Commission, in a press release. Nave said the commission had been working with Congress and U.S. trade negotiators in
order to try to resolve the dispute. Now that the tariff on grapes is soon to be dropped, Nave plans on the commission’s marketing
staff increasing their efforts to promote California grapes in Mexico, hoping to once again reach the $61 million sales figure not seen
since 2008.
US agricultural collapse causes extinction
Lugar 4 – U.S. Senator (Richard, http://www.unep.org/OurPlanet/imgversn/143/lugar.html)
In a world confronted by global terrorism, turmoil in the Middle East, burgeoning nuclear
threats and other crises, it is easy to lose sight of the long-range challenges. But we do so at our
peril. One of the most daunting of them is meeting the world’s need for food and energy in this
century. At stake is not only preventing starvation and saving the environment, but also world
peace and security. History tells us that states may go to war over access to resources, and that
poverty and famine have often bred fanaticism and terrorism. Working to feed the world will
minimize factors that contribute to global instability and the proliferation of weapons of mass
destruction.
With the world population expected to grow from 6 billion people today to 9 billion by mid-century, the demand for affordable food will increase well beyond current
international production levels. People in rapidly developing nations will have the means greatly to improve their standard of living and caloric intake. Inevitably, that means
eating more meat. This will raise demand for feed grain at the same time that the growing world population will need vastly more basic food to eat.
Complicating a solution to this problem is a dynamic that must be better understood in the West: developing countries often use limited arable land to expand cities to house
. As good land disappears, people destroy timber resources and even rainforests as
they try to create more arable land to feed themselves. The long-term environmental
consequences could be disastrous for the entire globe. Productivity revolution To meet the expected demand for food over the
their growing populations
next 50 years, we in the United States will have to grow roughly three times more food on the land we have. That’s a tall order. My farm in Marion County, Indiana, for example,
yields on average 8.3 to 8.6 tonnes of corn per hectare – typical for a farm in central Indiana. To triple our production by 2050, we will have to produce an annual average of 25
tonnes per hectare.
Can we possibly boost output that much? Well, it’s been done before. Advances in the use of fertilizer and water, improved machinery and better tilling techniques combined to
generate a threefold increase in yields since 1935 – on our farm back then, my dad produced 2.8 to 3 tonnes per hectare. Much US agriculture has seen similar increases.
. Given the urgency of expanding food production to
meet world demand, we must invest much more in scientific research and target that money
toward projects that promise to have significant national and global impact. For the United
States, that will mean a major shift in the way we conduct and fund agricultural science.
Fundamental research will generate the innovations that will be necessary to feed the world.
The United States can take a leading position in a productivity revolution. And our success at
increasing food production may play a decisive humanitarian role in the survival of billions of
people and the health of our planet.
But of course there is no guarantee that we can achieve those results again
Trade wars harm the U.S. economy
Walsh 2013 – Reuters journalist (Eric, Thu Jan 24 2013 11:09pmEST, “REFILE-U.S. GROUPS
FEAR BIG PRICE HIKES, TRADE WAR OVER MEXICAN TOMATOES”
http://www.reuters.com/article/2013/01/25/usa-mexico-trade-tomatoes-idUSL1N0ATG3O20130125
//SRM)
MIAMI, Jan 24 (Reuters) - U.S.
business groups warned on Thursday of skyrocketing tomato prices and a
damaging trade war if President Barack Obama's administration follows through on a preliminary decision to end a
long-standing tomato trade agreement with Mexico. "We are concerned as U.S. distributors about the ability to continue
to be able to sell Mexican tomatoes with the tomato trade dispute that's going on between the
United States and Mexico," said Lance Jungmeyer, president of the Fresh Produce
Association of the Americas. He said a new pricing study had found that U.S. consumers
would be hit with huge premiums for fresh tomatoes, with prices doubling or
worse, if distributors were forced to withdraw Mexican tomatoes from the marketplace. Under some scenarios, tomatoes
could become "more expensive than steak," Jungmeyer said, adding that prices could
quickly spiral to levels "more than the American consumer can bear ." The U.S. Commerce
Department signaled in September that it favored ending the 16-year-old tomato agreement on grounds that it failed to protect U.S.
growers, especially in Florida, against Mexican tomatoes that are sold in the United States, allegedly below the cost of production. A
final decision is not due until May, but a Commerce official said U.S.-Mexico negotiations over the issue continued in Washington
this week.
Economic decline causes global war
Royal 10 – Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department
of Defense, 2010, “Economic Integration, Economic Signaling and the Problem of Economic
Crises,” in Economics of War and Peace: Economic, Legal and Political Perspectives, ed.
Goldsmith and Brauer, p. 213-214
Less intuitive is how periods of economic decline may increase the likelihood of external conflict.
Political science literature has contributed a moderate degree of attention to the impact of economic decline and the security and
defence behaviour of interdependent states. Research in this vein has been considered at systemic, dyadic and national levels.
Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modelski and Thompson’s (1996) work on
leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of
pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As
such, exogenous shocks such as economic crises could usher in a redistribution of relative power
(see also Gilpin, 10981) that leads to uncertainty about power balances, increasing the risk of
miscalculation (Fearon, 1995). Alternatively, even a relatively certain redistribution of power could lead
to a permissive environment for conflict as a rising power may seek to challenge a declining
power (Werner, 1999). Seperately, Polllins (1996) also shows that global economic cycles combined with parallel leadership cycles
impact the likelihood of conflict among major, medium, and small powers, although he suggests that the causes and connections
between global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copeland’s (1996,2000)
theory of trade expectations suggests that ‘future expectation of trade’ is a significant variable in understanding economic conditions
and security behavior of states. He argues that interdependent states are likely to gain pacific benefits from
trade so long as they have an optimistic view of future trade relations. However, if the expectation
of future trade decline, particularly for difficult to replace items such as energy resources, the likelihood for conflict
increases , as states will be inclined to use force to gain access to those resources. Crises could
potentially be the trigger for decreased trade expectations either on its own or because it triggers
protectionist moves by interdependent states. Third, others have considered the link between economic decline and external
armed conflict at a national level. Blomberg and Hess (2002) find a strong correlation between internal
conflict and external conflict, particularly during periods of economic downturn. They write, The
linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict tends to
spawn internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify
the extent to which international and external conflicts self-reinforce each other. (Blomberg & Hess,
2002, p.89). Economic decline has also been linked with an increase in the likelihood of terrorism (Blomberg, Hess, & Weerapana,
2004), which has the capacity to spill across borders and lead to external tensions. Furthermore, crises generally reduce the
popularity of a sitting government. ‘Diversionary theory’ suggests that, when facing unpopularity arising
from economic decline, sitting governments have increased incentives to create a ‘rally round
the flag’ effect. Wang (1996), DeRouen (1995), and Blomberg, Hess and Thacker (2006) find supporting evidence showing that
economic decline and use of force are at least indirectly correlated. Gelpi (1997) Miller (1999) and Kisanganie and Pickering (2009)
suggest that the tendency towards diversionary tactics are greater for democratic states than autocratic states, due to the fact that
democratic leaders are generally more susceptible to being removed from office due to lack of domestic support. DeRouen (2000)
has provided evidence showing that periods of weak economic performance in the United States, and thus weak
presidential popularity, are
statistically linked to an increase in the use of force.
Reaffirming a commitment to free trade is key to US-Mexico relations
Villarreal, 10 M. Angeles Villarreal, specialist in International Trade and Finance, “NAFTA
and the Mexican Economy”, 6/3/10, (http://www.fas.org/sgp/crs/row/RL34733.pdf)
The North American Free Trade Agreement (NAFTA), in effect since January 1994, plays a very
strong role in the bilateral economic relationship between Mexico and the United States. The two
countries are also closely tied in areas not directly related to trade and investment such as security, environmental, migration, and
health issues. The effects of NAFTA on Mexico and the Mexican economic situation have impacts on
U.S. economic and political interests. A number of policymakers have raised the issue of
revisiting NAFTA and renegotiating parts of the agreement. Some important factors in
evaluating NAFTA include the effects of the agreement on Mexico and how these relate to U.S.Mexico economic relations. In the 111th Congress, major issues of concern are related to U.S.-Mexico
trade issues, economic conditions in Mexico, the effect of NAFTA on the United States and Mexico, and Mexican migrant
workers in the United States. In 1990, Mexico approached the United States with the idea of forming a free trade agreement (FTA).
Mexico’s main motivation in pursuing an FTA with the United States was to stabilize the Mexican economy and promote economic
development by attracting foreign direct investment, increasing exports, and creating jobs. The Mexican economy had experienced
many difficulties throughout most of the 1980s with a significant deepening of poverty. The expectation among supporters at the
time was that NAFTA would improve investor confidence in Mexico, increase export diversification, create higher-skilled jobs,
increase wage rates, and reduce poverty. It was expected that, over time, NAFTA would narrow the income differentials between
Mexico and the United States and Canada. The effects of NAFTA on the Mexican economy are difficult to isolate from other factors
that affect the economy, such as economic cycles in the United States (Mexico’s largest trading partner) and currency fluctuations. In
addition, Mexico’s unilateral trade liberalization measures of the 1980s and the currency crisis of 1995 both affected economic
growth, per capita gross domestic product (GDP), and real wages. While NAFTA may have brought economic and social benefits to
the Mexican economy as a whole, the benefits have not been evenly distributed throughout the country. The agricultural sector
experienced a higher amount of worker displacement after NAFTA, in part because of increased competition from the United States
but also because of Mexican domestic agricultural reforms. In terms of regional effects, initial conditions in Mexico appear to have
determined which Mexican states experienced stronger economic growth as a result of NAFTA. Some economists argue that while
trade liberalization may narrow income disparities over the long run with other countries, it may indirectly lead to larger disparities
in income levels within a country. Over the last decade, the economic relationship between the United
States and Mexico has strengthened significantly and the two countries continue to cooperate on
issues of mutual concern. President Barack Obama met with Mexican President Calderón in May 2010 during the Mexican
president’s official state visit to the United States. The two leaders reaffirmed their commitment to
increasing cooperation in a wide range of issues, including enhancing mutual economic
growth. A key component for their global competitiveness initiative is to create a border the for
the Twenty-First Century that will expand and modernize border facilities for a secure and more
efficient border.
US-Mexico cooperation solves nuclear proliferation
Downie, 11 (Richard, expert in Latin American security affairs and a lifetime member of the
Council on Foreign Relations “Critical Strategic Decisions in Mexico: the Future of US/Mexican
Defense Relations” http://www.ndu.edu/chds/docuploaded/Dr_Downie_OCP_2011.pdf)
//ST
US ¶ and Mexican militaries
relationship could potentially lead to a
network or infrastructure of activities and agreements. Military ¶ forces from both countries would
continue to exchange intelligence and sensitive information and ¶ share operational experiences
while working toward a common purpose and objectives. Perhaps eventually, the United States and Mexico could
engage in exercises as well as combined operations that would permit the development of
The “stay the course” option would potentially offer an additional “sexenio” during which the
could expand and mature in the conduct of shared missions. If so, the growing
¶
tactics, techniques, and procedures that align their efforts not only ¶ in the fight against the
TCOs, but also in other functional areas such as disaster or humanitarian relief ¶
operations, cooperative responses to terrorism, or proliferation of WMDs. Beyond
mere confidence building measures, this process could ideally lead to the establishment of protocols or standard operating
procedures through which the forces of the two countries could operate in a common framework ¶ and ultimately achieve a level of
functional interoperability. ¶ Although the US/Mexican defense relationship has advanced significantly in the past few years—¶
certainly more quickly than any analyst would have predicted—the relationship is still not mature, ¶ stable, or consolidated. The
strong US/Canada defense relationship offers a useful example of how ¶ military-to-military relations can mitigate the long-term
impact of political decisions made on the basis ¶ of short-term disagreements between nations. The defense relationship with
Canada, for example, ¶ involves a rich tradition of agreements and joint commissions, including a bi-national command, such ¶ as
the US/Canada Permanent Joint Board on Defense, established in 1948; the Military Cooperation ¶ Committee (MCC), since 1945;
and the North America Aerospace Defense Command, based in Colorado Springs, Colorado, which is literally a two-nation
command. While cooperative US/Mexican ¶ military-to-military initiatives seem to increase almost monthly, there is a long way to
go before the ¶ United States and Mexico can achieve the kind of mature defense partnership that characterizes the ¶ US/Canada
relationship. The US/Mexico defense relationship is not yet at a point in which institutional ¶ factors can help mitigate political
tensions between the two countries. ¶ Time is the key element in advancing toward a more institutionalized structure of bilateral or
even trilateral cooperation. At a minimum, a sustained process is needed for the US and Mexican
militaries to ¶ continually enhance their relationship in a manner that benefits both countries.
Continuing on the present course would probably entail more and more intrusive U.S. cooperation, both for equipment and training
of Mexican law enforcement personnel, as well as for intelligence and other tactical support. ¶ The lofty, ultimate goal of such
could be the establishment of a bi-national or even tri-national command
in Mexico, addressing humanitarian assistance and disaster relief, ¶ as well as protection of critical
infrastructure intelligence sharing, cyber security, counterterrorism, ¶ and perhaps support for countera process from a US viewpoint
TCO efforts. Ideally, this multinational security organization could be ¶ under the leadership of a Mexican military or civilian
official.36 While international military organizations such as NATO or even NORAD could serve as
models, even in the most optimistic of scenarios ¶ that level of US/Mexican, and potentially Canadian, cooperation would require
many years—even decades—of sustained effort and interaction. As increasing numbers of Mexican military personnel work ¶ closely
with their US counterparts for longer periods of time, there could be a corresponding reduction ¶ in the stigma and barriers to a
closer US/Mexico defense relationship arising from our past history.¶ If the next administration retains the current approach of
emphasizing military involvement in the effort in confronting the TCOs, the outlook toward sustained enhancement in the
US/Mexican defense ¶ relationship would be very positive. Ongoing US/Mexican programs would presumably continue and ¶
expand. Accordingly, this option keeps the US and Mexican defense establishments focused on the ¶ same mission: facilitating
integrated national and international efforts to combat the TCOs, a common ¶ enemy.37 Institutional arrangements would continue
and personal and professional relationships would ¶ be strengthened. In short, Option A would facilitate a continued process of
greater understanding and ¶ increased interoperability between the two militaries. Conceivably, over time US and Mexican defense ¶
and military organizations would be working in coordinated or even integrated arrangements
Proliferation risks extinction
Krieger, ‘9
[David, Pres. Nuclear Age Peace Foundation and Councilor – World Future Council, “Still
Loving the Bomb After All These Years”, 9-4,
https://www.wagingpeace.org/articles/2009/09/04_krieger_newsweek_response.php?krieger
]
Jonathan Tepperman’s article in the September 7, 2009 issue of Newsweek, “Why Obama Should Learn to Love the Bomb,” provides a
novel but frivolous argument that nuclear weapons “may not, in fact, make the world more dangerous….” Rather, in
Tepperman’s world, “The bomb may actually make us safer.” Tepperman shares this world with Kenneth
Waltz, a University of California professor emeritus of political science, who Tepperman describes as “the leading ‘nuclear
optimist.’” Waltz expresses his optimism in this way: “We’ve now had 64 years of experience since Hiroshima. It’s striking and against all
historical precedent that for that substantial period, there has not been any war among nuclear states.” Actually, there were a number
of proxy wars between nuclear weapons states, such as those in Korea, Vietnam and
Afghanistan, and some near disasters, the most notable being the 1962 Cuban Missile Crisis. Waltz’s logic is akin to
observing a man falling from a high rise building, and noting that he had already fallen for 64
floors without anything bad happening to him, and concluding that so far it looked so good that
others should try it. Dangerous logic! Tepperman builds upon Waltz’s logic, and concludes “that all states are rational,” even
though their leaders may have a lot of bad qualities, including being “stupid, petty, venal, even evil….” He asks us to trust that rationality will always
prevail when there is a risk of nuclear retaliation, because these weapons make “the costs of war obvious, inevitable, and unacceptable.” Actually, he
is asking us to do more than trust in the rationality of leaders; he is asking us to gamble the
future on this proposition. “The iron logic of deterrence and mutually assured destruction is so compelling,” Tepperman argues, “it’s led
to what’s known as the nuclear peace….” But if this is a peace worthy of the name, which it isn’t, it certainly is not one on which to risk the future of
One irrational leader with control over a nuclear arsenal could start a nuclear
conflagration, resulting in a global Hiroshima. Tepperman celebrates “the iron logic of deterrence,” but deterrence is a
civilization.
theory that is far from rooted in “iron logic.” It is a theory based upon threats that must be effectively communicated and believed. Leaders of Country
A with nuclear weapons must communicate to other countries (B, C, etc.) the conditions under which A will retaliate with nuclear weapons. The leaders
The longer that nuclear
weapons are not used, the more other countries may come to believe that they can challenge
Country A with impunity from nuclear retaliation. The more that Country A bullies other
countries, the greater the incentive for these countries to develop their own nuclear arsenals.
Deterrence is unstable and therefore precarious. Most of the countries in the world reject the argument, made most
of the other countries must understand and believe the threat from Country A will, in fact, be carried out.
prominently by Kenneth Waltz, that the spread of nuclear weapons makes the world safer. These countries joined together in the Nuclear NonProliferation Treaty (NPT) to prevent the spread of nuclear weapons, but they never agreed to maintain indefinitely a system of nuclear apartheid in
which some states possess nuclear weapons and others are prohibited from doing so. The principal bargain of the NPT requires the five NPT nuclear
weapons states (US, Russia, UK, France and China) to engage in good faith negotiations for nuclear disarmament, and the International Court of
Justice interpreted this to mean complete nuclear disarmament in all its aspects. Tepperman seems to be arguing that seeking to prevent the
proliferation of nuclear weapons is bad policy, and that nuclear weapons, because of their threat, make efforts at non-proliferation unnecessary and
even unwise. If some additional states, including Iran, developed nuclear arsenals, he concludes that wouldn’t be so bad “given the way that bombs
These
would be the people, and I would certainly be one of them, who see nuclear weapons as
presenting an urgent danger to our security, our species and our future. Tepperman finds that when
viewed from his “nuclear optimist” perspective, “nuclear weapons start to seem a lot less frightening.” “Nuclear peace,” he tells us, “rests
on a scary bargain: you accept a small chance that something extremely bad will happen in exchange
for a much bigger chance that something very bad – conventional war – won’t happen.” But the
“extremely bad” thing he asks us to accept is the end of the human species . Yes, that would be serious. He
also doesn’t make the case that in a world without nuclear weapons, the prospects of
conventional war would increase dramatically. After all, it is only an unproven supposition that
nuclear weapons have prevented wars, or would do so in the future. We have certainly come far too close to the
tend to mellow behavior.” Those who oppose Tepperman’s favorable disposition toward the bomb, he refers to as “nuclear pessimists.”
precipice of catastrophic nuclear war. As an ultimate celebration of the faulty logic of deterrence, Tepperman calls for providing any nuclear weapons
state with a “survivable second strike option.” Thus, he not only favors nuclear weapons, but finds the security of these weapons to trump human
security. Presumably he would have President Obama providing new and secure nuclear weapons to North Korea, Pakistan and any other nuclear
weapons states that come along so that they will feel secure enough not to use their weapons in a first-strike attack.
Do we really want to
bet the human future that Kim Jong-Il and his successors are more rational than Mr.
Tepperman?
Only the Permanent Tribunal for Trade and Investments Disputes can
ensure compliance with NAFTA – current mechanisms are weak
Pastor 11 – (Robert Pastor, former US national security advisor and writer on foreign affairs) “North American Idea: A Vision
of a Continental Future.” 2011 p. 158 <http://site.ebrary.com/lib/umich/Doc?id=10480770&ppg=219>
Canada could start by addressing the question of how to assure compliance with international
agreements, such as NAFTA. Two of the more prominent cases have been soft-wood lumber and
trucking. In both cases, the existing dispute-settlement mechanism was inadequate to the task. One
solution might be to replace this ad hoc mechanism with a permanent tribunal on trade and
investment disputes. The judges on the court would serve ten-year terms, and the court would have greater
power to fine a country that rejected compliance. Other ideas for new institutions or for reforming
existing ones are discussed in the next chapter, but the point is that Canada ought to seize as its particular mission the task of
designing a modern set of institutions for trilateral cooperation.
A permanent court with qualified, unbiased members is key
Masons 2011 – Pinsent Masons LLP Full-Service International Law Firm, ranks amongst top 20 law
firms in United Kingdom, founded 1850 (“INSTITUTIONAL VS. ‘AD HOC’ ARBITRATION” August 2011
http://www.out-law.com/en/topics/projects--construction/international-arbitration/institutional-vs-adhoc-arbitration //SRM)
For those who can afford institutional arbitration, the
most important advantages are: the availability
of pre-established rules and procedures which ensure the arbitration proceedings begin
in a timely manner administrative assistance from the institution, which will provide a secretariat or court
of arbitration; a list of qualified arbitrators to choose from; assistance in encouraging
reluctant parties to proceed with arbitration; and an established format with a
proven record. Institutional arbitration saves parties and their lawyers the effort of
determining the arbitration procedure and of drafting an arbitration clause, which
is provided by the institution. Once the parties have selected an institution, they can incorporate that institution's draft
clause into their contract. They may wish to add other elements to the clause in some circumstances – for more information, please
see our separate OUT-LAW Guide to Drafting an Arbitration Clause. These clauses can be amended from time to time by the
institution, drawing on experience in conducting arbitrations regularly, and ensures there is no ambiguity in relation to the
arbitration process. An institution's panel of arbitrators will usually be made up of experts from
various regions of the world and include many different vocations. This
allows parties to select an arbitrator
possessing the necessary skill, experience and expertise to provide a quick and effective
dispute resolution process. It should be noted, however, that the parties merely nominate an arbitrator - it is up to
the institution to make an appointment and the institution is free to refuse an appointment if it considers that the nominated
arbitrator lacks the necessary competence or impartiality. A further benefit of institutional arbitration is that the
parties and arbitrators can seek assistance and advice from institutional staff. In a less
formal ad hoc arrangement, parties to the arbitration would have to approach the
court in order to take the arbitration forward and this would inevitably incur
further expenditure. One of the perceived advantages of arbitration generally is that it provides a final and binding
award which cannot be appealed. However, there is an inherent risk that a mistake made by a tribunal could not be rectified at a
later stage. To counterbalance this risk, some institutional rules provide for scrutiny of the draft award before the final award is
issued. A dissatisfied party could then appeal to an arbitral tribunal of second instance which would be able to confirm, vary, amend
or set aside the draft award. Less formal processes provide no such option.
US Economy Uniqueness
The economy is recovering, but slowly
Kurtz May 30, 2013 *Reporter from CNN citing report made by the US COMMERE DEPARTMENT
(Annalyn, “U.S. economy continues sluggish recovery”,
http://money.cnn.com/2013/05/30/news/economy/gdp-report/)//MW
The U.S.
economy grew at a slightly slower pace than originally reported in the first quarter, according
domestic product -- the
broadest measure of economic activity -- rose at a 2.4% annual pace in the first three months of the year, down slightly from
to revisions released by the Commerce Department on Thursday.¶ The revisions show that gross
the 2.5% pace originally reported last month.¶ It's typical for the Commerce Department to revise the data several times, and
Thursday's report marks the second of the agency's three scheduled GDP estimates.¶ The report didn't significantly alter the picture
of the U.S. economy. We know from the GDP report, as well as other government data, that consumer spending picked up
in the first quarter, but job growth continued at roughly the same pace as in the fourth quarter of
2012.¶ "Today's report isn't likely to move the needle, as it contained no real surprises," said Jim Baird, partner and chief
investment officer for Plante Moran Financial Advisors.¶ Consumer spending, which accounts for roughly two thirds of the GDP
measure, rose at a 3.4% annualized pace in the first quarter. Overall, that was the fastest pick-up in consumer spending since the
fourth quarter of 2010.¶ That growth was slightly impressive, since it coincided with lower take-home pay for most
Americans, following the expiration of the payroll tax cut. On the other hand, economists also point to temporary factors at play.¶
Utilities alone accounted for about a quarter of the pick-up in consumer spending. March was also the coldest March since 2002 -- a
factor that also boosted spending on heating.¶ Spending on financial services and health care, as well as strong auto sales, were also
bright spots.¶ On the business side, spending on software and equipment boosted growth. Meanwhile, businesses restocked their
shelves and warehouses after drawing down their inventories in the fourth quarter. That, too, is likely to be a temporary factor.¶ Cuts
in government spending were the single biggest drag on economic growth. Without government cuts at play, the economy would
have expanded at roughly a 3.4% pace.
The economy is getting better
Rugaber, June 16 2013 * Writer the for Associative Press, quoting information from Christine Lagarde- managing director of the
IMF which is a world renowned organization of 188 countries examining political statur of economies. She is also a lawyer
(Christopher, “IMF: U.S. economy improving, but spending cuts slow growth” AP
http://the-japan-news.com/news/article/0000310673)//MW
WASHINGTON (AP)--The
U.S. economy is on sounder footing than it was a year ago but is still being restrained by
annual report on the
U.S. economy noted that the underlying fundamentals are gradually improving: Home prices and
construction are rising, household finances have strengthened and employers are steadily
adding jobs. The outlook was much more optimistic than IMF’s 2012 report.¶ “There are signs that the
U.S. recovery is gaining ground and becoming more durable,” Christine Lagarde, the IMF’s managing director, said in a
government spending cuts and tax increases, the International Monetary Fund said Friday.¶ The IMF’s
written statement.¶ Still, the IMF forecasts economic growth of just 1.9 percent this year, the same as its April forecast. That would
be down from 2.2 percent in 2012. And it’s below many private economists’ expectations that the U.S. economy will grow more than
2 percent this year
Plan Solves Relations
Effective dispute resolution is key to US-Mexico relations
MacDonald 2010 – Vanderbilt University, doctorate in law, associate lawyer at Latham & Watkins,
(Chad, Jan 8 2010, “NAFTA CROSS-BORDER TRUCKING: MEXICO RETALIATES AFTER CONGRESS
STOPS MEXICAN TRUCKS AT THE BORDER”//SRM)
On March 16, 2009, Mexico announced its intention to impose $2.4 billion in tariffs on United
States (U.S.) imports in response to the termination of a cross-border trucking Demonstration
Project by the U.S. The Demonstration Project, which licensed a select number of Mexican tractor-trailers (motor carriers) to
operate in the U.S., was created by the Bush administration after a North American Free Trade
Agreement (NAFTA) arbitration panel held that the U.S. was in violation of
NAFTA’s cross-border trucking provisions. Although the Demonstration Project did not technically satisfy
the NAFTA cross-border trucking provisions, which basically entitled all Mexican trucks to operate within the U.S., it served as an
armistice in the growing controversy between the U.S. and Mexico. However, Congress broke the truce on March 11, 2009,
when it removed
funding from the Demonstration Project, and Mexico immediately
struck back with tariffs on a variety of agricultural and industrial products. The
dispute over cross-border trucking has incited a “trade war” that threatens tens of
thousands of U.S. jobs and seriously undermines U.S.–Mexico relations.
NAFTA is necessary for good US-Mexico relations
Villarreal 2012 – Specialist in International Trade and Finance, Congressional Research Service (M.
Angeles, “U.S-MEXICO ECONOMIC RELATIONS: TRENDS, ISSUES, AND IMPLICATIONS” August 9,
2012 http://www.fas.org/sgp/crs/row/RL32934.pdf //SRM)
The bilateral economic and trade relationship with Mexico is of interest to U.S. policymakers because
of Mexico’s proximity to the United States, the high level of bilateral trade, and the strong cultural and economic ties
that connect the two countries. Also, it is of national interest for the United States to have a prosperous and democratic Mexico as a
neighboring country. Mexico is the United States’ third-largest trading partner, while the United States is, by
far, Mexico’s largest trading partner. Mexico ranks third as a source of U.S. imports, after China and Canada, and
second, after Canada, as an export market for U.S. goods and services. The United States is the largest source of foreign direct
investment (FDI) in Mexico. The United States and Mexico have strong economic ties through the North
American Free Trade Agreement (NAFTA), which has been in effect since
1994. Prior to NAFTA, Mexico had
followed a strong protectionist policy for decades until it began to unilaterally liberalize its trade
regime in the late 1980s. Not all trade-related job gains and losses since NAFTA can be entirely attributed to the agreement
because of the numerous factors that affect trade, such as Mexico’s trade liberalization efforts, economic conditions, and currency
fluctuations. NAFTA may have accelerated the ongoing trade and investment trends that were already taking place
at the time. Most studies show that the
net economic effects of NAFTA on both countries have been small but
positive, though there have been adjustment costs to some sectors within both countries.
Trade key to hemisphere relations
Bullrich and Zinny, 06 ( Esteban Bullrich is a Deputy in the Argentine Chamber of
Deputies and a Director at the Fundación Carta Política, a private public policy think tank. He
has a MBA from the Kellogg Graduate School of Management. Gabriel Sanchez Zinny is a Senior
Fellow at the Atlas Economic Research Foundation with a MPA from Georgetown University.
“New trade exclusive would U.S.- Latin American Relations” 10/23/06 http://www.ascoa.org/articles/new-trade-exclusions-would-harm-us-latin-america-relations” //ST
The lessons on the merits of trade continue to resonate in the 21st century with the countries
most threatening stability and peace being the ones least engaged in the global economy. As we
continue to see today, trade is the best basis for a solid and sustainable relationship among countries
and nations. Any analysis of U.S. trade policies ought to emphasize, then, not only the economic
benefits of free trade, but also the implications for American foreign policy interests . Deep U.S.
economic engagement also provides a bulwark against the region’s corruption and weak rule of
law. American companies generally require transparency and a stronger institutional framework
for doing business. Building better institutions is essential for the region’s long-term political
health. No doubt, if USTR does withdraw GSP eligibility for countries like Brazil, the Bush Administration will frame the decision
as one in keeping with the law’s statutory requirements, not as a shift in policies or priorities. But such subtleties will be lost on the
middle-class beneficiaries of free trade policies; rather, the move will be viewed as counterproductive to regional cooperation and
economic growth. The U.S. is best served by drawing the countries of Latin America away from the
anti- American axis. But, cutting trade with the region will only weaken the U.S. position.
Reducing trade barriers is key to relations
STRATFOR ’13 May 2, 2013 Stratford Global Intelligence
http://www.stratfor.com/analysis/evolving-us-mexico-relations-and-obamas-visit
Domestic political factors will determine the success of the pending overhauls. But the labor
reform could improve bilateral commerce and investment with the United States, as would a
successful liberalization of the country's energy sector in the coming years. Mexico is already the
United States' third-largest trading partner, and economic coordination between the two
countries has become a routine matter at the ministerial level, but there is still a need to
ease bureaucratic trade and investment barriers.
US Leadership Key
U.S. leadership in improving US-Mexico relations is key
Sirkin 2012 – senior partner of Boston Consulting Group; regular “Globality” columnist for
BusinessWeek.com; co-author of two books on international business and economics; summa sum laude
graduate with BS in Economics from Wharton School of University of Pennsylvania; masters in
Economics from UChicago (Harold L., “NAFTA: AFTER 20 YEARS, WE’RE NOT THERE YET” August 1,
2012 http://www.businessweek.com/articles/2012-08-01/nafta-20-years-and-not-there-yet //SRM)
The North American Free Trade Agreement (NAFTA) is nearly two decades old and it’s unclear
to many whether the United States has been a net beneficiary or a net loser from the deal. The
answer is: a bit of both. The U.S., Canadian, and Mexican economies have all benefited from
NAFTA. Not as much as they should have, because—even after 20 years—the three countries still
haven’t properly integrated their economies, which makes them competitive in many areas
where they should be cooperative. The U.S., Canada, and Mexico have unique strengths that
perfectly complement each other. Canada has abundantnatural resources and energy supplies.
Mexico has a significant, comparatively young, low-cost labor force in close proximity to the
United States. The U.S. has one of the world’s top higher-education systems and is the global
leader in technology and innovation. For our economies to benefit fully from NAFTA, these
strengths need to be integrated. There have unquestionably been some very positive benefits.
From 1993 to 2007, for example, trade among the NAFTA nations more than tripled, from $297
billion to $930 billion, according to (PDF) the Office of the U.S. Trade Representative. In 2010
alone, some 61 percent of the more than $301.5 billion in goods that Mexico imported came
from the United States, as did more than 50% of Canada’s imports. Still, critics make a valid
point: Some U.S. jobs have migrated to Mexico in the years since NAFTA took effect. But almost
all of these jobs would have moved offshore with or without NAFTA. What the NAFTA
experience tells us is that good intentions are not enough. In many respects, NAFTA’s promise
remains unfulfilled. And that’s too bad.The United States must provide the leadership
needed to integrate the U.S., Canadian, and Mexican economies. With the Dec. 1
inauguration of Mexico’s new president, Enrique Peña Nieto, the U.S. will have an ally in any
such effort.Writing in the New York Times in early July, Peña Nieto said that building on
NAFTA and “further integrating our economies” will be a priority for his administration. Until
the economies of the three countries are better integrated, the full benefits of
NAFTA will never be realized. We need to move ahead now.
Permanent Court Key
The current system is too expensive for Mexico – forces them to cave
in on important trade decisions
PCGTW 2005 – Public Citizens Global Trade Watch (“NAFTA’S THREAT TO SOVEREIGHTY AND
DEMOCRACY: THE RECORD OF NAFTA CHAPTER 11 INVESTORY-STATE CASES 1994-2005” 2005//SRM)
Third, a
government’s cost of defending against investor-state claims in various arbitration bodies
can be quite substantial. The U.S. government has already spent $3 million in just one case − defending the United States
against the challenge to California’s MTBE regulations. With 10 cases completed or pending against the United States, taxpayers
may spend an approximate $30 million simply on legal fees. The Czech Republic spent $10 million in an unsuccessful effort to
defend its interests in the two media cases mentioned above. Taxpayers in nations like Argentina, which has a total of 37
BIT cases pending against it (the vast majority by foreign utility firms challenging the emergency measures Argentina took to
weather the 2002 financial crisis, such as a freeze on utility rates) and Mexico, with 14 pending BIT cases, will face
very large bills for the specialized legal counsel needed to defend these cases. Alternatively,
countries facing such prohibitive costs may find it more expedient to cave in when a
challenge is threatened.
US-Mexico Relations Impact – Drug War
US Cooperation with Mexico is key to Solve Drug war
Council On Foreign Relations, 13- (“Mexico’s Drug war”, published on February 8
th,
2013,
http://www.cfr.org/mexico/mexicos-drug-war/p29946)//NG
Despite Mexico's strengthening democracy and booming economy, the country's security
crisis rages on. Fifty
thousand people have been killed in the past five years due to drug and organized crime-related
violence.¶ "The sense of fear and the sense of helplessness has extended beyond the areas that are mostly affected by the
increasing violence," says Alejandro Hope, a former Mexican intelligence officer. "It has changed the national conversation in
Mexico, and it has changed the way Mexicans think of their country." The crisis has been driven by many factors, experts say,
including the Mexican government's offensive against drug-trafficking organizations, which began in December 2006. And while the
country has enjoyed steady economic growth in recent years, economic inequality has left millions of Mexicans
on the margins. "Those are the types of populations that the drug cartels or gangs look to and
often recruit from," says Shannon K. O'Neil, CFR's Senior Fellow for Latin America Studies. Meanwhile, Mexico's weak
security and justice institutions, prone to inefficiency and corruption, have been "quite unable to
deal with this level of violence," argues Hope. While Mexico is unlikely to become a truly failed state, its drug war
has had a destabilizing impact on the region, says Stewart M. Patrick, director of CFR's International Institutions
and Global Governance Program. Yet the international community has done very little to address Mexico's security crisis.¶ The
United States can play a big role in helping Mexico, says O'Neil, by improving border security,
cracking down on money laundering and gun trafficking, and also by embarking on "a real
discussion" about drug demand in the United States, which is a major market for Mexico's drug trade¶
Relations now key to of alignment of interests and success Merida
Initiative
Seelke 13- Specialist in Latin American Affairs, (Clare Ribando Seelke, “Mexico’s New
Adminstration: priorities and key issues in US-Mexico Relations”, published by the congressional
research service, published on January 16, 2013, http://www.fas.org/sgp/crs/row/R42917.pdf)//NG
Mexican President Enrique Peña
Nieto has vowed to continue U.S.-Mexican security cooperation, ¶
albeit with more emphasis on reducing violent crime in Mexico. Peña Nieto’s security strategy ¶ prioritizes
crime prevention and human rights protection; it also seeks to advance judicial ¶ reform.21 While his strategy appears to
dovetail well with pillars two and four of the Mérida ¶ strategy, there are still many details of the
strategy that will have major implications for pillar one ¶ efforts that need to be fleshed out. For example, will
the National Gendarmerie have arrest ¶ authority? If not, that force will be unable to receive U.S. law enforcement assistance. How
will ¶ its mandate differ from that of the Federal Police, an entity that has received hundreds of millions ¶ of dollars of U.S. training
and equipment? How will the activities of both those forces be ¶ coordinated with the Mexican military?¶ President Peña Nieto may
also call the U.S. government to task for not adequately fulfilling its ¶ domestic pledges under Mérida to address drug demand and
the illicit trafficking of firearms and ¶ bulk currency to Mexico. His government supports efforts to enact gun control and to combat
gun ¶ trafficking from the United States to Mexico. ¶ As President Peña Nieto implements his security strategy, the
113th Congress may examine how ¶ the Mexican government’s priorities align with U.S.
interests. Congressional approval will be ¶ needed should the State Department seek to reprogram
some of the $800 million already in the ¶ pipeline for Mérida, or shift new funding to better align with
Mexico’s new priorities. Should ¶ conflicts occur between Mexican and U.S. priorities, Congress may
choose to weigh in on how ¶ those conflicts should be resolved. For example, President Peña Nieto has said
that the success of ¶ his strategy will be measured in reductions in homicides and other crimes, rather than in drugs ¶ seized or
kingpins arrested. This
shift could potentially create some tension with U.S. efforts to ¶
combat Mexico’s transnational criminal organizations. Any move by the Peña Nieto
government ¶ to negotiate with criminal groups, as the Salvadoran government has done,22
and/or legalize ¶ certain drugs, would likely prompt congressional concerns.
And Success of Merida Initiative is key to solve drug violence
Seelke 13- Specialist in Latin American Affairs, (Clare Ribando Seelke, “Mexico’s New
Adminstration: priorities and key issues in US-Mexico Relations”, published by the congressional
research service, published on January 16, 2013, http://www.fas.org/sgp/crs/row/R42917.pdf)//NG
Violence perpetrated by warring criminal
organizations has threatened citizen security and ¶ governance in parts of
Mexico and overwhelmed the country’s justice sector institutions. ¶ Although the violence has declined since late 2011, it likely
claimed more than 60,000 lives ¶ during the Calderón Administration.20 This violence has increased congressional
concerns about ¶ stability in Mexico and about the possibility of violence spilling over into the United
States. ¶ U.S.-Mexican security cooperation has increased significantly as a result of the
development and ¶ implementation of the Mérida Initiative, a bilateral security partnership announced in
2007 that ¶ involves U.S. assistance to Mexico. From FY2008-FY2012, Congress appropriated $1.9 billion in ¶ Mérida assistance for
Mexico, roughly $1.1 billion of which had been delivered as of November ¶ 2012. Whereas U.S. assistance initially focused on training
and equipping Mexican counterdrug ¶ forces, it now places more emphasis on addressing the weak institutions and underlying
societal ¶ problems that have allowed the drug trade to flourish in Mexico. The Mérida strategy now ¶ focuses on four pillars: (1)
disrupting organized criminal groups, (2) institutionalizing the rule of ¶ law, (3) building a 21st century border, and (4) building
strong and resilient communities. While ¶ bilateral efforts have yielded some positive results, the
weakness of Mexico’s criminal justice ¶ system has hindered the effectiveness of anti-crime
efforts.
US Mexico relations key to solving Mexico’s drug wars
CSIS, 4 – Center for Strategic and International Studies (“U.S.-MEXICO BORDER SECURITY AND THE EVOLVING
SECURITY RELATIONSHIP”, http://www.wilsoncenter.net/sites/default/files/Mexico.PolicyBulletin.Jan.05.pdf)
Organized crime groups based in Mexico supply most of the cocaine, heroin, and
methamphetamines, and some of the marijuana, to U.S. consumers, who, in return, send six to
nine billion dollars to Mexico each year that fuels the violence associated with this trade. The U.S.
and Mexican governments have significantly improved intelligence sharing, which has helped weaken many of these criminal
networks and disrupt some of their financial flows. At the same time, the congressionally funded Merida Initiative, which has
provided $1.6 billion to Mexico for national and public security since 2008, has been successfully strengthening the Mexican
government’s capacity and rule of law institutions. These efforts appear to be yielding some success as violence has dropped
noticeably since mid-2011. Going forward, the two countries will need to do more to disrupt the southbound flows of illegal money
and weapons that supply the criminal groups, strengthen communities under the stress of violence, and improve the performance of
police, prosecutors, and courts in Mexico. In many ways, Mexico has been successful at turning a national security threat into a
public security threat, but the country now requires significant investment to create an effective and
accountable criminal justice system and to slow the flow of illegal funds from the U.S. that
undermine these efforts. As Mexico’s security crisis begins to recede, the two countries will also
have to do far more to strengthen the governments of Central America, which now face a rising
tide of violence as organized crime groups move southward. Mexico is also a U.S. ally in
deterring terrorist threats and promoting robust democracy in the Western Hemisphere, and
there will be numerous opportunities to strengthen the already active collaboration as growing
economic opportunities reshape the region’s political and social landscape.
US Mexico relations solve immigration, drug wars, and Mexican economy
Shoichet 12 (Catherine E., “Mexico's president-elect focuses on economy during U.S. visit,” CNN, 11/27/12,
http://www.cnn.com/2012/11/27/politics/mexico-president-us-visit/index.html?hpt=hp_t1)
Mexico's new leader had a message for U.S. officials as he toured Washington on Tuesday: Ties
between the neighboring
nations must go beyond the drug war. The two countries should team up to create jobs, Mexican
President-elect Enrique Pena Nieto said at the White House. "We should reconsider greater integration of North
America to achieve a region that is more competitive and capable of creating more jobs," Pena Nieto
told U.S. President Barack Obama as reporters looked on Before his first meeting with Obama, the 46-year-old former governor said
he wanted to reshuffle the list of priorities the United States and Mexico share. In an editorial published by the Washington Post on
Friday, Pena Nieto said there was a potential for more trade, manufacturing and energy deals. "It is a mistake to limit our bilateral
relationship to drugs and security concerns," the president-elect wrote. "Our mutual interests are too vast and complex to be
restricted in this short-sighted way." Obama told reporters he was eager to develop a strong relationship with Pena Nieto and take
on a broad agenda. "We are very much looking forward to having a fruitful discussion here today about ... how we can strengthen
economic ties, trade ties, coordination along the border and improving our joint competitiveness, as well as public security issues,"
he said. New president: Grow economy to fight drugs. A crackdown on cartels was a hallmark of outgoing President Felipe
Calderon's six-year tenure, and the United States voiced its support, offering $1.6 billion to aid in the fight. Pena Nieto said
Tuesday that his government will focus more on reducing violence, but he's offered few specifics about that
approach. Peña Nieto on the drug war Aerospace industry expanding in Mexico Mexicans feeling persecuted flee U.S. Mexico may
change name to 'Mexico'. He told CNN's Wolf Blitzer on Tuesday that boosting his country's economy and creating
more social programs could be the greatest weapon to fight organized crime. Without economic
opportunities, he said, "millions of my countrymen have no other option than to dedicate
themselves sometimes to criminal activity." Opinion: To-do list for Obama and Mexico's new president. The
United States is Mexico's largest trading partner. The two countries share billions of dollars in
imports and exports and a border that stretches nearly 2,000 miles. For the first time in more
than a decade, economic issues are likely to dominate the agenda shared by Mexico and the
United States, the Washington-based Woodrow Wilson International Center for Scholars said in a policy brief this week. That's
because drug-related violence appears to have plateaued and illegal immigration in the United States from Mexico has dropped
dramatically, according to Andrew Selee, director of the center's Mexico Institute. FBI most-wanted fugitive captured in Mexico,
"What's driven the U.S.-Mexico agenda for the past 10 years has been the influx of undocumented immigrants and the headlines
about increasing violence, and now both of those have leveled off. ... It allows the two governments to begin to talk
about other issues that matter for their long-term well-being," Selee said. While security
concerns took a back seat during Obama and Pena Nieto's public remarks, both leaders
mentioned the need for immigration reform. "We do have to tell you that we fully support your proposal for this
migration reform," Pena Nieto said. "More than demanding what you should do, I do want to tell you that we want to contribute. We
really want to participate and we want to contribute toward the accomplishment, so we can participate in the betterment and wellbeing of so many people who live in your country." In addition to meeting with Obama, Pena Nieto spoke with other officials in
Washington, including U.S. Homeland Security Secretary Janet Napolitano and House Minority Leader Nancy Pelosi. He was
scheduled to travel to Canada and meet Wednesday with Prime Minister Stephen Harper. Obama noted that it was a longstanding
tradition for Mexico's president-elect to visit Washington before taking office. "We meet early with the president-elect of Mexico
because it symbolizes the extraordinarily close relationship we have between the two countries," he said. Earlier this week, analysts
said on CNN en Español's "Mexico Opina" that they hoped Tuesday's meeting would signal a new approach to interactions between
the United States and Mexico. Opinion: Mexico's misconceptions"Pena Nieto should convince Obama that Mexico deserves more
attention. ... This is the moment to change the style and propose a higher agenda," said Olga Pellicer, a
professor at Mexico's Autonomous Institute of Technology and a former diplomat. Political analyst Gabriel Guerra said Pena Nieto's
government should push to have a greater influence on affairs within the United States, convincing U.S. officials that Mexicans are
"important and relevant." "The image of the country is very negative. There is a perception that we are corrupt and drug associates.
This is a result of accumulated neglect," he said. Pena Nieto "is inheriting a neglected relationship." Mexican beauty queen killed in
shootout. Some critics have said Obama neglected Latin America during his first term, and lambasted the U.S. president for not
bringing up Mexico or other countries in the region during last month's foreign policy debate with Republican challenger Mitt
Romney. Opinion: Mexico, U.S. ties ripe for major expansion On Tuesday, Obama quipped that he was jealous that Vice President
Joe Biden would be attending Pena Nieto's inauguration in Mexico on Saturday, and he said he was looking forward to attending the
North American Leaders' Summit there next year. "Any excuse to go to Mexico, I'm always game," Obama said.
US-Mexico Relations Impact – Human Rights
US assistance solves Human Rights
Seelke 13- Specialist in Latin American Affairs, (Clare Ribando Seelke, “Mexico’s New
Adminstration: priorities and key issues in US-Mexico Relations”, published by the
congressional research service, published on January 16, 2013,
http://www.fas.org/sgp/crs/row/R42917.pdf)//NG
Congress has expressed ongoing concerns about human rights conditions in Mexico; these ¶ concerns
have intensified as U.S. security assistance to Mexico has increased. Congress has ¶ conditioned U.S. assistance to
the Mexican military and police on compliance with certain human ¶ rights standards, while
simultaneously providing funding to support human rights training for ¶ security forces and to
protect groups vulnerable to human rights abuses (such as the press and ¶ human rights defenders). The primary
goal of these efforts has been to ensure that U.S.-funded ¶ anticrime efforts are carried out in a way that respects human rights and
strengthens the rule of ¶ law in Mexico. ¶ U.S. assistance to Mexico has increasingly focused on supporting
the Mexican government’s ¶ efforts to reform its corrupt and inefficient judicial system, both as a
means to make anticrime ¶ efforts more effective and to strengthen the rule of law in Mexico. Congress has earmarked ¶ money to
support Mexico’s transition from an inquisitorial justice system to an oral, adversarial, ¶ and accusatory system that should
strengthen human rights protections for victims and the accused. Congress has also increased funding for rule of
law (ROL) programs in Mexico; asked ¶ the State Department to report on how U.S. programs are helping to achieve
judicial and police ¶ reform in Mexico (H.Rept. 112-331), and expressed support for future ROL funding.23 U.S. ¶ policymakers are
likely to follow how the Peña Nieto government moves to fulfill its pledges to ¶ enact a federal criminal procedure code to hasten
reform at the federal level and increase support ¶ to states transitioning to the new system.
US-Mexico Relations Impact – Latin America
US Mexico relations key to influence in North America, trade, and
migration
CSIS, 4 – Center for Strategic and International Studies (“U.S.-MEXICO BORDER SECURITY AND THE EVOLVING
SECURITY RELATIONSHIP”, http://www.wilsoncenter.net/sites/default/files/Mexico.PolicyBulletin.Jan.05.pdf)
Over the past few years, the U.S. and Mexican governments have expanded beyond the bilateral agenda to work closely together on
global issues, from climate change to international trade and the economic crisis. The U.S. government should
continue to take advantage of the opportunities this creates for joint problem-solving. Mexico’s
active participation in the G-20, which it hosted in 2012, and in the U.N. Framework on Climate Change, which it hosted in 2010,
have helped spur this collaboration, and the recent accession of Mexico into the Trans-Pacific Partnership negotiations provides one
obvious avenue to continue it. The two countries also coordinate more extensively than ever before on
diplomatic issues, ranging from the breakdown of democratic order in Honduras to Iran’s
nuclear ambitions. Mexico is likely to play an increasingly active role on global economic and
environmental issues, areas where the country has significant experience, and through
cooperative efforts the U.S. can take advantage of Mexico’s role as a bridge between the
developed and developing worlds, and between North America and Latin America. The bilateral
agenda will remain critically important—and the increasingly deep integration of the two
economies and societies means that efforts on trade, security, and migration will remain vital for
the future of both countries. In addition, the maturation of the bilateral relationship means that it may one day resemble
that between the United States and Canada, in which global issues can be as important as the strictly bilateral issues . A balanced
and wide-ranging U.S.-Mexico agenda—one that seeks creative and collaborative approaches on topics ranging from local gangs to
global terrorist networks and from regional supply chains to international finance—promises significant mutually beneficial results
in the coming years.
Mexico Key to US Economy
US economy is reliant on US-Mexico trade
Wilson 11 (Christopher E. Wilson, Mexico institute, Woodrow Wilson international Center for Scholars, “Working Together:
Economic Ties Between The United States and Mexico”, November 2011,
http://www.wilsoncenter.org/sites/default/files/Working%20Together%20Full%20Document.pdf)//EL
Trade with Mexico is vitally important to the U.S. economy and the livelihood of millions of
Americans. A full 6 million jobs are supported by U.S.-Mexico trade.51 This means one in every
twenty-four American workers depend on trade with Mexico to maintain their employment.
52Jobs related to trade with Mexico are geographically spread throughout the nation. The border
states of California and Texas are home to the most, with 692,000 and 463,000 trade-related
jobs, respectively. But states far away from the Southwest border also depend on bilateral trade
to sustain their local economies. New York, Florida, Illinois, Pennsylvania and Ohio each have
over two thousand U.S.-Mexico trade-related jobs, and a total of twenty-two states have over
one hundred thousand. Employment related to U.S.-Mexico trade also occurs across a wide variety of industrial sectors,
including transportation, sales, manufacturing and other services. In fact, just as in the entire U.S. economy,
service sector jobs represent a greater share of U.S.-Mexico trade-related employment than do
manufacturing jobs.53 As valuable as Mexico related employment currently is to the United
States, its importance promises to increase as the Mexican economy grows. This is because Mexico tends
to buy more U.S. exports as its GDP grows, thus increasing the number of export-related jobs in the United States. With
Mexico’s GDP predicted to grow at a steady rate for the next several years, the number of U.S.
jobs dedicated to producing goods for Mexican consumers and factories should also be expected
to increase. A quick, back-of-the-envelope style calculation shows how Mexican GDP growth creates new U.S. jobs: Mexico’s
5.4% GDP growth in 2010 was accompanied by a $34 billion dollar increase in U.S. exports to Mexico. President Obama said, “every
$1 billion increase in exports supports more than 6,000 additional jobs.”54The IMF forecasts Mexico’s GDP to grow 3.8% in
2011.55This suggests that roughly 144,000 new U.S. jobs could be created due to Mexico’s economic growth in 2011.56Despite the
large and growing number of U.S. jobs dependent on trade with Mexico, many have argued that the United States-Mexico economic
relationship and especially NAFTA have had a negative impact on domestic employment. On one side of the traditional trade debate
are those who argue that exports represent job creation and imports represent domestic job losses, as production moves to other
countries.57 On the other side of the debate are the economists who say both the increased exports and imports
associated with free trade benefit the economy and create jobs. They argue that in addition to
the export-supported jobs, cheaper imports lower U.S. manufacturers’ costs, thus increasing
sales and producingjobs.58 Proponents and opponents of NAFTA proffered these arguments in the early 1990s, often
promising economic disasters or miracles vastly greater than anything experienced. However, the importance of
production sharing takes largely beyond these debates. The interwoven supply chains and
synchronized business cycles of the United States and Mexico imply that the manufacturing
sectors in each country feel the effects of both good times and bad together.59 Since forty
percent of the value of U.S. imports from Mexico is actually made in the United States, both
exports to and imports from Mexico each support U.S. manufacturers and related industries. In
a way unlike trade with any extra-continental partner, U.S.-Mexico bilateral trade keeps
production, and therefore jobs, in the United States.
US-Mexico are fully interconnected and dependent on one another.
US Econ is also increasing
Cuellar November 12, 2012 *Founder of Pro-Trade Caucus, Ranking Member of Border and Maritime Security
Subcommittee In house, Worked with Department of Homeland Security, Chairman of Subcommittee on border. House member¶
(Henry, “Looking Beyond Our Borders: United States and Mexico Share Trade and Interconnected Economies”
http://globalpolicy.tv/features/gptv-blog-posts/officialsforum/item/321-looking-beyond-our-borders-united-states-and-mexicoshare-trade-and-interconnected-economies?tmpl=component&print=1) //MW
While there are border security issues, there is also more to the border story than the stigmas associated with the area. Trade,
tourism, retail, international education, and foreign investment link the U.S.-Mexico border and
builds strong economic ties that are interconnected and reliant upon each other. The southwest border
may share problems, but shares more opportunities, especially with trade.¶ The unsung hero of our economic recovery is
the U.S.-MX trade relations. By strengthening the ties between Mexico and the United States, we can boost
the economic output and create more jobs, which have seen staggering improvements over the years. Since the
implementation of the North American Free Trade Agreement (NAFTA), trade between the two countries has risen nearly 500%.
Mexico was the United States’ second largest goods export market in 2011. Six million jobs were created in the U.S.
because of business with Mexico. For every dollar Mexico gains from exports, fifty cents is spent on American goods,
according to the Secretary of the Economy Secretariat of the Economy of Mexico. More than $1.2 billion in goods trade crosses the
U.S.-Mexico border each day. For these reasons, trade between the U.S. and Mexico is opportune to create economic results in realtime.¶ Given our experience with the North American Free Trade Agreement and Mexico’s remarkable economic and trade
performance, the newest trade agreement under construction is the Trans Pacific Partnership (TPP), which can be seen as the
NAFTA 2.0. I believe the United States and Mexico can meet the high standards of the TPP and provide substantial economic
benefits to the United States in the process to double our exports and modernize our approach to do so. With the current and
upcoming trade agreements, it is our responsibility to maintain and support this vital collaboration
between the two countries. Naturally, with every responsibility come challenges. It is our job to come up with solutions to
border security issues, infrastructure demands and budget constraints..
Mexico is interconnected with the US and will be more important
than China in the near future
MONTEALEGRE 24 JANUARY 2013 * Diplomatic Courier Contributor, specializing in Latin American markets,
finance, economics, and geopolitics, MA in International Relations from the University of Westminster-London, a BA in Journalism
from California State University-Long Beach, and a Certificate in International Trade and Commerce from UCL¶ (Oscar, “U.S.Mexico Relations: Love Thy Neighbor,” http://www.diplomaticourier.com/news/regions/latin-america/1331-us-mexico-relationslove-thy-neighbor)//MW
A strong American economy is extremely favorable for Mexico. Turn the tables a bit, and ponder what it
means for the U.S. when a Mexican economy is robust and stable—more export possibilities for the U.S.; more investment from the
U.S. to Mexico, and vice versa, creating a win-win situation. Less need for Mexicans to leave their homeland and look for jobs in the
U.S.¶ Sounds familiar? The characteristics of many vibrant emerging markets such as China, Indonesia, Brazil, and India, are
occurring right next door. Why go East when we can venture South? Or perhaps, approach both simultaneously. According to a
Nomura Equity Research report, Mexico in the next decade will surpass Brazil in being Latin America’s
largest economy. When comparing Mexico on a GDP per capita basis, Mexico happens to be less developed than Argentina,
Chile, and Brazil. This might sound negative, but in actuality it should be music to investors’ ears: more catching up for Mexico,
meaning more investment and business activity.¶ Moreover, Mexico’s economy is highly interconnected with
the U.S. economy. Currently, Mexico sends almost 80 percent of its exports to the U.S., and roughly 50
percent of its imports are from the U.S. Manufacturing costs in Mexico are once again competitive compared to
China. Ten years ago, China’s labor costs were four times cheaper than Mexico, but with labor wages in China inflating, Mexico
now has a comparative advantage because its proximity to the U.S. Shipping cargo across the Pacific can be
more expensive and arduous, versus trucking cargo from northern Mexico and delivering to Wisconsin in a matter of days.
Mexico isn’t a US competitor
Wilson, 12 – Christopher, associate at the Mexico Institute of the Woodrow Wilson International Center for Scholars (“NAFTA: 20 Years On,
Time for a Change,” Wilson Center, 12/17/12, http://www.wilsoncenter.org/article/nafta-20-years-time-for-change)
The debates are the same, but the world is not. Globalization has changed the very nature
of trade, and if our perception does not catch up with reality, there is little doubt that we will be caught with a strategy from yesterday in the world
of tomorrow. At one point, imports and exports were what they appeared to be—the purchase of
foreign products and the sale of domestically produced goods abroad. This is no longer the case.
US imports from Mexico, for example, actually contain, on average, 40% US content. The tag may say
Hecho en Mexico, but almost half of the labor, materials and parts that went into an import from Mexico
were actually made right here in the United States. That means imports from Mexico, not just
exports, strongly support US jobs and industry. Far from a North American peculiarity, the
regionalization and globalization of supply chains is occurring worldwide. Two decades ago when NAFTA was
signed, 20% of the value of global exports came from a country other than the one selling the product, but that portion has since doubled. That is,
40% of the materials, parts and services that go into building an export are now first imported.
An iPhone, for example, according to the fine print on the back, is “Designed by Apple in California Assembled in China.” In truth, many more countries
contribute significantly to its production. Only 4% of the value of the iPhone actually comes from China, but its entire value—several hundred dollars—
is credited to China in the traditional trade accounting methods used to create national import and export statistics. Globalization ruled for much of the
last two decades, but the most recent trend is toward a regionalization of supply chains. High energy costs have made transportation more expensive,
and the increased use of computers and robots in advanced manufacturing is decreasing the need to chase cheap wages across the globe. The regional
nature of many supply chains means that US inputs are not used equally in production throughout the world. While goods we buy from our neighbors,
Canada and Mexico, contain 25%-40% US content, goods from China are just 4% US-made. This brings up the second major paradigm shift needed
Canada and Mexico are not the United States’ economic competitors, but our
partners. With parts whizzing back and forth across our borders several times as a product is
manufactured, the competitiveness of North American products on the global market depends
on the ability of each partner to build its parts efficiently and to transport them quickly to next
step in the supply chain. Instead of seeing ourselves as individual actors in a zero-sum game
where one country’s win is another’s loss, the United States, Mexico and Canada must work
together as a bloc, as an economic alliance, to promote North American exports to
the world. This means working cooperatively to eliminate blockages to trade within the region, such as
long and unpredictable wait times at the US land borders, while also joining forces to open
markets around the world. The accession of Mexico and Canada to the Trans-Pacific Partnership negotiations is a good start, but the
regarding NAFTA.
ultimate goal must be the opening of the BRICs, which are still among the most closed major economies in the world.
International trade is important for US economy- increases
employment
Ward, 09 (John, a writer in the International Trade Administration “Importance of Trade to
U.S. Economy Highlighted in World Trade Week Events”
http://trade.gov/press/publications/newsletters/ita_0509/wtw_0509.asp) // ST
The Department of Commerce, exporters, state and local governments, partner
organizations, and the public will come together for World Trade Week 2009 on May 17–
23 to recognize the importance of international trade to the U.S. economy. “World
Trade Week is an opportunity to reaffirm the benefits of trade and to emphasize America's
commitment to a global marketplace that creates good jobs and lifts up American families,” said
President Barack Obama in a proclamation issued to mark the 76th World Trade Week. “The
United States and our trading partners stand to gain when trade is open, transparent, rulesbased, and fair, showing respect for labor and environmental standards.” World Trade Week
was first observed in 1933—at a time of economic hardship for the nation—with a proclamation
by President Franklin D. Roosevelt, who designated the third week in May as “National Foreign
Trade Week.” “Foreign markets must be regained if American producers are to rebuild a full
and enduring domestic prosperity for our people,” said Roosevelt in a message to the National
Foreign Trade Council. “There is no other way if we would avoid painful economic dislocations,
social readjustments, and unemployment.” In the post–World War II era, the annual event was
renamed World Trade Week and its scope expanded to include many activities throughout
the country that recognize the importance of international trade to the U.S.
economy. Just as it always has during previous cycles of growth and recession,
exporting holds an important place in the U.S. economy. In 2008, U.S. exports of
goods and services, on a balance of payments basis, totaled $1.84 trillion, an increase of 12
percent over 2007. During the past decade, the share of U.S. gross domestic product accounted
for by exporting has been growing—from 10.9 percent in 1998 to 13.0 percent in 2008. In 2008,
according to figures compiled by the Census Bureau, exports of manufactured goods totaled
$1.12 trillion. Manufactured exports supported roughly 6 million U.S. jobs in 2006,
the latest year for which figures are available. Of those export-supported jobs, 2.58 million were
in manufacturing industries. Those jobs accounted for 19.9 percent of all U.S.
manufacturing employment, nearly one out of every five jobs. In 2008, services—the
other component of exporting—posted a record trade surplus of $139.7 billion, an increase of
17.3 percent over 2007. Services exports totaled $544.4 billion in 2008, an increase of 9.5
percent over 2007. Top U.S. services exports included other private services, such as business,
professional, and technical services ($238.3 billion); travel ($110.5 billion); and royalties and
license fees ($88.2 billion).
Corporate Governance Advantage
1ac
Advantage ___ is Transnational Corporate Governance
Ad hoc dispute resolution is anti-democratic – they’re insufficiently
transparent, biased, and unaccountable
Thomas 2005 – University of Virginia, international law PhD, law/political science lecturer at The
George Washington University, founder of The Thomas Law Firm of International Law Practice &
Transportation Law Consultancy (Larry Wayne, 2005, “INTERNATIONAL JUDITICAL POLITICS: THE
EVOLUTION OF DISPUTE RESOLUTION UNDER THE NORTH AMERICAN FREE TRADE
AGREEMENT”//SRM)
The United States, Canada, and Mexico are members of the North American Free Trade
Agreement ("NAFTA") that entered into force in 1994. NAFTA is further evidence of a new
world economic order that is emerging as a result of increased international trade and
globalization of business activities. The phrase "international judicial politics" is used to
describe the trend in regional and international trade agreements to provide for quasi-judicial
dispute resolution arrangements to resolve trade-related issues in lieu of a member country's
domestic courts. NAFTA provides, inter alia , for ad hoc panels to resolve claims arising under
NAFTA and for arbitral tribunals to decide claims by foreign investors. NAFTA also substitutes
ad hoc binational panels for domestic courts to review final determinations by the parties'
national administrative agencies that assess anti-dumping and countervailing duties. Although
there has been an international judicialization of trade law, of which NAFTA is a part, NAFTA is
a system that operates under such constraints that NAFTA has not evolved into a robust forum
for the resolution of disputes under NAFTA. Trade agreements providing for dispute
resolution have been criticized for being antidemocratic because of their failure to
provide for access to private parties, transparency, accountability, or appellate or
judicial review. The same allegedly antidemocratic factors, however, constrain the
evolution of NAFTA's quasi-judicial dispute resolution system. The dissertation
examines NAFTA's approach to dispute resolution, its legal output after ten years, and the
extent of any law-and policy-making by NAFTA panels or tribunals. Unlike the European Court
of Justice, NAFTA's dispute resolution approach structurally is incapable of
producing rules and policies that are conducive to NAFTA's systemic change,
policy-making and strategic behavior. The research is of interest to scholars who study
international dispute resolution systems, as well as to those who study the evolution of courts
and legal systems.
The current arbitration system favors investors over states
Public Citizen 2013 (“NAFTA’S BROKEN PROMISES 1994-2013: OUTCOMES OF THE NORTH AMERICAN
FREE TRADE AGREEMENT” http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf //SRM)
NAFTA grants multinational corporations new privileges and an extreme enforcement process.
NAFTA included an array of new investment privileges and protections that were
unprecedented in scope and power. NAFTA elevates foreign investors to the level of
sovereign signatory governments, uniquely empowering corporations to skirt domestic
laws and courts and privately enforce the terms of the public treaty by directly challenging
governments’ public interest policies before World Bank and U.N. tribunals. The
tribunals are comprised of three private sector attorneys, unaccountable to any
electorate, who rotate between serving as “judges” and bringing cases for
corporations against governments.62 This process is called “investor-state” enforcement.
Only commercial interests have standing to challenge government policy, not unions or
consumer groups. Despite being embedded in a “trade” agreement, NAFTA’s
sweeping investor privileges have nothing to do with the flow of goods across
borders. Ostensibly, this investor-state regime was intended to provide foreign investors a
venue to obtain compensation when their factory or land was expropriated by a government that
did not have a reliable domestic court system. However, the actual NAFTA provisions expand far
beyond that reasonable safeguard, providing foreign investors extreme privileges not available
to domestic firms, and creating incentives to offshore investments to gain the new privileges.
For example, the new protections include a guaranteed “minimum standard of treatment” that
host governments must provide, which investor-state tribunals have increasingly interpreted as
a foreign investor’s “right” to a regulatory framework that conforms to their expectations.
The current system undermines state power and effectively privatizes
transnational justice
Public Citizen 2003 – nonprofit, consumer-rights advocacy group in Washington, D.C.
(“TABLE OF FOREIGN INVESTOR-STATE CASES AND CLAIMS UNDER NAFTA AND OTHER U.S.
TRADE DEALS” March 2013 http://www.citizen.org/documents/investor-state-chart1.pdf //SRM)
NAFTA) included an array of new corporate
investment rights and protections that were unprecedented in scope and
power. NAFTA’s extreme rules have been replicated in various U.S. “free trade agreements” (FTAs), including CAFTA, the
The North American Free Trade Agreement (
Peru and Oman FTAs, and the recently passed deals with Korea, Panama and Colombia. These special privileges provide foreign
investors new rights to own and control other countries’ natural resources and land, establish or acquire local firms, and to operate
them under privileged terms relative to domestic enterprises. The scope of the “investments” covered by these rules is vast, including
derivatives and other financial instruments, intellectual property rights, government licenses and permits, as well as more
The pacts provide foreign firms with a way to
attack domestic public interest, land use, regulatory and other
laws if they feel that a domestic policy or government decision
has undermined the firms’ new trade pact privileges, such as
threatening their “expected future profits.” These firms have
access under the trade deals to an investor-state enforcement
system, which allows them to skirt national court systems and
privately enforce their extraordinary new investor privileges by
directly suing national governments. These “investor-state” cases
are litigated outside the U.S. court system in special
international arbitration bodies of the World Bank and the United Nations. A threeperson panel composed of professional arbitrators listens to arguments in the case, with
powers to award an unlimited amount of taxpayer dollars to
corporations. Because the mechanism elevates private firms and
investors to the same status as sovereign governments, it
amounts to a privatization of the justice system. If a corporation wins its private
enforcement case, the taxpayers of the “losing” country must foot the bill. Over $380 million in
compensation has already been paid out to corporations in a series of
investor-state cases under NAFTA-style deals. This includes attacks on
natural resource policies, environmental protection and health
traditional forms of investment.
and safety measures, and more. In fact, of the nearly $14 billion in
the 18 pending claims under NAFTA-style deals, all relate to environmental,
energy, public health, land use and transportation policies – not
traditional trade issues. The investor-state system has numerous worrying implications. Many worry that it
promotes the offshoring of jobs by providing special protections and rights for firms that relocate, removing the risk of foreign
the bipartisan National Conference of
State Legislatures (the national association of U.S. state parliamentary bodies) has strongly
opposed this system for its negative impact on federalism. States whose
investors having to use local court systems. And
laws are challenged have no standing in the cases and must rely on the federal government to defend state policies which the federal
government may or may not support.
Unchecked corporate power undermines democracy, is immoral, and
makes extinction inevitable
Boggs 11 (Carl Boggs, Ph.D. Political Science, University of California, Berkeley, “Phantom Democracy: Corporate Interests and
Political Power in America. New York”, Page 94-96, Palgrave Macmillan, 2011. EBL.)
Enough has been written about corporate power and its destructive impact on modern social
and political life to fill many volumes, so here the focus will be on the profoundly antidemocratic
implications of this critical analysis. In this and succeeding chapters, attention is devoted to a variety of
consequences that corporate power has for democracy, starting with a view of the American
ruling elite shaped by a network of economic interests, political arrangements, and ideological
beliefs grounded in an expanding militarized statecapitalism. My argument is that corporate power subverts
democratic politics across the entire public landscape: workplace, media, educational system, government, elections, and social
relations. Its capacity to erode participatory norms is reinforced by a confluence of factors globalization, technology, deregulation,
oligopolistic tendencies in the economy, media concentration, growth of lobbies, bureaucracy, vastly increased role of money in
politics, and expansion of the war economy. As the wildly ambitious elites atop this power structure
continue along their path of domination, accumulation, and destruction, the extreme corporate
model engulfing virtually everything before it seems more impenetrable with each passing year.
The earlier trajectory of American state capitalism, extended to the military, was brilliantly dissected by Mills in
The Power Elite (1956). Mills described an oligarchical power structure presided over by a tightly knit
circle of corporate, government, and military elites, their roles mostly interchangeable and largely
detached from the sphere of popular interests and demands. Writing after the war economy had
become a “permanent” fixture, Mills observed: “As the institutional means of power and the means of communication
that tie them together have become steadily more efficient, those now in command of them have come into command of instruments
of rule quite unsurpassed in the history of mankind.”12 For Mills, envisioning an even more concentrated power structure in the
decades ahead, the growth of militarized state capitalism was destined to clash with the requirements of democracy and free
markets, generating a distinctly authoritarian logic. The American behemoth was a product of World War II, when
“the merger of the corporate economy and the military bureaucracy came into its present- day
significance,”13 leading to a deepening convergence of “private” and “public” interests. An eclipse of
democratic citizenship and institutional accountability was, for Mills, to this system. It is a great tribute to Mills that, attuned to the
war economy and security state, he could already write that “ . . . the structural clue to the power elite today lies in
the enlarged and military state” where “virtually all political and economic actions are now
judged in terms of military definitions of reality.”14 In a period of expanded state capitalism today, with corporate
and military interests more entrenched than ever, Mills surely would have found the idea of independent government functions
laughable. And Mills was correct, then and now, for it is hard to conceive of state power operating autonomously relative to the
irrepressible sway of privileged interests. Of course, the power structure that Mills probed in the 1950s has only become more
authoritarian (and global) in the aftermath of several wars, skyrocketing military spending and deployments, a consolidated security
state, and neoliberal globalization.
If American society is structurally and ideologically integrated at the summits of power, this is
no radical break with the past much less the work of conspiratorial forces; it is the product of
merging class and institutional forms of domination congealed across more than two centuries.
By the early twenty- first century Fortune 500 corporations had amassed some 60 percent of total
wealth in the United States, with assets spread across the planet. Such inequality has given
elites, never comprising more than a tiny percentage of the population, considerable insulation from public leverage
and access. American corporations gained hegemony under laissez- faire capitalism during the
nineteenth century, given special legal momentum when the Supreme Court ruled in 1886 that these
enterprises possessed “rights” as “recognized citizens” under the Constitution. With only rudimentary state
regulations and planning, a corporate system driven by the Rockefeller and Morgan empires was able to consolidate its hold over the
economy in the decades before World War I. By the 1930s and 1940s, pushed forward by the New Deal and World War II, the
marriage of government and big business was officially consecrated, remaining intact across subsequent decades. Given its
perpetual growth obsession, its internal hierarchy, its fierce opposition to social reforms, its
ideological uniformity, and its profit- driven agendas, this state- corporate system, contrary to
myth, became a mortal enemy of democracy as its goal was always domination in the service of
freewheeling “private” economic agendas..
The plan is key to reverse the tide – prevents corporate abuses of
public interests
Baker 2013 – Northeastern University School of Law researcher; policy analyst for Global Access Project; (Brook
K, “CORPORATE POWER UNBOUND: INVESTOR-STATE ARBITRATION OF IP MONOPLIES ON MEDICINES –
ELI LILLY AND THE TPP”,
http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1038&context=research&seiredir=1&referer=http%3A%2F%2Fwww.google.com%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Dcorporate%2520power
%2520mexico%2520arbitration%2520nafta%26source%3Dweb%26cd%3D5%26ved%3D0CEQQFjAE%26url%3Dhtt
p%253A%252F%252Fdigitalcommons.wcl.american.edu%252Fcgi%252Fviewcontent.cgi%253Farticle%253D1038%2
526context%253Dresearch%26ei%3DVM7RUdjZLIrFywHpo4CACw%26usg%3DAFQjCNEzM3owmZ0iK_rL34kh7C
QR66qmww%26bvm%3Dbv.48572450%2Cd.aWc#search=%22corporate%20power%20mexico%20arbitration%20n
afta%22 5-1-2013 //SRM)
Although modern investment clauses and investor-state dispute resolution have been with us
since the 1950s, resort to them was limited during their first 50 years when only fifty investorstate claims were filed.12 Investors reserved their claims for those exceptional cases where hard
investments were nationalized or transferred to others without compensation by regimes either
committed to state ownership or captured by crony capitalism. In contrast, since 2001, four
hundred investor-state disputes have been filed. Investors have won nearly $3 billion
from taxpayers in arbitral awards and another $15 billion in claims is pending
under U.S. FTAs and BITs alone.13 Moreover, the average cost of arbitral proceedings is nearly
$8 million, although the Philippines’ tribunal costs and legal costs in a single case exceeded $50
million.14 This sea change in investor-state claims occurred because investors
belatedly realized that not only could they bring claims against banana-republic
confiscations but against emerging economies and even advanced democracies
whenever their unrequited expectations of profits were thwarted by government
regulations, adverse adjudicative decisions, and other state practices. Accordingly, foreign
corporations have used investor-state dispute resolution to challenge a broad array of
environmental and land use laws, government procurement decisions, regulatory permitting,
financial regulations, consumer protection, public health, and public safety laws, and a range of
other public interest policies.15 Claims in extractive industries are common. For example,
Churchill Mining has filed a $2 billion claim against Indonesia relating to its mining
regulations.16 ICSID recently ordered Ecuador to pay Occidental Petroleum $1.77 billion in a
disagreement over an oil concession contract in the largest investor-state award to date. Claims
relating to environmental and public health hazards are also common. One prominent public
health example is the pending arbitral claim against Australia under a 1993 Australia-Hong
Kong bilateral investment treaty brought by an affiliate of Phillips Morris challenging plain
packaging restrictions on tobacco products.17 Phillips Morris is pursuing its 2011 arbitral claim
despite the Australian High Court having confirmed the constitutionality of the Tobacco Plain
Packaging Act of 2011.18 In the infamous Metalclad v. Mexico case, a U.S. toxic waste disposal
firm challenged a Mexican city’s refusal to grant a construction permit for a toxic waste facility
until and unless the firm cleaned up pre-existing toxic waste problems that it knew about when
it purchased the property from a previous polluter. In an earlier instance, Canada reversed an
environmental ban on a gasoline additive MMT, a probable carcinogen, after U.S. Ethyl
Corporation filed a NAFTA investor-state claim against it.
Without the plan, the arbitration system will continue to undermine
the U.S. and Mexico public interest in favor of corporations
Li 2013 – Yale Law School report for Weil, Gotshal,& Manges Roundtable (Sheng, Meng Jia Yeng, Alec Stone
Sweet, “THE INSTITIONAL EVOLUTION OF THE INVESTOR-STATE REGIME: JUDICIALIZATION AND
GOVERNANCE”
http://www.law.yale.edu/documents/pdf/cbl/Stone_Sweet_Lee_and_Yang_Roundtable_Pape
r.pdf March 1 2013//SRM)
This paper charts the development of the Investor-State Arbitration Regime [ISAR], focusing on
the impact of arbitral awards on the construction of arbitral institutions. By institutions, we
mean the corpus of norms – law, customs, standards, procedures, and so on – that enables and
constrains arbitral authority.1 Our primary aim is to assess how and the extent to which
investor-state arbitration [ISA] is evolving capacity to govern, through the arbitral process itself.
As a theoretical matter, we approach this research in two linked ways (Part I). The first is
through the theory of judicialization.2 The theory focuses on the conditions under
which the move to third-party dispute resolution, if sustained, will induce
institutional change, and produce governance. By governance, we refer to the
mechanisms through which the institutions that govern any given community or activity are
adapted to the experiences of those who live under them. The second is through delegation
theory, also known as Principal-Agent [P-A] theory. Arbitral power is, famously, delegated
power. The standard model of international arbitration emphasizes the virtues of freedom of
contract, notably, the contracting parties’ autonomy to choose their own substantive law,
procedures, and judges. In this account, the analyst typically scripts arbitrators as agents of the
contracting parties, creatures of a discrete contract from which arbitrators derive their authority
and legitimacy. The model no longer comfortably fits ISA, if it ever did. Our theory holds that, to
the extent that judicialization proceeds, each arbitral tribunal will be placed under
increasing pressure to take into account interests beyond those of the parties,
strictly considered. These interests may include those of future parties to investorstate disputes, the ISAR, the “public good” as articulated by states or non-governmental
organizations, and even the dictates of (an ever evolving) international economic law. Thus,
empirically, we are interested in tracing and explaining the extent to which
arbitrators become agents not only of the parties, but also of the regime and an
increasingly diverse group of stakeholders. Given that the formal structure of authority
in the ISAR remains relatively non-hierarchical, arbitrators can only generate, and
enhance over time, their capacity to govern through coordination (persuasion), not
command and control.
Ad hoc judges in the current system with conflicts of interest are
responsible for the frequent injustice
Pastor 2001 – former U.S. National Security Advisor on Latin America and the Caribbean, PhD from
Harvard in political science, former U.S. Foreign Policy Fulbright professor at El Colegio de Mexico
(Robert A., “TOWARD A NORTH AMERICAN COMMUNITY: LESSONS FROM THE OLD WAR FOR
THE NEW”, A Proposal to Deepen NAFTA, North American Institutions, 2001 pg. 103//SRM)
The third institution should be the Permanent North American Court on Trade
and Investment. This would also involved upgrading the existing dispute-settlement
mechanism. As we have seen, dispute panels have worked well, but they are running into
problems due to their ad hoc nature. Because panelists are not well paid, it has
proven more and more difficult to locate expert panelists who do not have a
conflict of interest. Moreover, the case law that has accumulated during the past
decade requires an investment of time that few people with out a conflict of
interest would have. This is why the time has come to establish a permanent court
and appoint judges for extended terms. The court must also make its proceedings
public, particularly on NAFTA Chapter 11 suits, because of the controversy that has
swirled around corporate claims that affect environmental or other public
policies. Some narrowing or clarification of the scope of Chapter 11 is also needed to
reestablish the credibility of the panels and to prevent the erosion of environmental rules.
The plan will reduce unfair outcomes for states by having permanent
expert judges
Tamrakar, et. al 2007 – Law Associate at TPM Solicitors & Consultants in New Delhi, degree
from National Law Institute University, former Advocate for Anti-Dumping Practice at TMP Solicitors &
Consultants (Vasudha and Garima Tiwari, “AD HOC AND INSTITUTIONAL ARBITRATION”
http://www.legalserviceindia.com/article/l64-Ad-Hoc-and-Institutional-Arbitration.html 14 Oct
2007//SRM)
Another merit of institutional arbitration relates to selection of the arbitrators. In
institutional arbitration, the arbitrators are selected by the parties from
the institution’s panel of arbitrators. This panel comprises of expert
arbitrators, drawn from the various regions of the world and from
across different vocations. This enables selection of arbitrators
possessing requisite experience and knowledge to resolve the dispute,
thereby facilitating quick and effective resolution of disputes.
Whereas in ad hoc arbitration, the appointment of arbitrators is
generally based on the parties’ faith & trust in the arbitrators and not
necessarily on the basis of their qualifications and experience. Thus,
an incompetent arbitrator may not conduct the proceedings smoothly and
this could delay dispute resolution, lead to undesirable litigation and
increased costs. However, it is pertinent to note that the parties do not appoint
the arbitrators. They only select and nominate the arbitrators for appointment by
the institution, which may refuse to appoint a nominated arbitrator if he lacks the
requisite qualifications or impartiality or independence, in order to avoid its
reputation being tarnished. Consequently, a party whose nominated arbitrator
was refused appointment, being dissatisfied, may turn hostile and refuse to
participate or attempt to stall the arbitration.
Solvency – Corporate Power
Future corporate abuses are on the rise; the plan will protect the state economy
Public Citizen 2013 (“NAFTA’S BROKEN PROMISES 1994-2013: OUTCOMES OF THE NORTH AMERICAN
FREE TRADE AGREEMENT” http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf //SRM)
Corporate demands for taxpayer compensation surge. Foreign corporations have launched
investor- state attacks on a wide array of consumer health and safety policies, environmental
and land-use laws, government procurement decisions, regulatory permits, financial
regulations, and other public interest polices that they allege as undermining “expected future
profits.” The number of investor-state cases has soared over the last decade – in
2011 the cumulative number of launched investor-state cases was nine times the
cumulative investor-state caseload in 2000, even though treaties with investor-state
provisions have existed since the 1950s.63 When the foreign investor wins a case, the
government must hand the corporation an amount of taxpayer money decided by the tribunal as
compensation for the offending policy. There is no limit to the amount of money
tribunals can order governments to pay corporations, and there are very limited
appeal rights. Foreign firms have won more than $340 million taxpayer dollars
thus far in investor-state cases brought under NAFTA. Of the more than $12.3 billion in the 14
claims still pending under NAFTA, all relate to environmental, energy, land use, public health
and transportation policies – not traditional trade issues.64 Investor-state attacks force costly
defense of U.S. policies. Although the U.S. government has had to expend tens of millions in
legal expenses to defend against NAFTA investor-state cases, thanks to technical errors by the
lawyers representing the foreign corporations, the U.S. government has thus far dodged the
bullet of having to pay compensation. For example, in the Loewen vs. U.S. case, a NAFTA
tribunal ruled against the United States on the merits. It concluded that a Mississippi jury’s
requirement that a Canadian funeral home conglomerate follow normal civil procedure rules,
such as posting a bond to appeal a contract dispute it had lost against a U.S. firm, violated
NAFTA investor protections.73 Luckily for U.S. taxpayers, before the compensation phase could
conclude, the Canadian firm’s bankruptcy lawyers reincorporated the firm as a U.S. corporation
under bankruptcy protection. This eliminated Loewen’s status as a foreign investor. When U.S.
state laws are challenged under this system, state governments have no standing and must rely
on the federal government to defend their laws. If states are invited by federal officials to
participate, they must pay their own legal expenses. California has incurred millions in legal
costs helping to defend two state environmental laws – a toxics ban and a mining reclamation
policy – that were challenged under NAFTA.74
The plan will protect the Mexico and the US from foreign investors
PCGTW 2005 – Public Citizens Global Trade Watch (“NAFTA’S THREAT TO SOVEREIGHTY AND
DEMOCRACY: THE RECORD OF NAFTA CHAPTER 11 INVESTORY-STATE CASES 1994-2005” 2005//SRM)
The NAFTA Chapter 11 Loewen case is a prime example of how foreign investors are granted
greater rights than domestic firms. The NAFTA panel in the Loewen case issued a remarkable
jurisdictional ruling indicating that all adverse domestic court decisions are potentially eligible
for NAFTA review as international law violations and may even qualify as “expropriations.” This
ruling implicates court decisions at every level, even potentially those of the U.S. Supreme
Court. In contrast, U.S. firms operating in the United States do not have this second bite at the
apple outside of the domestic court system and cannot bring regulatory takings cases based
upon domestic court rulings. The case in question involved the Loewen Group, a giant Canadian
funeral conglomerate, which had been aggressively acquiring small funeral homes across
America. Loewen attempted to use NAFTA’s foreign investor protections to “reverse” a
multimillion-dollar Mississippi jury’s ruling in favor of a small funeral home operator who sued
the conglomerate for breach of contract and assorted fraudulent acts. Even though the NAFTA
tribunal dismissed Loewen’s underlying claims on technical grounds (primarily due to the fact
that the bankrupt Loewen corporation had reincorporated as a U.S. firm and thus no longer
qualified as a foreign investor), a very different result may have occurred had the firm
reincorporated in Canada. First, the NAFTA panel in this case, determined that under NAFTA’s
terms a jury ruling in a civil contract case qualified as a “government action” against which
foreign investors were granted special NAFTA protections. Attorneys representing the United
States had argued that specific policies or actions of the government affecting a foreign investor
– not the every day function of a domestic court – was what NAFTA’s reference to government
“measures” covered. The panel’s decision further focused on the reference to international law
in NAFTA’s provisions guaranteeing a minimum standard of treatment for foreign investors,
noting that when the conduct of a domestic court does not meet such an international law
standard, a NAFTA violation could be found. Remarkably, the panel failed to place any limits on
the type of domestic court decision that can be challenged using the investor-state mechanism,
except to state that plaintiffs should exhaust domestic court remedies before proceeding to a
NAFTA tribunal. Thus, it is no surprise that the Loewen tribunal decision was greeted with great
concern in U.S. legal circles. The Conference of Chief Justices (representing Chief Justices from
state supreme courts) promptly passed a resolution calling upon the Bush administration to
keep court rulings out of trade tribunals.5 The U.S. Conference of Mayors had earlier issued the
same call, yet CAFTA fails to prevent domestic court rulings from being reheard in
unaccountable investor-state tribunals.
The plan solves for corporate abuses of green jobs
Public Citizen 2013 (“NAFTA’S BROKEN PROMISES 1994-2013: OUTCOMES OF THE NORTH AMERICAN
FREE TRADE AGREEMENT” http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf //SRM)
NAFTA threatens green jobs programs. As governments have come to recognize the
necessity of supporting renewable energy generation and creating green jobs,
corporations have started using NAFTA’s backdoor investor-state system to try to
undermine these policies. In July 2011, U.S.-based Mesa Power, LLC announced that it
would challenge a successful Ontario renewable energy program under NAFTA.69
Under the new program, which has already created more than 20,000 jobs, renewable
energy companies have committed over $20 billion to clean energy investments.70 Michael
Eckhart, President of the American Council on Renewable Energy, called the program part of
“the most comprehensive renewable energy policy entered anywhere around the world.”71
Despite wide praise for this leading effort to combat climate change and support
green jobs, Mesa Power is now using NAFTA to undermine the program and
demand $775 million in taxpayer compensation.72
The plan solves for corporate abuses of the environment
Sierra Club 2013 – one of the oldest grassroots environmental organizations in the U.S. (“RESPONSIBLE
TRADE PROGRAM: THE NORTH AMERICAN FREE TRADE AGREEMENT”
http://www.sierraclub.org/trade/globalization/nafta.aspx //SRM)
The North American Free Trade Agreement (NAFTA), which came into effect on January 1,
1994, required the elimination of most tariffs and other trade barriers on products and services
traded between Mexico, Canada and the United States. While trade agreements have the
potential to promote more sustainable and just development, NAFTA did very little to safeguard
our environment or communities that depend on it. It transferred enormous power from
democratic governments to multinational corporations and faceless global market forces - and
today communities across North America are at greater risk. NAFTA has allowed
environmentally irresponsible companies to continue their offenses outside U.S. borders where
regulations are less stringent or poorly enforced. Health officials are now investigating a link
between the swine flu outbreak and an industrial pig farm in Mexico, run by a subsidiary of the
U.S.-based Smithfield Farms. Smithfield Farms is notorious for its environmental record in the
U.S., having committed 6,900 violations of the U.S. Clean Water Act for dumping hog waste into
a tributary of the Chesapeake Bay. Following passage of NAFTA, the company was able to easily
set-up operations in Mexico, circumventing U.S. regulations that force them to properly treat
hog waste. NAFTA also gave multinational corporations the power to by-pass the
domestic judicial system and directly challenge environmental and public interest
laws in secret tribunals. For example, Dow AgroSciences LLC, a U.S. company, recently filed
a $2 million dollar lawsuit against Canada, in light of Québec's ban on cosmetic lawn pesticides
containing the dangerous chemical, 2, 4-D. The pesticide was banned in Québec due to 2, 4-D's
link to leukemia, respiratory problems, and neurological disorders, among other health-related
problems. However, this move by the Canadian province to protect its citizens from potentially
devastating health problems is now being contested under NAFTA's Chapter 11 investment
provisions. In another example, California's new low-carbon fuel rules (LCFR) may violate
NAFTA's "national treatment" provisions. The LCFR rules require refineries, producers and
importers of motor fuel sold in the state to reduce the "carbon intensity" of their products by 10
percent by 2020. Since synthetic crude from Alberta's oil sands emits more carbon than
conventional oil, the new rules would force those Canadian refiners to produce cleaner oil for
export to California. Since Canadian refiners may need to spend more money than competitors
in order to make their oil clean enough for export to California, Canadian trade officials contend
that the LCFR rules are unfair. This dispute highlights the disconnect between citizens' ability to
fight global warming and current international trade rules outlined in NAFTA. See "NAFTA's
Corporate Investor Rights and Their Threat to the Environment," below. We can do better! In
an increasingly globalized world, global warming and environmental degradation have no
borders, and it is vital that our trade agreements reflect that reality. Trade agreements should
promote a higher quality of life for all, not simply serve as vehicles to increase corporate profits.
We must learn from the failed trade agreements of the past and stake out a different
course for a future where people's lives and livelihoods are protected and respected.
The public currently opposes arbitration procedures that favor
corporate interests over state authority
Groves et. al 2013 – Publications Director for the Washington Sate Labor Council; bachelor’s
degree in journalism from University of Maryland(David, Raul Burbano, Kristin Beifus, and Manuel
Perez-Rocha: “LIKE NAFTA, TPP WOULD HELP CORPORATIONS, BUT NOT PEOPLE” Mar 12 2013
http://www.thestand.org/2013/03/like-nafta-tpp-would-help-corporations-but-not-people/ //SRM)
community and NGO organizations from central and
Latin America are raising their collective voices in opposition to
the TPP. This opposition was solidified at the People’s Summit in Santiago de
Chile — parallel to summit EU-CELAC Summit — this past January where civil society
gathered to express and share their concerns and develop strategies to stop it. They
are calling out the TPP as a ‘tool of disintegration’ in the region because it attempts to
Since our Dec. 1 cross-border action,
destabilize regional processes of integration that challenge the neoliberal model inherent in the TPP. These alternatives include the
Union of South American Nations (UNASUR) and The Community of Caribbean and Latin American States (CELAC), as well as
economic blocs like MERCOSUR and ALBA trading regions. The TPP is seen in Latin America as a second attempt by the United
States to push a Free Trade Area of the Americas (FTAA) in the region with help from countries whose governments are subservient
to the U.S. led neoliberal ideology and “free trade” economics.
Stopping our governments from
doing any more damage with corporate rights pacts like the TPP needs
to be a priority of the peoples of North America. We must demand an alternative,
more equitable and sustainable global trade regime. Trade and investment deals must
respect and promote fundamental environmental rights, indigenous sovereignty, labor
rights, including equal rights for migrant workers and people of color. Communities and local governments need to be able to
actively create high-wage, high-benefit jobs in ways that do not undermine the well-being of our sisters and brothers globally.
Governments must be able to promote democratic public
policies in the public interest without fear of catastrophic
lawsuits in non-democratic and non-transparent investment
tribunals. Free trade creates rich people not rich communities. We have 20 years of
evidence from NAFTA… we don’t want any more. Stop the TPP! Sign the tri-national statement of unity
against the Trans-Pacific Partnership, and to sign-up to be more involved, go to www.tppxborder.org.
The U.S. judicial branch wants to take back power for the state
PCGTW 2005 – Public Citizens Global Trade Watch (“NAFTA’S THREAT TO SOVEREIGHTY AND
DEMOCRACY: THE RECORD OF NAFTA CHAPTER 11 INVESTORY-STATE CASES 1994-2005” 2005//SRM)
The NAFTA Chapter 11 Loewen case is a prime example of how foreign investors are granted
greater rights than domestic firms. The NAFTA panel in the Loewen case issued a remarkable
jurisdictional ruling indicating that all adverse domestic court decisions are potentially eligible
for NAFTA review as international law violations and may even qualify as “expropriations.” This
ruling implicates court decisions at every level, even potentially those of the U.S. Supreme
Court. In contrast, U.S. firms operating in the United States do not have this second bite at the
apple outside of the domestic court system and cannot bring regulatory takings cases based
upon domestic court rulings. The case in question involved the Loewen Group, a giant Canadian
funeral conglomerate, which had been aggressively acquiring small funeral homes across
America. Loewen attempted to use NAFTA’s foreign investor protections to “reverse” a
multimillion-dollar Mississippi jury’s ruling in favor of a small funeral home operator who sued
the conglomerate for breach of contract and assorted fraudulent acts. Even though the NAFTA
tribunal dismissed Loewen’s underlying claims on technical grounds (primarily due to the fact
that the bankrupt Loewen corporation had reincorporated as a U.S. firm and thus no longer
qualified as a foreign investor), a very different result may have occurred had the firm
reincorporated in Canada. First, the NAFTA panel in this case, determined that under NAFTA’s
terms a jury ruling in a civil contract case qualified as a “government action” against which
foreign investors were granted special NAFTA protections. Attorneys representing the United
States had argued that specific policies or actions of the government affecting a foreign investor
– not the every day function of a domestic court – was what NAFTA’s reference to government
“measures” covered. The panel’s decision further focused on the reference to international law
in NAFTA’s provisions guaranteeing a minimum standard of treatment for foreign investors,
noting that when the conduct of a domestic court does not meet such an international law
standard, a NAFTA violation could be found. Remarkably, the panel failed to place any limits on
the type of domestic court decision that can be challenged using the investor-state mechanism,
except to state that plaintiffs should exhaust domestic court remedies before proceeding to a
NAFTA tribunal. Thus, it is no surprise that the Loewen tribunal decision was greeted with great
concern in U.S. legal circles. The Conference of Chief Justices (representing Chief Justices from
state supreme courts) promptly passed a resolution calling upon the Bush administration to
keep court rulings out of trade tribunals. The U.S. Conference of Mayors had earlier issued the
same call, yet CAFTA fails to prevent domestic court rulings from being reheard in
unaccountable investor-state tribunals.
Mexico’s domestic courts lose power with current procedures
GAO 1993 – United States General Accounting Office Report to Congress (“NORTH AMERICAN
FREE TRADE AGREEMENT: ASSESSMENT OF MAJOR ISSUES” September 1993//SRM)
Both the United States and Canada were concerned that Mexico’s different
legal system and traditions might impede the enforcement of NAFTA rules, according to the
1992IIE report. The key concern involved Mexico’s often opaque administrative procedures for
investigations of unfair foreign trade practices, according to this study. Another concern was
that Mexico’s investigations of unfair foreign trade practices did not always provide due process
of law to exporters, a U.S. official added. Finally, Mexico does not currently provide for judicial
review for U.S. exporters. Therefore, if they were to adopt CFTA'S system of binational panel
review for NAFTA, the United States and Canada felt that Mexico’s administrative and judicial
review procedures must equal U.S. and Canadian standards, according to a U.S. official. That is,
according to US. officials, NAFTA exporters should have the same rights in all member
countries. These rights include the opportunity to defend themselves in investigations of unfair
foreign trade practices and the right to appeal administrative decisions in the domestic judicial
system. The negotiators also sought assurances that unanticipated future procedural
changes in any member country would not interfere with the operation of the binational
panels, US. officials said. Such changes may occur in constitutional processes
that prevent the formation or functioning of a binational panel. They
may also occur in legal processes that may cause a country to deny
effective judicial review of the basis for a decision on unfair foreign
trade practices.
Impacts
Corporate abuses of public interests threaten democracy
Powell, et al. 2012 – leader of UC Berkeley’s Haas Diversity Research Center; holds Robert D. Hass Chair in
Equity and Inclusion; Professor of Law; Professor of African American Studies and Ethnic Studies at UC Berkely;
former professor of civil rights, property law, and jurispreduence at University of Minnesota Law School (John A.,
Stephen Menendian, “BEYOND PUBLIC/PRIVATE: UNDERSTANDING CORPORATE POWER” 2012
http://urbanhabitat.org/19-1/powell-menendian //SRM)
The expansion of corporate power represents a threat not only to the public, but to
the private and non-public/non-private spheres as well. In Kelo v. City of New London,
the Supreme Court upheld the condemnation of a stretch of riverfront homes when the sole
purpose of the undertaking was to enable private redevelopment by pharmaceutical giant Pfizer,
Inc. Although not a privatization case, this decision suggests the true function of privatization.
The privatization of public entities or property is not simply a shift from public to private
control; it is a shift from public to corporate. As a heuristic, the public/private dichotomy
fails to capture these shifts in power or account for the consequences. Not only may
corporations collect and store personal information (Google’s “street view project” is one
example), individual privacy and speech rights are often sharply circumscribed in
corporate space. Consider the context of a commercial shopping mall. We may think of that
space as public, but it is not. Not only are there limited privacy rights free from surveillance,
First Amendment rights are also limited and there is virtually no right to organize or petition.
Meanwhile, the Tea Party would shield and protect the discretion of corporate prerogatives from
the government under the banner of free markets, while remaining silent regarding the
exclusion and oppression of the ”private sector.” The unbridled exercise of corporate
rights and prerogatives threatens our democratic process as well as “discrete and insular
minorities.” It is our view that the market, banks and corporations should exist to serve people,
as they were originally intended to do, not the other way around. Neither Adam Smith nor the
founders of the nation subscribed to a faith in the intrinsic beneficence of corporate interests for
the nation. On the contrary, they feared the concentration of economic power just as they feared
the concentration of political power. Who inhabits the circle of human concern? Some might
argue that the poor, unemployed, gays, immigrants, and Muslims do not belong as full members
of our democracy. On the other hand, many in the Tea Party movement and jurists, such as
Chief Justice Taney, would argue that corporations do belong and enjoy constitutional privileges
and rights. Along with the Occupy Wall Street Movement, we reject this position. We could draw
the circle of inclusion and belonging liberally, but it would not include corporations. The
public/private dichotomy is a false one that obscures what is at stake and blinds us to the
separate corporate sphere. Despite the position of the Court and well-known politicians,
corporations are neither people nor citizens. They do not belong in the traditional public or
private space, but inhabit their own space. Our position is not anti-corporate. Rather, we call
for a proper alignment of corporations in a liberal democracy. Corporations make
good servants, but bad masters. To realize this realignment will require a transformative wave of
individual, judicial and legislative actors. Our goal is not to eliminate corporations, but to build
an inclusive democracy with a sustainable economy of shared responsibility and prosperity. This
is the unfinished dream of America.
{Note: WE ARE LOSING THE ABILITY OF OUR LAWS TO PROTECT THE PUBLIC – that is
the most important thing!}
The democracy in Mexico is already being damaged by the drug war
Edmonds-Poli 2013 – Associate Professor of international relations and Latin American politics for 12 years;
PhD in Political Science from University of California, San Diego (Emily, “THE EFFECTS OF DRUG-WAR RELATED
VIOLENCE ON MEXICO’S PRESS AND DEMOCRACY”
http://www.wilsoncenter.org/sites/default/files/edmonds_violence_press_0.pdf April 2013//SRM
The Mexican government’s multi-year war against drug trafficking and criminal organizations
has had many unintended effects. One of them is that Mesxico has become the most dangerous
country in the Western Hemisphere for journalists. As a percentage of the total drug war-related
deaths, deaths of journalists and media workers make up a very small number, yet their
significance is undeniable. Not only do they contribute to the country’s overall
insecurity, the deaths also threaten the quality of Mexico’s democracy by
mitigating the freedom of expression. In this sense, they are truly the “eyes and ears of
civil society.” Both freedom of expression and access to alternative sources of information, two
functions of an independent press, are essential for democracy because they allow citizens to be
introduced to new ideas, engage in debate and discussion, and acquire the information they
need to understand the issues and policy alternatives. In other words, freedom of expression
and information are essential for civic competence and effective participation.1 Furthermore, an
independent press is indispensable for monitoring government activity. Without it, citizens may
never learn about their leaders’ accomplishments and transgressions, thus compromising their
ability to punish, reward or otherwise hold politicians accountable for their actions. Violence
against journalists compromises Mexicans’ right to free expression, which is guaranteed to all
citizens by articles 6 and 7 of the 1917 Mexican Constitution, and has also limited the
independence and effectiveness of the national press.2 These developments
simultaneously are linked to and exacerbate Mexico’s already weak rule of law,
and the threat they pose to the quality of Mexican democracy should not be
understated. The purpose of this report is to outline the scope of the problem, assess the
causes and consequences of violence against journalists, and evaluate the response by Mexico’s
government and society. It also offers some policy recommendations for national and
international actors.
We need to keep corporations in check
Moore, 96 (Richard K., political scientist, “The Fateful Dance of Capitalism & Democracy,”
September-October, New Dawn, http://quaylargo.com/rkm/ND/sep96FatefulDance.shtml,
Accessed 07-14-08)
The fact is that the modern nation state is the most effective democratic institution mankind has been able to come up with since
outgrowing the small-scale city-state. With all its defects and corruptions, this gift from the Enlightenment -the national
republic -is the only effective channel the people have to power-sharing with the elites. If the
strong nation-state withers away, we will not -be assured -enter an era of freedom and prosperity,
with the "shackles of wasteful governments off our backs". No indeed. If you want to see the future -in which
weak nations must deal as-best-they-can with mega-corporations -then look at the Third World. The last thing you see in ThirdWorld countries is freedom and prosperity. What you in fact see are governments which increasingly specialize in two functions:
suppressing the population, on the one hand, while on the other hand they negotiate with the international financial community and
corporate investors. When all nations have been whittled down and made weak, then the world will
have become essentially a patchwork of plantation-states. We'll have a neo-feudal system where
the corporate elite act as a kind of global royalty, extracting tribute from all the little competing
nation-fiefdoms. There is a brief window of opportunity -while modern democracies continue to survive -in which the people
can wake up and peacefully seize control of their governments. After those governments have been
devolved/downsized, it will be too late. And with modern weaponry under the command of the
elite, there will be no possibility of the people arising anew in revolution. If the people in any of the little
fiefdoms try it, they'll be dealt with as Iraq has been in the Gulf War and its aftermath. It won't be nice to mess with Earth Inc!
Preservation of strong national sovereignty in the modern democracies is the rock-bottom
foundation needed by the people -without it democracy will without doubt disappear from the world.
The affirmative is the only way to solve the economy – without control
neoliberal companies will destroy the economy
de Graaff and van Apeldoorn ’10 (Nana, and Bastian, both from VU University in
Amsterdam, “Varieties of US Post-Cold War Imperialism: Anatomy of a Failed Hegemonic
Project and the Future of US Geopolitics,” Critical Sociology 37(4) 403– 427, AM)
However, as the 20th century came to a close the contradictions and limits of the neoliberal
globalization project became increasingly manifest. In particular we identify the following sets of contradictions.
First, within different national state-society complexes, and arguably above all in the USA (see Harvey, 2003: 15–17),
neoliberalism – as it promotes the commodification of everything, bringing more and more areas of social
life under the discipline of markets and of capital – tends
to engender an atomization and social disintegration
to such an extent as to undermine the social order that sustains capital accumulation.
Increasingly this has engendered awareness, also on the part of various elites, that these centrifugal forces somehow have to be
contained. Second, and related to this fundamental social contradiction, since the end of the 1990s the political limits of
neoliberalism have increasingly manifested themselves. What increasingly amounted to a transnational revolt against the discipline
imposed by neoliberal globalization – or what Harvey (2003: 162–180) calls resistance against ‘accumulation by dispossession’ –
takes on many different shapes and identities: from Hugo Chavez’s Bolivarian revolution; to the alter-globalization movement, and
arguably also to some forms of radical political Islam. The transnational hegemony of neoliberalism has been
weakening as a result. Thus Van der Pijl (2006: 405) is probably right in arguing that ‘[t]he neoliberal
programme of the West, run aground across the globe, but tenaciously pursued
nevertheless, has conjured up its own nemesis, which instills fear into ruling classes’. We may
add here that the US ruling class in particular has reason to be the most fearful, as it has the most to lose. Third, neoliberal
globalization produces new geo-economic and geopolitical tensions as the dynamics of global
capital accumulation shift the centre of gravity of the global economy away from the Atlantic and
towards the Pacific. This historic shift may be seen as the price of the success of the very project of neoliberal globalization
and how it has spread capitalist growth beyond the capitalist heartland. As described by both Arrighi (2005) and by Harvey (2003)
the global process of endless capital accumulation, with US capital in the lead since the early 20th century,
involves a process of constant geographical expansion as (surplus) capital needs to find new
profitable outlets, especially in order to overcome capitalism’s chronic tendency to produce crises of
over-accumulation. However, as Harvey explains, his ‘spatial fix’ as a way to resolve capitalism’s inner
contradictions only reproduces these contradictions on a bigger geographical scale,
as the export of capital creates ‘new spaces of capital accumulation [that] will ultimately
generate surpluses and will seek ways to absorb them through geographical expansions’ (Harvey,
2003: 120). Whereas the capitalist growth generated by US capitalist expansion in such regions as Western Europe and Japan has
not led to a successful challenge to US hegemony, arguably the more recent rise of East Asia, and especially
China (Arrighi, 2005: 74–80) is of a different order, and has created rival centres of accumulation
threatening the geopolitical and geo-economic preeminence of the US. The above outlined social, political
and geopolitical contradictions and tensions became apparent before the manifestation of arguably the most fundamental
contradiction of neoliberalism, which is that its finance-led accumulation strategy has produced enormous riches for a global rentier
class that has effectively restored capitalist class hegemony under its leadership (Duménil and Levy, 2001), but is ultimately unable
to sustain capitalist accumulation in the longer run. But, although with the burst of the dot com bubble and the
subsequent recession, the limits of financialization became visible already shortly after the turn of the
millennium, it was still at that time most of all the political project of neoliberalism – rather than its
underlying accumulation strategy – that had entered into a hegemonic crisis (cf. Paul, 2007). It is this hegemonic
crisis, we argue, that enabled the rise of an alternative hegemonic project.
Corporations’ expansion will lead to conflict in the Arctic if it
continues unregulated
Klare 12 (Michael T, Five Colleges professor of Peace and World Security Studies, whose
department is located at Hampshire College, defense correspondent of The Nation magazine.
The Race for What’s Left, Metropolitan Books, 2012, pg 93-99)
As the major energy corporations have moved deeper and deeper into the Arctic in their search
for new reserves of oil and natural gas, national governments have also started paying more
attention to this region, according it greater weight in their strategic calculations than ever
before. This, in turn, has brought to the forefront several long-simmering boundary disputes in
the Arctic and has raised new questions about the ownership of the polar region itself. Such
boundary disputes were considered of only minor importance when the Arctic was thought to
possess little of economic value, but now that the region is believed to hold nearly one-fifth of the world’s remaining
untapped hydrocarbon resources they have acquired far greater significance. All of the five countries with a presence
in the Arctic—Canada, Denmark (through its control of Greenland), Norway, Russia, and the United States—are
reaffirming their historic claims in the area and taking fresh action to protect their interests
there. In this manner the Arctic, long ignored by most major political actors, has become a new
hotspot of geopolitical friction.71 As we have seen, Artur Chilingarov’s planting of the titanium Russian flag on the North
Pole seabed in 2007 provoked a particularly sharp set of reactions from the regional powers. Chilingarov made clear that his
expedition was not merely an attention-grabbing stunt, but part of an effort to gather evidence for Moscow’s contention that the
entire territory belongs to Russia.72 Chilingarov’s remarks led many foreign officials to strongly repudiate the Russian claim and
reassert their own countries’ interests in the area. Soon, every nation with an Arctic presence was hurrying to announce that it would
protect its interests there by any means necessary.73 Such pugnacious statements have generated a flurry of
alarmist headlines, suggesting the onset of a major arms race in the greater Arctic region. Although
none of the more frightening scenarios have yet come to pass, both Canada and Russia have indeed continued to
bolster their military capabilities in the Arctic. In August 2011, for example, Canada conducted elaborate military
exercises at its new Arctic training base at Resolute Bay, and in the following month Prime Minister Vladimir Putin announced a
subtantial buildup of Russia’s border security in the Arctic region.74 However, neither country has chosen to deploy armed forces to
the region in any significant numbers—a reflection, no doubt, of the great cost of maintaining combat troops in the extreme northern
latitudes. All of the regional powers have also been cooperating with one another in scientific and safety matters under the auspices
of the Arctic Council, an intergovernmental forum established in 1996 to address matters of common concern.75 Still, while
armed conflict in the Arctic appears highly unlikely at present, none of the major Arctic
countries have surrendered their claims to disputed territories. To a considerable degree, then, the
geopolitics of the Arctic region will be shaped by the outcome of disputes over contested international boundaries.76 Some of these
disputes are relatively straightforward disagreements over the exact borders of two adjoining Arctic states. Alaska, for example,
shares maritime boundaries with Russia and with Canada, neither of which is entirely settled. The U.S. dispute with Russia can be
traced back to the original acquisition of Alaska from the czarist empire: though the 1867 purchase agreement mentions a U.S.Russia maritime border in the Bering and Chukchi Seas, no official maps have been preserved from that transaction, and the precise
location of the dividing line was never fully determined. To rectify this situation, the United States and the USSR agreed on a
common boundary in 1990, but the Soviet Union fell apart shortly thereafter and Russia’s new leadership has challenged the accord,
saying that it unfairly deprives Russia of 15,000 square miles of offshore territory that may harbor valuable oil and gas deposits. At
present, the treaty remains in limbo: while considered legitimate and enforceable by the U.S. government, it still awaits ratification
by the Russian parliament.77 The U.S. dispute with Canada, meanwhile, involves the exact location of the maritime boundary at
Alaska’s northeast corner. Canada claims that the boundary should simply extend the Alaska-Yukon border straight north into the
Beaufort Sea; the United States, however, says that the maritime border should be perpendicular to the slanting coastline at that
point, which would make it veer slightly to the east. (In either case, the line would extend 200 nautical miles to the outer extent of
each country’s exclusive economic zone.) The discrepancy between these two border definitions creates a wedge of about 8,300
square miles that is claimed by both nations. Because this wedge lies adjacent to known oil and natural gas deposits in both
countries, neither Canada nor the United States has shown any willingness to compromise on the matter.78 Canada also faces a
territorial dispute with Denmark regarding the Nares Strait, which separates Canada’s Ellesmere Island from the northwest coast of
Greenland. In 1973, Canada and Denmark settled the location of almost their entire mutual boundary in the waters off Greenland—
except for the question of Hans Island, a small speck of rock in the Nares Strait that is claimed by both nations. Although neither
country has any interest in Hans Island itself, by owning it they would also gain control over a large body of surrounding water,
which is thought to sit atop potentially valuable deposits of oil and natural gas.79 In addition to such bilateral disagreements, all five
of the Arctic powers—Canada, Denmark, Norway, Russia, and the United States—are also party to a complex debate over ownership
of the central Arctic Ocean and its seabed. This dispute arises from ambiguities in international law regarding rights to semienclosed bodies of water like the Arctic. In general, most legal experts have viewed the Arctic Ocean as an international waterway,
open to navigation by all; various historical claims to portions of the Arctic—for instance, the 1926 declaration by Moscow that the
entire area between the Soviet landmass and the North Pole belonged to the Soviet Union—are currently regarded as far-fetched.
Under the United Nations Convention on the Law of the Sea, however, coastal nations may lay claim to the seabed on their outer
continental shelf—and all of the Arctic states are in the process of doing so.80 The UNCLOS regulations, as we have seen, allow
member states to claim ownership of the “natural prolongation” of their continental shelf, even if it extends beyond their EEZ; this is
the clause that Argentina has cited in the Falklands/Malvinas dispute and that China wants to apply in the East China Sea. In the
case of the Arctic Ocean, similarly, both Denmark (acting for Greenland) and Russia have declared that their respective continental
shelves incorporate the Lomonosov Ridge, an undersea geological crease that transects the Arctic from northern Greenland to
eastern Siberia. If either country were to prove that the ridge is, in fact, an extension of its landmass, it could theoretically
monopolize the exploitation of valuable hydrocarbon resources in northern Arctic waters —especially as global warming makes polar
drilling more feasible. Denmark has already conducted scientific surveys to establish that the Lomonosov Ridge stretches out from
Greenland; Chilingarov’s descent to the North Pole seabed, likewise, was intended in part to obtain geological evidence showing that
the Lomonosov is an extension of Russian territory. Both countries have submitted the results of their investigations to the
Commission on the Limits of the Continental Shelf, a body created by UNCLOS to verify such claims. However, it could be many
years before the commission reaches a judgment—and even then, it is unclear whether the parties involved will accept the outcome if
it goes against their perceived interests.81 At present, all of the Arctic powers insist that they are determined to settle these
territorial disputes through peaceful means. One positive omen came in April 2010, when Russia and Norway resolved a longrunning debate about the Barents Sea border between the two countries by agreeing to compromise on a line lying exactly halfway
between their two competing claims. For the most part, however, the Arctic nations have shown little inclination
to terminate outstanding disputes, so the risk of geopolitical conflict will persist . Indeed, as global
temperatures rise and it becomes easier to extract hydrocarbons from northerly waters, international tensions are likely to grow. “It
is no coincidence that our strategic interest in the Arctic warms with its climate,” said Admiral James Stavridis, commander of the
U.S. European Command, on the eve of a recent NATO workshop on Arctic security affairs. “For now, the disputes in the north have
been dealt with peacefully, but climate change could alter the equilibrium over the coming years.”82 In its way, the risk of military
conflict in the Arctic is yet another on the long list of dangers posed by global warming. Stavridis’s comments make it clear that the
risk of international friction and conflict over Arctic resources cannot be entirely dismissed. For the near future, however, the
greatest obstacles to resource exploitation in the region are likely to be geography, climate, cost, and the environment. As we have
seen, all of the major projects currently under way or in the process of development above the Arctic Circle face enormous challenges
of one sort or another and will require enormous investments to succeed. Global warming may improve the attractiveness of
operating in the Arctic, by shrinking the polar icecap and lengthening drilling seasons, but it will also generate new problems of its
own, such as an increased number of dangerous icebergs, that will slow the pace of development. Despite these risks, however, there
is every indication that the major energy companies will persist in their drive to exploit the alluring hydrocarbon resources of the Far
North. With few other places to turn to, they are wagering ever greater sums in the development of these reserves. Progress may be
gradual during the current decade, but the efforts are bound to gain momentum in the 2020s, as fields below the Arctic Circle
become increasingly depleted. Political leaders may worry about the many environmental risks involved, yet feel compelled to allow
increased Arctic drilling in order to satisfy national energy needs. The artificial islands now being built by BP in the Beaufort Sea will
soon have company, as more and more human outposts appear above the Arctic Circle in a desperate drive for new supplies of oil
and gas.
Corporations drive for monopoly leads them to destroy agriculture
Ehrenfeld ‘5 (David, Dept. of Ecology, Evolution, and Natural Resources @ Rutgers
University, “The Environmental Limits to Globalization”, Conservation Biology Vol. 19 No. 2
April 2005)
Among the many other environmental effects of globalization, one that is both obvious and
critically important is reduced genetic and cultural diversity in agriculture. As the
representatives of the petrochemical and pharmaceutical industries’ many subsidiary seed
corporations sell their patented seeds in more areas previously isolated from global trade,
farmers are dropping their traditional crop varieties, the reservoir of our accumulated genetic
agricultural wealth, in favor of a few, supposedly high-yielding, often chemical-dependent seeds.
The Indian agricultural scientist H. Sudarshan (2002) has provided a typical example. He noted
that, “Over the last half century, India has probably grown over 30,000 different, indigenous
varieties or landraces of rice. This situation has, in the last 20 years, changed drastically and it is
predicted that in another 20 years, rice diversity will be reduced to 50 varieties, with the top 10
accounting for over three-quarters of the sub-continent’s rice acreage. With so few varieties left,
where will conventional plant breeders and genetic engineers find the genes for disease and pest
resistance, environmental adaptations, and plant quality and vigor that we will surely need? A
similar loss has been seen in varieties of domestic animals. Of the 3831 breeds of ass, water
buffalo, cattle, goat, horse, pig, and sheep recorded in the twentieth century, at least 618 had
become extinct by the century’s end, and 475 of the remainder were rare. Significantly, the
countries with the highest ratios of surviving breeds per million people are those that are most
peripheral and remote from global commerce (Hall & Ruane 1993). Unfortunately, with
globalization, remoteness is no longer tenable. Here is a poignant illustration. Rural Haitians
have traditionally raised a morphotype of long- snouted, small black pig known as the Creole
pig. Adapted to the Haitian climate, Creole pigs had very low maintenance requirements, and
were mainstays of soil fertility and the rural economy. In 1982 and 1983, most of these pigs were
deliberately killed as part of swine disease control efforts required to integrate Haiti into the
hemispheric economy. They were replaced by pigs from Iowa that needed clean drinking water,
roofed pigpens, and expensive, imported feed. The substitution was a disaster. Haitian peasants,
the hemisphere’s poorest, lost an estimated $600 million. Haiti’s ousted President JeanBertrand Aristide (2000), who, whatever his faults, understood the environmental and social
effects of globalization, wrote, “There was a 30% drop in enrollment in rural schools... a
dramatic decline in the protein consumption in rural Haiti, a devastating decapitalization of the
peasant economy and an incalculable negative impact on Haiti’s soil and agricultural
productivity. The Haitian peasantry has not recovered to this day. . .. For many peasants the
extermination of the Creole pigs was their first experience of globalization. The sale of Mexican
string beans and South African apples in Michigan and Minnesota in January is not without
consequences. The globalization of food has led to the introduction of “high-input” agricultural
methods in many less-developed countries, with sharply increasing use of fertilizers,
insecticides, herbicides, fungicides, irrigation pumps, mechanical equipment, and energy. There
has been a correspondingly sharp decline in farmland biodiversity—including birds,
invertebrates, and wild crop relatives—much of which is critically important to agriculture
through ecosystem services or as reservoirs of useful genes (Benton et al. 2003). The
combination of heavy fertilizer use along with excessive irrigation has resulted in toxic
accumulations of salt, nitrates, and pesticides ruining soils all over the world, along with the
dangerous drawdown and contamination of underground reserves of fresh water (Hillel 1991;
Kaiser 2004; Sugden et al. 2004). Although population growth has been responsible for some of
this agricultural intensification, much has been catalyzed by globalization (Wright 1990).
Aquaculture is another agriculture-related activity. Fish and shellfish farming—much of it for
export—has more than doubled in the past 15 years. This industry’s tremendous requirements
for fish meal and fish oil to use as food and its degradation of coastal areas are placing a great
strain on marine ecosystems (Naylor et al. 2000). Other unanticipated problems are occurring.
For instance, the Scottish fisheries biologist Alexander Murray and his colleagues (2002) report
that infectious salmon anemia. . . is caused by novel virulent strains of a virus that has adapted
to intensive aquacultural practices and has exploited the associated [ship] traffic to spread both
locally and internationally.... Extensive ship traffic and lack of regulation increase the risk of
spreading disease to animals raised for aquaculture and to other animals in marine
environments. . .. [and underscore] the potential role of shipping in the global transport of
zoonotic pathogens.
Neoliberalism allows companies to have a monopoly on food
production, this drive for profits ensures agriculture failure
The Thistle 2k (The Thistle, publication of MIT, Volume 13, Number 2: Sept./Oct., 2000.,
The IMF and the WORLD BANK: Puppets of the Neoliberal Onslaught,
http://www.mit.edu/~thistle/v13/2/imf.html)
The power of the IMF becomes clear when a country gets into financial trouble and needs funds to make payments on private loans.
Before the IMF grants a loan, it imposes conditions on that country, requiring it to make structural changes in its economy. These
conditions are called ‘Structural Adjustment Programs’ (SAPs) and are designed to increase money flow into the country by
promoting exports so that the country can pay off its debts. Not surprisingly, in view of the dominance of the G7 in IMF policy
making, the SAPs are highly neoliberal. The effective power of the IMF is often larger than that associated with the size of its loans
because private lenders often deem a country credit-worthy based on actions of the IMF. The World Bank plays a qualitatively
different role than the IMF, but works tightly within the stringent SAP framework imposed by the IMF. It focuses on development
loans for specific projects, such as the building of dams, roads, harbors etc that are considered necessary for ‘economic growth’ in a
developing country. Since it is a multilateral institution, the World Bank is less likely than unilateral lending institutions such as the
Export Import Bank of the US to offer loans for the purpose of promoting and subsidizing particular corporations. Nevertheless, the
conceptions of growth and economic well being within the World Bank are very much molded by western corporate values and rarely
take account of local cultural concerns. This is clearly exhibited by the modalities of its projects, such as the ‘Green Revolution’ in
agriculture, heavily promoted in the third world by the World Bank in the sixties and seventies. The
‘Green Revolution’
refers to the massive industrialization of agriculture, involving the replacement of a multitude of
indigenous crops with a few high-yielding varieties that require expensive investments of
chemicals, fertilizers and machinery. In the third world, the ‘Green Revolution’ was often imposed on
indigenous populations with reasonably sustainable and self sufficient traditions of rural
agriculture. The mechanization of food production in third world countries, which have a large
surplus labor pool, has led to the marginalization of many people, disconnecting them from the
economy and exacerbating wealth disparity in these countries. Furthermore, excessive chemical
agriculture has led to soil desertification and erosion, increasing the occurrence of famines . While
the ‘Green Revolution’ was a catastrophe for the poor in third world countries, western chemical corporations such as
Monsanto, Dow and Dupont fared very well, cashing in high profits and increasing their control over
food production in third world countries. Today, the World Bank is at it again. This time it is
promoting the use of genetically modified seeds in the third world and works with governments
to solidify patent laws which would grant biotech corporations like Monsanto unprecedented
control over food production. The pattern is clear, whether deliberate or nor, the World Bank
serves to set the stage for large trans-national corporations to enter third world countries,
extract large profits and then leave with carnage in their wake. While the World Bank publicly emphasizes
that it aims to alleviate poverty in the world, imperialistic attitudes occasionally emerge from its leading figures. In 1991, then chief
economist Lawrence Summers (now US Secretary of the Treasury) wrote in an internal memo that was leaked: Just between you and
me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs [less developed countries]? ... The
economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that ...
Under-populated countries in Africa are vastly under-polluted; their air quality is probably vastly inefficiently low compared to Los
Angeles or Mexico City .... The concern over an agent that causes a one-in-a-million chance in the odds of prostate cancer is
obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-five
mortality is 200 per thousand. And thistle thought that the World Bank tried to extend lives in developing countries, not take
advantage of low life expectancy.
Climate leadership is impossible when there are no incentives under
neoliberalism to get on board with efforts to combat climate change.
Von Werlof 8 (Claudia von-Werlhof is prominent writer and academic, Professor of
Women’s Studies and Political Science at the University of Innsbruck, Austria. “The
Consequences of Globalization and Neoliberal Policies. What are the Alternatives?,” February 1,
2008, This text is based on a panel presentation together with Ferdinand Lacina, former
Austrian Minister of Finance and Ewald Nowotny, President of the BAWAG-Bank during the
“Dallinger Conference”, AK Wien, November 21, 2005, http://www.globalresearch.ca/theconsequences-of-globalization-and-neoliberal-policies-what-are-the-alternatives/7973)
It becomes obvious that neoliberalism marks not the end of colonialism but, to the contrary, the colonization of the North. This new
“colonization of the world” (Mies 2005) points back to the beginnings of the “modern world system” in the “long 16th century”
(Wallerstein 1979, Frank 2005, Mies 1986), when the conquering of the Americas, their exploitation and colonial transformation
allowed for the rise and “development” of Europe. The so-called “children’s diseases” of modernity keep on haunting it, even in old
age. They are, in fact, the main feature of modernity’s latest stage. They are expanding instead of disappearing. Where there is no
South, there is no North; where there is no periphery, there is no center; where there is no colony, there is no – in any case no
“Western” – civilization (Werlhof 2007a). Austria is part of the world system too. It is increasingly becoming a corporate colony
(particularly of German corporations). This, however, does not keep it from being an active colonizer itself, especially in the East
(Hofbauer 2003, Salzburger 2006). Social, cultural, traditional and ecological considerations are
abandoned and give way to a mentality of plundering. All global resources that we still have –
natural resources, forests, water, genetic pools – have turned into objects of “utilization”. Rapid ecological
destruction through depletion is the consequence. If one makes more profit by cutting down
trees than by planting them, then there is no reason not to cut them (Lietaer 2006). Neither the
public nor the state interferes, despite global warming and the obvious fact that the clearing of
the few remaining rain forests will irreversibly destroy the earth’s climate – not to even speak of the
many other negative effects of such action (Raggam 2004). Climate, animal, plants, human and general
ecological rights are worth nothing compared to the interests of the corporations – no matter that the
rain forest is no renewable resource and that the entire earth’s ecosystem depends on it. If greed – and the rationalism with which it
is economically enforced – really was an inherent anthropological trait, we would have never even reached this day. The commander
of the Space Shuttle that circled the earth in 2005 remarked that “the center of Africa was burning”. She meant the
Congo, in which the last great rain forest of the continent is located. Without it there will be no more rain clouds above the sources of
the Nile. However, it needs to disappear in order for corporations to gain free access to the Congo’s
natural resources that are the reason for the wars that plague the region today. After all, one needs
petrol, diamonds, and coltan for mobile phones. The forests of Asia have been burning for many years too, and in late 2005 the
Brazilian parliament has approved the clearing of 50% of the remaining Amazon. Meanwhile, rumors abound that Brazil and
Venezuela have already sold their rights to the earth’s biggest remaining rain forest – not to the US-Americans, but to the
supposedly “left” Chinese who suffer from chronic wood shortage and cannot sustain their enormous economic growth and
economic superpower ambitions without securing global resources. Given today’s race for the earth’s last resources, one
wonders what the representatives of the World Trade Organization (WTO) thought when they accepted China as a
new member in 2001. They probably had the giant Chinese market in mind but not the giant Chinese competition. After
all, a quarter of the world’s population lives in China. Of course it has long been established that a further expansion of the Western
lifestyle will lead to global ecological collapse – the faster, the sooner (Sarkar 2001). Today, everything on earth is turned into
commodities, i.e. everything becomes an object of “trade” and commercialization (which truly means “liquidation”: the
transformation of all into liquid money). In its neoliberal stage it is not enough for capitalism to globally pursue less
cost-intensive and preferably “wageless” commodity production. The objective is to transform everyone and
everything into commodities (Wallerstein 1979), including life itself. We are racing blindly towards the violent and absolute
conclusion of this “mode of production”, namely total capitalization/liquidation by “monetarization” (Genth 2006).
Neoliberal rationality that is entirely devoid of ethics, collective
awareness, and capacity for resistance
Hamman 9 (Trent H., St. John’s U, Neoliberalism, Govern mentality, and Ethics, Foucault
Studies No6 Feb 2009)
Within the apparatus (dispositif)11 of neoliberalism every individual is considered to be “equally
unequal”, as Foucault put it. Exploitation, domination, and every other form of social inequality is
rendered invisible as social phenomena to the extent that each individual’s social condition is
judged as nothing other than the effect of his or her own choices and investments. As Wendy Brown
has pointed out, Homo economi- cus is constructed, not as a citizen who obeys rules, pursues common goods, and addresses problems it shares with others, but as a rational and calculating entrepreneur who is not only capable of, but
also responsible for caring for him or herself.12 Brown points out that this has the effect of “depoliticizing social
and economic powers” as well as reducing “political citizenship to an unprecedented degree of
passivity and political complacency.” She writes: The model neoliberal citizen is one who strategizes for her- or himself
among various social, political, and economic options, not one who strives with others to alter or organize these options. A fully
realized neoliberal citizenry would be the opposite of public-minded; indeed, it would barely
exist as a public. The body politic ceases to be a body but is rather a group of individual
entrepreneurs and consumers . . . (E, 43). Within this practically Hobbesian (anti-)social landscape the
”responsibility” of in- dividuals constitutes a form of market morality13 understood as the
maximization of economy through the autonomous rational deliberation of costs and benefits
fol- lowed by freely chosen practices. Neoliberal subjects are constituted as thoroughly
responsible for themselves and themselves alone because they are subjectified as thoroughly
autonomous and free. An individual’s failure to engage in the requisite processes of
subjectivation, or what neoliberalism refers to as a “mismanaged life” (E, 42), is consequently due to the moral
failure of that individual. Neoliberal ratio- nality allows for the avoidance of any kind of
collective, structural, or governmental responsibility for such a life even as examples of it have been on the
rise for a num- ber of decades. Instead, impoverished populations, when recognized at all, are often treated as ”opportunities” for
investment.14
Unchecked corporate power results in a loss of VTL and extinction
Boggs 11 (Carl Boggs, Ph.D. Political Science, University of California, Berkeley, “Phantom Democracy: Corporate Interests and
Political Power in America. New York”, Page 94-96, Palgrave Macmillan, 2011. EBL.)
As the political culture moves ever rightward—and as corporate power is further liberated to
carry out its exploitation, fraud, criminality, and propaganda—Democrats become less distinguishable
from Republicans, even as the latter scream about a descent into “socialism” or “communism” at
the first glimpse of social reforms. President Obama’s failure to pursue a liberal agenda should
therefore come
as little surprise to careful observers of the American political scene. Corporate power
exercises such enormous leverage over the political system, as we have seen, that no occupant of
the White House nowadays can hope to chart an independent course; presidential autonomy is a myth.
Tariq Ali, in The Obama Syndrome, writes that “A modern American president—Republican or Democrat—operates
as the messenger- servant of the country’s corporations, defending them against their critics and ensuring that
no obstacles are placed in their way.”95 The decision by Obama to immediately staff his administration
with Wall Street insiders and Pentagon hawks should have been predictable enough. Ali points out that,
“In reality, Barack Obama is a skillful and gifted machine politician who rapidly rose to the top. Once that is understood there is little
about him that should surprise anyone: to talk of betrayal is foolish, for nothing has been betrayed but one’s illusions.”96
Despite its stated hostility to bureaucracy, centralized power, and big government, therefore,
American conservatism (consistent with longstanding liberal- capitalist practice) embellishes precisely the
opposite—incessant expansion of corporate, military, and governmental power. In the United
States, the permanent war system has established a momentum hard to reverse. As Cornell West
concludes in his Democracy Matters, reflecting on this trend: “In short, we are experiencing the sad imperial devouring of American
democracy.”97
Superficial tropes about free markets, limited government, and citizen participation today have
little if any policy repercussions. Integrated power at the summit constricts politics and deflates
citizenship, reflected in the corporate takeover of virtually every facet of governance; power
resides largely outside the sphere of elections, parties, and legislation, especially at the national
level. Traditional ideologies have grown increasingly stale and irrelevant. If corporate power decisively shapes the
flow of capital, natural resources, commodities, information, and technology, its reach mostly
escapes the orbit of parties and elections.98 If the oligopolistic tendencies analyzed by Weber and
Michels—and later Mills—persist many decades later, we should not be astonished to encounter a political
culture of phantom discourses, rife with illusions and fantasies, and inclined toward citizen passivity,
resignation, and cynicism—all signs of a social order in precipitous decline. As we have seen, the Obama
presidency might well do more to hasten, than to arrest or delay, this downward historical trajectory
State power is needed to protect public interests, like health, from the
goals of profit-seeking corporations
Elias 2004 – masters degree in journalism from Stanford Univesrity, 3-time Pulitzer Prize nominee for distinguished commentary;
author on 3 books about medical law, former Associated Press writer, former professor at 4 Cal State universities (Thomas D.,
“REVISE AMERICAN PROTECTIONS BEFORE EXPANDING NAFTA”//SRM)
who
focus on the unquestioned phenomenon of jobs moving from America to Mexico
as companies exploit cheap labor there. This is dangerous enough, especially if it's your job
that's migrating south to a land where wages are a fraction of what anyone could survive on in this country. But there's also
a threat that NAFTA might destroy something else that's at least as important - the right of states
and cities to protect the health and well-being of their citizens. No function of government
MOST complaints about the North American Free Trade Agreement come from workers and politicians on the campaign trail
could be more important than that; yet, NAFTA may soon allow foreign companies to limit what governments can do for their
in a $970 million claim brought against the
United States and California by the Methanex Corp. of Vancouver, British Columbia,
the Canadian parent company of the largest American maker of the gasoline additive MTBE (methyl tertiary
butyl ether). The additive is mostly gone from California gasoline, the result of a
2001 executive order by ex-Gov. Gray Davis, who acted when it
people. Those are the very high stakes
became clear that MTBE, which probably helps cause cancer in those
exposed to it, was fouling California's drinking water in many locations. Most MTBE
that's in water supplies from Lake Tahoe to the Southern California underground water table got there because of leaky gasoline
station tanks. The additive has mostly been replaced in California gasoline by corn-based ethanol, another controversial chemical
because it can have some ill effects on air quality and lead to gasoline price increases. But the ethanol issues don't matter to
Methanex. The company is simply concerned with its losses, which it estimates
at almost $1 billion in vanished California business. The firm claims
NAFTA's investor rights provisions - written into the treaty mostly to protect American firms investing in Mexico and Canada allow any corporation in a participating country to sue the federal government of a host country when there's the
California's near-ban on
MTBE does more than just threaten the profits of Methanex. It has cost the firm heavily. Methanex has
precedent on its side as it sues. In 1998, the U.S.-based Ethyl Corp. sued Canada over
its health-based ban on another fuel additive called MMT. Ethyl charged the
Canadian ban "expropriated' future profits and damaged the company reputation. Canada caved: Rather than risk a
possibility that a government policy or state or local law threatens investors.
NAFTA court judgment that could have amounted to $250 million, Canada gave up on its MMT ban. So much for
health, when money is at stake. At least no one is seriously talking about bringing back MTBE just to keep Methanex from
collecting a billion or so bucks. But it's also true that no one knows what the federal government might do to a state or local
government if a NAFTA tribunal - made up of two lawyers chosen by the disputing parties and one who's supposedly impartial assessed a big penalty against the national administration over actions by a single state, city or county. There apparently is a conflict
between established American law and the NAFTA treaty. While the U.S. Supreme Court has often held that the impact of
regulations protecting the public are "the burdens we must all bear' as the price of "doing business in a civilized community,' NAFTA
has no such limitations. Methanex "only sought to sue in a NAFTA tribunal' after it concluded it had no hope to win anything in any
American court, the firm says. A preliminary decision favoring California's action on technical grounds came down in 2002, left
Methanex the right to continue suing on grounds it was discriminated against. The fact that ethanol is by no means simon-pure even though its harm is to air, not water - might be grounds for a believable discrimination claim. It's all still rather murky, but this
much is clear: Before there's any expansion of NAFTA to other countries, as sought by President Bush, the provisions that
prevent elected American officials from protecting their citizens have to be revised. If that means the other countries
also get to place restrictions on U.S. firms, so be it. Maybe this would even discourage some companies
from moving American jobs to low- wage foreign locales.
Solvency – Transparency
Our plan will will restore transparency, which is key to dispute
resolution
Johnson et. al 2011 – Senior Legal Researcher in Investment Law and Policy for Vale Columbia Center
on Sustainable International Investment; former legal consultant for International Institute for Sustainable
Development; former fellow at Center for International Environmental Law (Lise, Nathalie Bernasconi-Osterwalder,
Feb 2011 “TRANSPARENCY IN THE DISPUTE SETTLEMENT PROCESS: COUNTRY BEST PRACTICES
http://www.iisd.org/pdf/2011/transparency_dispute_settlement_processes.pdf //SRM)
An arbitral dispute between a state and an investor of another state (an investor-state dispute)
raises public interest issues not typically present in a commercial arbitration between two or
more private parties. For example, investor- state disputes always involve allegations that the
respondent government acted wrongly. Investor-state disputes can also involve
challenges to important government laws and regulations, such as those
protecting the environment and health, addressing social welfare issues,
governing the provision of essential services, and regulating the use of natural
resources. The disputes can also have significant financial impacts on the public
purse and taxpayers. Yet, despite the differences between investor-state arbitrations and
arbitrations between two private parties, both commonly use the same sets of procedural rules.
Consequently, investor-state arbitrations, drawing from the confidential nature of private
commercial arbitration, often lack transparency and provide no opportunity for public
participation. This contrasts with the much more open nature of international dispute
settlement in other commercial and non-commercial areas where government conduct is at
issue, including at the World Trade Organization (WTO), the International Court of Justice
(ICJ) and in human rights bodies. In many instances, it is difficult or impossible even to know
that an investor-state dispute has been initiated, what the issues and arguments are and what
decisions or awards have been made to resolve the matter. This lack of transparency, in turn,
has several negative impacts. For one, it weakens the perceived legitimacy of the investor-state
dispute settlement system, and the decisions rendered under it. Moreover, it can facilitate the
issuance of decisions that are not well reasoned, an outcome that has especially significant
implications given that awards are greatly insulated from recourse or judicial review. Further, it
prevents the public, states and investors from being able to assess what the obligations set forth
in investment agreements actually mean in practice. Additionally, it creates tension
between the investor-state dispute settlement system and the public’s rights to
information. These rights to information are recognized under the domestic laws of many
countries and also under international human rights law as shown, for example, by the decision
of the European Court of Human Rights in the Hungarian Civil Liberties Union case (Társaság a
Szabadságjogokért v. Hungary, Judgment of April 14, 2009), which elaborates upon on the
right to receive information of public interest and the scope of governments’ obligations not to
impede flow of that information. Concern about the lack of transparency in investor-state
arbitration has been mounting over roughly the past decade, tracking the rise of treaty-based
investor-state arbitration itself. Indeed, treaty-based investor-state arbitration is a fairly recent
phenomenon; the first case was only decided in 1990. It was then with the first cases under the
investment chapter (Chapter 11) of the North American Free Trade Agreement (NAFTA) in the
mid-to-late 1990s that it became clear that the typically confidential nature of private
arbitrations was not appropriate for investor-state disputes of public interest. In 2001, as a step
toward increasing the transparency of NAFTA investor-state arbitrations, the parties to that
agreement issued an interpretative note specifying that nothing in Chapter 11 itself precluded a
NAFTA party from providing public access to documents submitted to or issued by Chapter 11
tribunals. The interpretative note also set forth the NAFTA parties’ agreement to make such
documents available to the public in a timely manner, subject to certain exceptions, including
for the protection of confidential business information and where disclosure would be
prohibited under applicable arbitral rules.1 In bilateral investment treaties (BITs) and free trade
agreements (FTAs) concluded by the NAFTA parties subsequently, the countries have gone even
further to ensure openness of investor- state dispute settlement by including provisions on
transparency directly in the treaties (as opposed to interpretative notes).
The current system restricts transparency
Public Citizen 2001 – nonprofit organization founded 1971 in Washington, D.C. (“NAFTA
CHAPTER 11 INVESTOR-TOO-STATE CASES: BANKRUPTING DEMOCRACY – LESSONS FOR FAST TRACK AND
THE FREE TRADE OF THE AMERICAS” 2001 http://www.citizen.org/documents/ACF186.PDF//SRM)
Moreover, while many of the early ICSID cases involved private contractual disputes, there has
been a recent explosion in cases brought under investment agreements. The first case under a
Bilateral Investment Treaty was brought in 1987, and of the 36 total cases brought under
investment treaties, 30 have been brought since the beginning of 1997. The arbitration process
in ICSID cases is a closed and unaccountable one. Arbitral tribunals for ICSID cases are
appointed on a case-by-case basis, and there is no requirement for the arbitrators to have served
in any similar capacity before. Most strikingly, the parties to the case generally appoint the
members of the tribunal, a system that may be suited for private contractual disputes, but not
for public policy issues. Most often, including under NAFTA, the investor and the country
involved each appoint one arbitrator, and the two initial arbitrators then choose a third who
serves as the presiding arbitrator. If the parties can't agree on a third arbitrator, the ICSID
Secretary-General can choose the third from an ICSID "panel" of arbitrators appointed by
member countries. ICSID provides only minimal information to the public about cases.22 ICSID
only posts on its website basic information such as parties, date of complaint and arbitrators
and does not post documents in the course of the proceeding. In addition, there is no provision
for amicus participation by outside interested parties, and there is no standard appeals process
such as that found in domestic courts.23 The almost complete lack of transparency and
public participation in ICSID, combined with the vast powers of tribunals to grant
an infinite amount of taxpayer dollars to corporations that successfully bring NAFTA
suits, raise questions as to whether it is an appropriate venue for the arbitration of
such significant issues of public concern. The UNCITRAL process is even more closed and
unaccountable than that of ICSID. UNCITRAL is the United Nations Commission on International Trade
Law. It adopted a set of Arbitration Rules in 1976 that parties from any country can use.24 Since neither
Mexico nor Canada are members of the ICSID Convention, any NAFTA investor rights cases in which both
parties are from these two countries must be brought under the UNCITRAL rules. Any other Chapter 11
dispute can also be brought under UNCITRAL. The UNCITRAL rules for the arbitration proceedings
themselves are very much like those of ICSID, including the rules for the selection of arbitrators.
However, unlike ICSID, UNCITRAL only provides a set of rules and does not have a webpage for NAFTA
cases; it does not even have a professional staff to provide any administrative oversight for arbitration
proceedings. It does not collect or compile final decisions and therefore cannot make them available to the
public. In fact, UNCITRAL does not collect and therefore does not make public even basic information
about pending and concluded cases. The history of cases brought under its rules is not known.25
Furthermore, since UNCITRAL has no staff to oversee cases, there is no provision for the review of
tribunal decisions. The UNCITRAL rules do not even provide for revision of a decision when significant
new facts emerge. Thus, the process under UNCITRAL provides even less transparency and public
participation than under the ICSID rules. A case can proceed under UNCITRAL rules for years without
the public being aware that it exists. As the cases described in detail in this report demonstrate , this
closed-door process has benefitted foreign investors to the detriment of the public interest.
US-Mexico Key
US trade agreements should let nations set their own priorities,
rather than be undermined by private companies
Kevin Gallagher and Timothy Wise guardian.co.uk, Thursday 7 January 2010 17.00
EST
In a welcome move, President Obama's US trade representative, Ron Kirk, has made a new
year's resolution to craft "a new kind of trade agreement for the 21st century." Those were the
words he used in hisletter to congressional leaders notifying them of the administration's intent
to negotiate the Trans-Pacific partnership agreement (TPP), a proposed eight-country trade deal
with countries as diverse as New Zealand, Chile and Vietnam.
The trade pact would be the largest US endeavour since the North American Free Trade
Agreement (Nafta) was signed between Canada,Mexico and the US. Kirk is yet to unveil many
specifics, but a 21st century trade agreement that brings growth, stability, and prosperity to the
US and its trading partners will have to abandon the out-dated Nafta-model.
This month is the 16th anniversary of Nafta coming into force, so the agreement is now old
enough to be tried as an adult. In the US, the agreement is blamed for job losses, for adding
downward pressure on wages, particularly in manufacturing, and for contributing to a large US
trade deficit. In Canada, critics point to job losses, the declining competitiveness of the
manufacturing sector, and the constraints Nafta has put on Canada to deploy adequate policies
for public welfare.
As we detail with Mexican economist Eduardo Zepeda in a new report,Rethinking Trade Policy
for Development: Lessons from Mexico Under Nafta, the agreement has shown slow growth,
weak domestic investment, anaemic job creation, and increased economic vulnerability –
decimating many existing sources of livelihood, particularly in agriculture. Mexico's economic
performance is now among the worst in the hemisphere. In all three countries, legal scholars
and government officials decry the capability granted for foreign investors to sue governments if
legislation negatively affects their profits or expected profits.
Kirk told the Washington International Trade Association he expected the TPP to "serve as a
model for the future of American trade." NAFTA's shortcomings should guide the
administration's efforts to chart a new course for US trade.
Earlier this year Boston University's Frederick Pardee Centre hosted some of North America's
Nafta experts from Mexico, Canada, and the US – which included the two of us – to form a task
force to offer an ambitious set of proposals for improving on the Nafta model. The subsequent
report, The Future of North American Trade Policy: Lessons from Nafta, did applaud Bush-era
changes to the US trade template for making minor but significant modifications in some
labour, environmental and intellectual property provisions that were later reflected in US-Peru
free trade agreement.
More forcefully, the task force noted that those Bush-era reforms do not go deep enough to fix
the flaws in Nafta and establish a template for a 21st century trade agreement. The report offers
proposals for fixing provisions on labour, agriculture, investment, services, intellectual property
and the environment. It also discusses development finance and migration.
A key recommendation by the task force is that any 21st century trade agreements should not
elevate the rights of private firms over governments and should provide safeguard measures to
make sure nations can adequately address financial, environmental and development-related
challenges. Currently, US trade agreements allow private companies to undermine national
efforts to regulate for the public interest. Under current rules, it is not clear that proposals for
financial regulatory reform, climate change mitigation or poverty alleviation would be allowed
under trade agreements because they could be construed as "tantamount to expropriation," as
not providing a stable regulatory environment, or simply because some agreements don't
provide safeguards for public welfare provisions.
Nafta offers lessons for future agreements, but what about North America? President Obama
should also make good on his promise to fix Nafta as well. Canada and Mexico are the US's first
and third biggest trading partners and account for more than one quarter of total US trade. Key
to revitalizing Nafta would be a reforming the rules and invigorating the North American
Development Bank to help address the pre-existing development asymmetries among Nafta
partners that have only been accentuated by the agreement. Nafta should not merely serve as a
pilot project for other, less economically important, trade agreements. Nafta's failures in Mexico
have direct repercussions in theUnited States, be it migration, the drug trade or weak demand
for US exports.
It is welcome news that the administration has picked 2010 to chart a new course for US trade
policy. It is clear that a 21st century trade agreement should not look like Nafta. Neither should
Nafta.
Coordination between NAFTA is key to US Mexico economy
Hufbauer and Schott 07 (Gary Clyde Hufbauer, Professor of International Finance and
Director of ILaw at Georgetown; currently works for the US treasury organizing international
trade and investment; Jeffrey J. Schott, senior research staff at Georgetown and member of the
Trade and Environment Policy Advisory Committee of the US government, “Recommendations
for North American Economic Integration”, October 2007,
https://mail.google.com/mail/ca/u/0/#inbox/13f2b0c7788bf2e8)
Nonetheless, closer cooperation on monetary policy among the three NAFTA countries would be
desirable. To that end, we recommend that the Federal Reserve Board of Governors invite
representatives of the Banco de Mexico and the Bank of Canada to participate in its key meetings—those where interest rate decisions are made—on a nonvoting basis. Reciprocal invitations
should be forthcoming from the Banco de Mexico and the Bank of Canada. At the same time, the
NAFTA partners could usefully coordinate their approaches to the regulation of financial
services. Mexico has experienced a series of bank failures, while the collapse of Enron, Arthur
Andersen, Global Crossing, and WorldCom, followed by a string of Wall Street and CEO
scandals, starkly revealed the seamy underside of US finance. Canada has a cumbersome
capital-market regulatory regime, which is run by the provinces.27 Mexico and the United States
are both well along on their own cleanup acts, but more could be done in a North American context. In Canada, the trend toward harmonized securities regulation among the provinces is long
overdue. A single national system would help even more.28 North American regulatory task
forces should exchange views on the re- form of accounting standards and corporate
governance. They could pro- vide a voice for convergent regulation of banks, insurance
companies, securities firms, pension funds, mutual funds, and other asset management
companies throughout North America. Mutual recognition of standards for issuing securities
should command greater support, particularly in the Securities and Exchange Commission.29 If
the NAFTA members agreed in principle to mutual recognition of federal standards, but not
state or provin- cial standards, it would give a useful push to rationalization of the Cana- dian
system.30
Solvency
1ac
Ad hoc panels fail – conflicts of interest and unqualified judges
Pastor 2001 – former U.S. National Security Advisor on Latin America and the Caribbean, PhD from
Harvard in political science, former U.S. Foreign Policy Fulbright professor at El Colegio de Mexico
(Robert A., “TOWARD A NORTH AMERICAN COMMUNITY: LESSONS FROM THE OLD WAR FOR
THE NEW”, A Proposal to Deepen NAFTA, North American Institutions, 2001 pg. 103//SRM)
The third institution should be the Permanent North American Court on Trade
and Investment. This would also involved upgrading the existing dispute-settlement
mechanism. As we have seen, dispute panels have worked well, but they are running into
problems due to their ad hoc nature. Because panelists are not well paid, it has
proven more and more difficult to locate expert panelists who do not have a
conflict of interest. Moreover, the case law that has accumulated during the past
decade requires an investment of time that few people with out a conflict of
interest would have. This is why the time has come to establish a permanent court
and appoint judges for extended terms. The court must also make its proceedings public,
particularly on NAFTA Chapter 11 suits, because of the controversy that has swirled around
corporate claims that affect environmental or other public policies. Some narrowing or
clarification of the scope of Chapter 11 is also needed to reestablish the credibility of the panels
and to prevent the erosion of environmental rules.
A stable panelist pool is key to fairness in adjudication
Hufbauer, 05- (Gary, “NAFTA Revisited: Achievements and Challenges”, published on October 15, 2005, by
Institute for International Economics, Chapter 4,
http://www.piie.com/publications/chapters_preview/332/04iie3349.pdf)//NG
We think the place to start is with an agreed roster of panelists who would serve on all NAFTA
cases for a period of six years. The roster might, for ex- ample, have 30 names (10 nominated by
each country) from which five ar bitrators would be selected in each case, whether it arises
under Chapters 11, 14, 19, or 20 or involves labor or environmental questions. Just as federal judges hear a wide range of
civil and criminal cases, panelists with a broad range of experience in international economic law can be selected. To attract qualified
panelists, the NAFTA Secretariat should match the ICSID rate of about $2,400 per day. The big advantage of a single
roster is that once panelists are named to a roster, they can be disqualified only on highly
specific grounds (e.g., conflict of interest). Time delays in choosing panelists will be reduced,
and panelists are more likely to know one an- other, cultivating a certain degree of “judicial
collegiality.”168¶ Second, NAFTA partners need to establish a joint funding pool to cover costs for proceedings, travel, and
panelist fees. Canada maintains a per- manent staff of 8 to 15 persons and an annual budget of more than $2 mil- lion. Mexico has 7
to 16 staff and an annual budget between $1 and $2 mil- lion. By contrast, the United States has 3 staff members and an average
budget of about $1 million. Part of the problem is that the US Section on NAFTA is buried in the International Trade Administration
(ITA) of the US DOC and lacks a separate line item in the budget. The chronic lack of funding in the US section causes Canada and
Mexico to reimburse about 50 percent of the panel costs. To resolve this disparity in funding levels, and to raise the profile of the US
commitment to NAFTA, James R. Hol- bein, former US secretary at the NAFTA Secretariat, has recommended that the US section
be assigned its own line item in the budget, funded with at least $3 million annually, have at least 6 staff members, and report
directly to the secretary of commerce (not through the ITA) (Holbein 2004).
Ad hoc committees create confusion and prevent dispute resolution
Hufbauer, 05- (Gary, “NAFTA Revisited: Achievements and Challenges”, published on October 15, 2005, by
Institute for International Economics)//NG
The dizzying mix of ad hoc NAFTA arbitration panels and standing committees
(featuring six dispute settlement processes) if nothing else blurs the public image of NAFTA
adjudication. In some cases, such as Chapter 20 hearings, the practice of nonbinding advisory opinions
was intended to leave ultimate interpretation of NAFTA obligations in the hands of national authorities.
In other cases, supposedly binding arbita tion has not resolved long-running disputes because
they were just too big—particularly the marathon battles involving Mexican trucking and
Canadian softwood lumber. This led Canadian Prime Minister Paul Mar- tin to complain that “we’ve
got to find a way that disputes can not only be settled, but be settled permanently.”96 On the other
hand, NAFTA crit- ics charge that Chapter 11 was a giveaway to foreign investors, citing $13 billion of
claims filed, even though Chapter 11 awards to date amount to only $35 million.
Ad Hoc System Bad
Current Panel Process Creates Delays- Empirics Prove
Hufbauer, 05- (Gary, “NAFTA Revisited: Achievements and Challenges”, published on October 15, 2005, by
Institute for International Economics, Chapter 4,
http://www.piie.com/publications/chapters_preview/332/04iie3349.pdf)//NG
Yet there is some concern that, without a permanent roster of panelists, the NAFTA dispute
settlement process might be subject to delay. Accord- ing to Eric J. Pan (1999), during 1994–99, the
Chapter 19 dispute settlement mechanism took an average 502 days, and the Canadian Court of
In- ternational Trade and US Federal Circuit took a combined average 1,210 days to resolve
disputes. David A. Gantz (1999) also notes that inattention to Chapter 19 proceedings by NAFTA
governments has led to endemic delay.68 For example, in 1999, 6 of 11 active Chapter 19 cases were
suspended during the proceedings, sometimes for more than six months.69¶ Elliot Feldman (2004)
contends that, in the past few years, deliberate delay by the US government has made Chapter 19
proceedings slower on average than the Canadian Court of International Trade. Feldman notes
that missed deadlines are often the norm and there are no effective penal- ties to curb delay. As a
result, some Canadian producers are turning to the Canadian Federal Court of Appeal and the US Court of
International Trade to adjudicate disputes, because they see Chapter 19 as too costly and lengthy. 70¶ The
Chapter 20 dispute settlement mechanism emphasizes consulta- tions, good offices, conciliation, and
mediation over arbitration. Most Chapter 20 disputes have been resolved during the prepanel stage. Compared with other dispute settlement chapters, the flexible nature of Chap- ter 20 is a liability because
delays in the panel selection process only drag out politically sensitive issues—such as the
Mexico-US trucking dispute and disagreements over Mexican sugar exports.71
The current system conflicts with Mexico’s legal system and threatens
future financial injustice
GAO 1993 – United States General Accounting Office Report to Congress (“NORTH AMERICAN
FREE TRADE AGREEMENT: ASSESSMENT OF MAJOR ISSUES” September 1993//SRM)
Both the United States and Canada were concerned that Mexico’s different
legal system and traditions might impede the enforcement of NAFTA rules, according to the
1992IIE report. The key concern involved Mexico’s often opaque administrative procedures for
investigations of unfair foreign trade practices, according to this study. Another concern was
that Mexico’s investigations of unfair foreign trade practices did not always provide due process
of law to exporters, a U.S. official added. Finally, Mexico does not currently provide for judicial
review for U.S. exporters. Therefore, if they were to adopt CFTA'S system of binational panel
review for NAFTA, the United States and Canada felt that Mexico’s administrative and judicial
review procedures must equal U.S. and Canadian standards, according to a U.S. official. That is,
according to US. officials, NAFTA exporters should have the same rights in all member
countries. These rights include the opportunity to defend themselves in investigations of unfair
foreign trade practices and the right to appeal administrative decisions in the domestic judicial
system. The negotiators also sought assurances that unanticipated future procedural
changes in any member country would not interfere with the operation of the binational
panels, US. officials said. Such changes may occur in constitutional processes
that prevent the formation or functioning of a binational panel. They
may also occur in legal processes that may cause a country to deny
effective judicial review of the basis for a decision on unfair foreign
trade practices.
The current system lacks official arbitration procedures
GAO 1993 – United States General Accounting Office Report to Congress (“NORTH AMERICAN
FREE TRADE AGREEMENT: ASSESSMENT OF MAJOR ISSUES” September 1993//SRM)
NAFTA is unique among trade agreements because it (1) contains a
comprehensive regime for settling disputes between foreign investors and host governments;
and (2) promotes
the use of arbitration and other forms
of alternative dispute
resolution for international commercial disputes
between private parties
in the free trade area, although it does not
prescribe or establish arbitration procedures.
International trade
agreements have generally concentrated on removing government barriers
to trade in goods and services. Disputes between private parties
traditionally have been
outside the scope of trade agreements.
The current system restricts the right to appeal panel decisions
GAO 1993 – United States General Accounting Office Report to Congress (“NORTH AMERICAN
FREE TRADE AGREEMENT: ASSESSMENT OF MAJOR ISSUES” September 1993//SRM)
NAFTA provides for consultations and binding arbitration to settle disputes between
private foreign investors and host governments. Each NAFTA country shall provide that
investor-state arbitration awards can be enforced through its domestic courts. However, legal
analysts say that NAFTA fails to set limits on (1) the time period for resolving investorstate disputes and (2) the disputants’ ability to appeal arbitration decisions.
Status quo is too risky for economy
Franck 2007 – Assistant Professor of Law at University of Nebraska-Lincoln; former Visiting
Associate Professor at the University of Minnesota Law School (Susan D. “FOREIGN DIRECT
INVESTMENT, INVESTMENT TREATY ARBITRATION, AND THE RULE OF LAW”
http://www.mcgeorge.edu/Documents/Conferences/JUDIND_FRANK_MASTER.pdf 2007//SRM)
Governments, including the United States, have increasingly found themselves subjected to claims under investment treaties.
Sometimes governments successfully defend claims, but at other times they lose. When
governments promise investors substantive rights and a forum for vindicating violations of
those rights, governments create risks. Those risks relate to the waiver of sovereign immunity, litigation risk
associated with the possible need to defend against investor claims, and the possibility of ultimate liability. The defense of a
treaty claim may require governments to spend millions of dollars. Nevertheless, expending financial
resources may be necessary (or at least economically efficient) since a single government measure may lead to
claims worth billions of dollars. Should an investor be successful, a government may have to pay damages associated
with the claim, and it may be politically or economically expedient to defend the claim— particularly as awards within the
past decade have ranged from approximately $500,000 to $18 million to $75 million to $270
million. As the risk related to granting these rights becomes more quantifiable, which highlights the
significance of the risk, a movement has begun to assess the significance of the benefit of investment
treaties by considering whether investment treaties actually achieve the desired objective of
promoting foreign investment.
NACTI Good
A permanent court will CUT COSTS that the US and Mexican
governments are forced to pay to educate private companies about
arbitration procedures
GAO 1993 – United States General Accounting Office Report to Congress (“NORTH AMERICAN
FREE TRADE AGREEMENT: ASSESSMENT OF MAJOR ISSUES” September 1993//SRM)
NAFTA is the first U.S. trade agreement that treats the resolution of purely private
international commercial disputes. In support of this provision, an advisory committee will
report to the commission on alternative dispute resolution procedures in the free trade area.
According to a U.S. official, these provisions were intended to encourage the development and
use of alternative dispute resolution mechanisms. Successful use of these procedures could
avoid complaints by private parties that they cannot obtain rapid, reliable, and fair adjudication
of their disputes in local courts, a U.S. trade official said. NAFTA states that each
country is to facilitate the use of arbitration for international private commercial disputes, but
does not prescribe or establish arbitration procedures. According to a U.S. official, to fulfill the
U.S. obligation under this NAFTA provision, DOC [Department of Commerce] may
establish outreach programs to educate US. businesses on arbitration. These programs
would include training on how to write arbitration clauses into
commercial contracts and how to seek arbitration through private
international forums, as well as providing information on other
alternatives to litigation.
A permanent court will have more qualified judges and reduce the
risk of unfair outcomes
Tamrakar, et. al 2007 – Law Associate at TPM Solicitors & Consultants in New Delhi, degree
from National Law Institute University, former Advocate for Anti-Dumping Practice at TMP Solicitors &
Consultants (Vasudha and Garima Tiwari, “AD HOC AND INSTITUTIONAL ARBITRATION”
http://www.legalserviceindia.com/article/l64-Ad-Hoc-and-Institutional-Arbitration.html 14 Oct
2007//SRM)
Another merit of institutional arbitration relates to selection of the arbitrators. In
institutional arbitration, the arbitrators are selected by the parties from
the institution’s panel of arbitrators. This panel comprises of expert
arbitrators, drawn from the various regions of the world and from
across different vocations. This enables selection of arbitrators
possessing requisite experience and knowledge to resolve the dispute,
thereby facilitating quick and effective resolution of disputes.
Whereas in ad hoc arbitration, the appointment of arbitrators is
generally based on the parties’ faith & trust in the arbitrators and not
necessarily on the basis of their qualifications and experience. Thus,
an incompetent arbitrator may not conduct the proceedings smoothly and
this could delay dispute resolution, lead to undesirable litigation and
increased costs. However, it is pertinent to note that the parties do not appoint
the arbitrators. They only select and nominate the arbitrators for appointment by
the institution, which may refuse to appoint a nominated arbitrator if he lacks the
requisite qualifications or impartiality or independence, in order to avoid its
reputation being tarnished. Consequently, a party whose nominated arbitrator
was refused appointment, being dissatisfied, may turn hostile and refuse to
participate or attempt to stall the arbitration.
Say Yes
NAFTA renegotiation is popular with all three countries
Carlsen 09
[Laura Carlsen. Director, Americas Program, Center For International Policy.
Obama Reaffirms Promise to Renegotiate NAFTA. January 12, 2009.
http://www.huffingtonpost.com/laura-carlsen/obama-reaffirms-promiset_b_157316.html. //SRSL]
Not only is
renegotiation permitted legally -- in fact, any country can unilaterally withdraw with six months
notice -- but there have been many calls for renegotiation in Canada and Mexico .
The mainstream press is wrong when it says the United States can't "unilaterally" call for renegotiation.
Canadians have built a strong grassroots movement to protect natural resources from predatory NAFTA clauses. Broad-based citizen
groups like the Council of Canadians oppose NAFTA because of the energy proportionality clause that requires Canada to export oil
to the United States even in times of scarcity, the investor-state clauses that give investors the right to sue governments contained in
Chapter 11, and the clause that permits bulk-water exports.
Polls in the general population show that
61% favor renegotiation . In Mexico, 100,000 people marched in the streets on two separate
occasions under the banner of renegotiation to revise NAFTA's agricultural provisions. They
demanded protection of basic food production by removing corn and beans from the agreement. In 2003, former President Vicente
Fox requested opening up the agreement only to be rebuffed by the U.S. government. For the United States, the main
issue is jobs. Senator Sherrod Brown, an Ohio Democrat, cites a loss of 200,000 manufacturing
jobs due to NAFTA for his state alone. The nation has lost 3.1 million manufacturing jobs since
1994, and its trade deficit with Mexico and Canada has risen to $138.5 billion in 2007 from $9.1
billion in 1993. The opposition to NAFTA within the United States goes well beyond organized
labor. While job loss and insecurity under globalization were major constituency-builders in
blue-collar states during the elections, polls taken before the election revealed that a national
majority opposes free trade and particularly NAFTA, and that opinion increased during the
campaign. A June 2008 Rasmussen nationwide poll showed 56% in favor of
renegotiating NAFTA . Many people feel that NAFTA has given companies incentives to
move production to where labor is cheaper, exporting jobs and eroding working conditions.
A2 Canada Key
The United States and Mexico need to revise NAFTA - Canada not key
Hufbauer and Schott 7 (Gary Clyde Hufbauer, Peterson Institute for International Economics
and Jeffrey J. Schott, Peterson Institute for International Economics) “NAFTA Revisited” Published in Policy Options,
October 2007. <http://www.iie.com/publications/papers/paper.cfm?ResearchID=898> Accessed June 25, 2013
NAFTA was state of the art when negotiated in the early 1990s. Fifteen years later, the pact could benefit from
renovation, for three reasons:
 Important items were excluded from NAFTA coverage (including some farm
products, energy investment in Mexico, rules on subsidies and dumping, and
migration).
 Several NAFTA provisions were poorly constructed and should be recast
(including rules of origin, labor and environmental side accords, and
some dispute settlement procedures and definitions).
 New conditions have emerged that were not on the radar screen of the original NAFTA draftsmen—
importantly security concerns and electronic commerce.
In other words, despite a decade of progress, the three NAFTA partners still have a lot of work. Melding the security and economic
objectives of the three countries will require large doses of political will and diplomatic skill.
To take full advantage of NAFTA’s opportunities, Mexico
must invest heavily to redress its own
energy shortages and to upgrade its roads, ports, telecommunications
networks, and public services. This would create better opportunities for economic
development in the poorer regions of southern Mexicoand this and the
international competitiveness of Mexicans would increase curbing the
“Mexico cost” that weighs heavy industries.
Canada has fewer shortcomings. While the nation is still riding on a natural resource boom, however, the
government should reform the corporate tax system (one of the world’s most burdensome), and invest heavily in hard and soft
infrastructure to better integrate Canadian merchandise and people in the North American economy.
The United States needs to streamline its security measures for cargo and travelers on both the
northern and southern borders. Closer cooperation on security initiatives is essential to ensure
efficient flows of goods and people. Resolving the trucking dispute with Mexico will be an essential
component of the larger security agenda.
Canada and Mexico agree on revisions, only US required
Campos 10 (Yvonne Reyes Campos ) Canada, Mexico Agree on NAFTA Revisions“ November 23, 2010
<http://www.banderasnews.com/1011/nz-nafta23.htm>
At the 16th Canada-Mexico Interparliamentary
Meeting, legislators from both countries agreed
there is a need to bolster the North American Free Trade Agreement (NAFTA). Since its inception in 1994, it has
presented great advantages in competitiveness for both nations. The legislators also spoke in favor of a revision to
the agreement.
Alberto Juraidini Rumilla, an Institutional Revolutionary Party (PRI) Deputy, said that the NAFTA does not represent a risk for the
competitiveness of Mexico because there is a clause in the document which deals with that issue. Canada and Mexico will
work together to strengthen the region in regards to other economic regions which have a stronger competitiveness agenda.
Canadian legislator, Randy Hoback, pointed out that the NAFTA has been very beneficial for the region. However, he
spoke in favor of revising the document in regard to fields which were not considered at the time
of its creation. “Although the NAFTA was a successful agreement back in ‘94, there were many things that were not considered.
For instance, no progress was made in regard to the elimination of bureaucracy and certain rules,” added Hoback.
Canada will approve plan
FAIT 2003 – Standing Committee on Foreign Affairs and International Trade, House of Commons,
Parliament of Canada, 37th Parliament, 2nd Session (“CONCLUSION: THE COMMITTEE’S VISION FOR
ADVANCEING CANADA’S OBJECTIVES IN NORTH AMERICA”, September 30,2002-November
12,2003//SRM)
Nonetheless, the Committee believes that creative ideas should be explored for more regular and
intensive trilateral relationships among the three countries, and that Canada should lead in
proposing specific steps that could be taken in the next few years to build up that trilateral
dimension of the North American partnership. To this end, we recommend:




approaching the United States and Mexico to establish a more formal
intergovernmental North American cooperation framework that would support
meetings at the heads-of-government level at least annually and also more
regular meetings of foreign ministers and other ministers dealing with matters of
common North American concern;
considering a number of initiatives to further parliamentary interaction on a
trilateral basis and, in conjunction, occasional forums for the public discussion of
North American issues that would include, besides parliamentarians, a broadly
representative range of participants from the three countries;
supporting the creation of a small, high-level expert panel on a trilateral basis to
advise the governments of Canada, the United States, and Mexico on the merits
of deeper forms of trilateral partnership, notably in regard to having a permanent
North American secretariat to support trilateral political cooperation, setting up
a permanent North American court on trade and investment, and
establishing a North American development finance mechanism to address
Mexico’s socio-economic disparities; and
promoting, on the basis of the formal trilateral political cooperation framework
recommended above, an inaugural summit of North American leaders that would
identify priority sectors for pursuing enhanced trilateral cooperation, with
progress on such a mutually agreed North American agenda to be reviewed at
each subsequent summit meeting.
The Committee certainly recognizes that some of our recommendations are far-reaching and
oriented more to the long term. Ultimate success will also depend on engaging
political interest in the United States, a task that is never easy or assured. However, we
believe that advancing Canadian objectives in North America is in our long-term national
interest, and that doing so requires political imagination, energy, and the kind of larger
vision of North American partnership that we have tried to put forward in this report.
A2 WTO Solves
Current legal procedures under NAFTA are the preferred mechanism
for dispute resolution
Thomas 2013 – Assistant Professor of Political Science at University of Vermont;
Ph.D in International Public Policy from Penn State(Martha, “THE LOGIC OF DISPUTE
INITIATION UNDER NAFTA CHAPTER 19”//SRM)
Once a petition for protection is received, the above-named authorities investigate the petition.
Across these agencies, dumping is deemed to have occurred when a foreign firm from another
member state sells a product below the sales price in its home country of origin or below its cost
of production, suitably adjusted.5 Subsidies are deemed to be countervailable if the government
of a member state provides grants, below-market-rate loans, or other benefits to domestic
producers.6 If the investigating authority concludes that material injury to the domestic
industry has occurred, they issue an affirmative ruling against the foreign firm(s) or industry
and impose tariffs. When this occurs, the party who has been ruled against (usually an industry
or group of firms) chooses whether or not to appeal.7 Parties can appeal these decisions to the
federal courts. In the United States, for example, appeals are usually first heard by the Court of
International Trade. Chapter 19 requires NAFTA members to replace their systems of judicial
review of AD/CVD determinations with review by binational panels in cases involving imports
from other NAFTA members.8 Each country retains their own AD/CVD laws, but any actor with
a right to appeal to a local court, can demand that appeal to be heard by a binational panel.
Actors have extensively utilized this option to take cases before NAFTA. NAFTA is seen as a
favorable forum for dispute settlement because, unlike local courts, it is less likely
to be influenced by domestic pressures in member states, it resolves disputes
comparatively quicker than domestic courts, and its rulings are binding and cannot be appealed
to other domestic courts. NAFTA is also viewed as a more favorable forum compared
to the World Trade Organization (WTO). Unlike the WTO, which only allows
governments to appeal cases, Chapter 19 allows the private parties to the AD or CVD case to
directly appeal. Many affected industries find this to be a useful option since it allows them to
mount their own legal case without having to expend resources convincing their government to
initiate an appeal through the WTO (Macroy 2002). The government may be hesitant to
pursue WTO adjudication “if the volume of trade involved is small,” or if they do not want to
create a trade war with an important partner (Macroy 2002, 16). Even if parties are able to
convince their governments to appeal to the WTO, Chapter 19 is still attractive because parties
do not have to sit on the sidelines and hope that their government undertakes a competent
litigation of the case (Macroy 2002). In addition, compared with the WTO, the use of Chapter 19
is also appealing because “relief” is more decisive (Macroy 2002, 16). If the dispute initiator
wins under Chapter 19, the panel will instruct the agency to adjust its ruling and may even
repeal the AD/CVD order. Meanwhile, in the WTO, the losing country has the choice to amend
the AD/CVD ruling, offer compensation in the form of other concessions to the negatively
affected party, or not adjust its policy and face retaliation (Macroy 2002, 16-7).
Process Explanation
NAFTA sets out specific mechanisms for resolving trade disputes
Burfisher, (Mary E.- Senior Fellow at Center for Public Policy, George Mason University,
“NAFTA TRADE DISPUTE RESOLUTION: WHAT ARE THE MECHANISMS?,”
http://pdic.tamu.edu/yellow/burfisher.pdf
NAFTA created formal mechanisms for solving trade disputes. The principal dispute
mechanisms are provided in Chapters 11, 14, 19, and 20. Chapter 11 covers disputes related to
investment, and Chapter 14 covers disputes related to services. So far, agricultural trade
disputes have been addressed under Chapters 19 and 20 of the agreement. Chapter 19 concerns
the application of anti-dumping and countervailing duty laws. Chapter 20 covers disputes that
relate generally to the interpretation or application of NAFTA. Both Chapters 19 and 20 provide
for several stages in the process of dispute resolution, beginning with consultations or mediation
among disputing parties (Table 1). Under Chapter 19, the Agreement provides for regular
consultations where parties can inform interested parties of domestic antidumping (AD) and
countervailing duty (CVD) investigations, and provide them with an opportunity to furnish
information. Once national investigations are complete, parties may request panel reviews of
other parties’ final determinations of dumping, subsidization or injury to domestic industries.
Under Chapter 20, consultations occur at the request of a party. When consultations fail to
resolve an issue, parties can request a meeting of the Commission. The Commission can call on
experts, attempt mediation, and make recommendations for the resolution of the dispute. As a
last resort in the dispute settlement process under Chapter 20, parties may request a panel
review of the issues in dispute. While the dispute settlement mechanisms under the two
chapters differ in some details, in general they are similar in their development of strict rules of
procedure and timetables for panel selection and panel decisions. The rights of each party to
choose panelists, who are charged with acting in a neutral, expert, and personal rather than
national capacity, and the use of arguments, submissions and rebuttals are specified. At the
close of the review period, panels issue initial declaratory opinions, along with
recommendations for remedial action if the panel’s findings are affirmative. Under Chapter 19,
parties may object to or appeal the panel decision. In this case, an extraordinary panel will
reconsider the panel’s findings, and either uphold them or remand them to a newly formed
panel. Under Chapter 20, the panel may reexamine the finding before publishing its final
opinion, which is not subject to appeal. Under both chapters, the resolution of the dispute
should be the removal of the offending practice, but failing that, the offending party must make
compensation or the injured party may take comparable action against the offending party.
Revising NAFTA Key
NAFTA needs to be revised to reflect new economic changes
Schott 2008 – member of the Trade and Environment Policy Advisory Committee on
International Economic Policy of the US Department of State, former official of the U.S.
Treasury Department in international trade and energy policy, former professor at Georgetown
University, author of numerous books and articles on trade (Jeffrey J., “THE NORTH
AMERICAN FREE TRADE AGREEMENT: TIME FOR A CHANGE?” Peterson Institute for
International Economics, November 21-23 2008//SRM)
Some items were excluded from NAFTA coverage (including some farm products, energy
investment in Mexico, rules on subsidies and dumping, and migration).
Some NAFTA provisions were weakly constructed and should be recast (including the labor and
environmental side accords, and some dispute settlement procedures and definitions).
Changing conditions in the global environment in which the NAFTA operates that were not on
the radar screen of the original draftsmen (especially border security and climate change).
Simply put, despite a decade of progress, the three NAFTA partners still have a lot of work to do
together to address new economic and political challenges that threaten to impede future
benefits from regional economic integration. There are many specific areas of friction among the
three countries; some problems remain intractable such as illegal immigration and others like
trucking and sugar involve strong political constituencies. For this paper, we focus on
broader topics that merit attention and can produce concrete gains from cooperation among the
NAFTA partners.
Revising NAFTA is necessary-- agreement falling short
Gallagher 09
[Kevin. Associate Professor of International Relations. Specializes in Economic Development,
Trade and investment policy , international environmental policy, and Latin America.
Reforming North American Trade Policy: Lessons From NAFTA. 02/12/09.
http://www.cipamericas.org/archives/1940 // SRSL]
After 15 years there is now widespread agreement that the North American Free Trade
Agreement (NAFTA) has fallen short of its stated goals. Rather than triggering a convergence
across the three nations, NAFTA has accentuated the economic and regulatory asymmetries that
had existed among the three countries. Since 2001, the region has actually seen a decline in
levels of integration in key areas such as manufacturing.2 Thus, it is no surprise that the agreement continues
to generate controversy. While proponents credit the agreement with stimulating the flow of goods, services, and investment among
the North American countries, critics in all three countries argue that this has not brought improvements
in the standards of living of most people. In the United States, the agreement is blamed for job
loss, for adding downward pressure on wages, particularly in manufacturing, and for
contributing to a large U.S. trade deficit. In Canada, critics point to job losses, the declining
competitiveness of the manufacturing sector, and the constraints NAFTA has put on Canada to
deploy adequate policies for public welfare. In Mexico, NAFTA is blamed for creating few new
jobs while decimating many existing sources of livelihood, particularly in agriculture. In all three
countries, citizen groups and government officials decry the capability granted foreign investors
to sue governments if legislation negatively affects their profits, or expected profits. The
demands for changes in NAFTA, made by the civil societies of each of these three countries, go
well beyond the May 2007 concessions that the newly elected Democratic majority in the U.S.
Congress won from the Bush administration. These concessions include reforms in labor,
environmental, and intellectual property provisions for future trade agreements, which were incorporated into the
pending agreements with Peru, Panama, and Colombia. As of this writing only the first has been approved, while serious criticisms
on human rights and financial issues continue to hold up the other two. Reformers in the U.S. Congress introduced the "Trade
Reform, Accountability, Development, and Employment Act" (TRADE Act) of 2009 in the summer of 2009. With more than100 cosponsors from both chambers, the TRADE Act calls for a review of existing trade pacts, including NAFTA. The act also sets forth
instruments to be included in the template for future agreements.
A2 offcase
2AC NNAFTA CP
NAFTA doesn’t solve; continental collaboration has to be enforced
Blank 6/17 (Stephen Blank, Research Professor of National Security Affairs, “North American
Solutions”, 6/17/13, http://www.worldpolicy.org/blog/2013/06/17/north-american-solutions)
This year marks NAFTA’s 20th anniversary, and we can look back on impressive (if widely
unknown) achievements in building a more integrated North American economic system. But to
cope with looming continental issues, Canada, the United States, and Mexico need to work even
more closely together—simply revamping this two-decade-old agreement won’t be enough.
NAFTA wasn’t the beginning of North America’s more integrated economic system. Rather,
NAFTA recognized and formalized changes in the structure of the North American economy
already underway. Today Mexico, Canada, and the United States are deeply interconnected and
interdependent, with an unprecedented degree of collaboration among them. What is
particularly important are not just increases in trade in raw materials and finished goods among
the three nations, but rather the striking growth in the cross border movement of parts and
components. We don’t just sell stuff to each other. We make stuff together. We share integrated
energy markets, use the same roads and railroads to transport jointly-made products, fly on the
same integrated airline networks, and increasingly meet the same standards of professional
practice. This is the true North American “reality.” By the 1990s, key elements of North
America’s economy could be visualized as deeply integrated continental supply chains linking
production centers and distribution hubs across the continent. No one planned these
developments. The most powerful drivers of change were “bottom-up” changes in corporate
strategies and structures rather than “top-down” government plans or decisions. This “bottomup” approach worked well in the 1980s and 90s, when excess capacity existed in our freight
transportation system, as new technologies (like doubt stacking containers) came on line, and
governments deregulated rail and trucking industries. But that era is over and the bottom up
approach no longer suffices to tackle new issues. The problems didn’t begin with September
11th, although post 9-11 regulations have “thickened” borders, making business more expensive
and complex. The fundamental flaw in the NAFTA structure has been the failure of the three
governments to acknowledge that the trade agreement was only one element of this North
American reality, and only a first step toward achieving a stable foundation for continental
collaboration and growth. But Ottawa, Washington, and Mexico City continue to emphasize that
the three “NAFTA partners” are trading partners, nothing more. This failure of a trilateral
vision inhibits efforts to upgrade the NAFTA system. Calls to renegotiate NAFTA after 9-11 led
nowhere, and the collapse of the more serious effort to enlarge the scope of North American
regulatory and security cooperation in the Security and Prosperity Partnership in 2009 revealed
that leaders were not prepared to confront wild accusations that this was a step toward a “North
American Union.” The work of the U.S.-Canada Regulatory Cooperation Council has been more
successful but still modest—bilateral rather than trilateral and focused essentially on making the
border more efficient and secure rather than on the issues coming at us. While trade restrictions
and border issues remain vital concerns, we must be prepared to face these new, pressing
problems: Energy, for example, must be viewed in continental terms. We all benefit from North
America’s deeply integrated oil, gas, and electricity systems. In this new energy-rich
environment, we must determine an energy mix that optimizes availability, cost, and
sustainability for the next generations. Environmental threats cannot be discussed as three
separate national issues. We have given surprisingly little attention to building collaborative
adaptation mechanisms for dealing with climate change. We have not thought about how to
improve our continental supply chains—and, indeed, what shape these might take in the next
decades. We need to focus serious attention on learning more about how North America works
and on the factors that drive or inhibit our competitive advantage. North Americans face a
tremendous infrastructure crisis. Competitiveness requires efficient, safe, and sustainable
transport (road, rail, air, and water); logistics systems; border crossings; and energy
infrastructure. We have not thought about a 21st century continental infrastructure of roads,
rails, and ports. We are all undergoing extensive demographic changes that limit economic
growth and fiscal balance and create political, economic, and social turmoil. The issue is not just
Mexican immigration to the United States, but aging in all three countries. All three countries
experience high levels of internal migration as people follow jobs; all three face growing
imbalances of the supply of medical and educational resources and changing levels of demand
for these services. As we begin to focus on these issues, efforts to revitalize the movement
toward economic integration in North America should not be directed toward the negotiation of
a new grand bi- or tripartite trade deal. We cannot think of trying to build a North American
version of the European Community. What we need to launch is not a new trade negotiation but
a political campaign. First, we must begin with a vision of what North America might look like in
the mid-21st century—how efficient, sustainable and secure energy, climate change, supply
chain, infrastructure, and demographic-health systems might operate in another 30 or 40 years.
Second, instead of compressing many different issues into a single negotiation, discussions
must be separated and treated individually. We should begin with a view of three
sovereign nations seeking means to confront common, often shared problems. An integrated
“North America” should be a vehicle for collaboration rather than the goal of collaboration. We
do not suggest that every problem that exists has a North American solution. But we have to
stop being afraid to consider continental ideas and approaches to some of our most pressing
problems. It should be natural—not unusual—to think of continental collaboration as a tool to
deal with particular issues. Third, we must build a much broader base of informed and active
constituencies. The NAFTA approach confined discussions about North America to a small
number of beltway trade experts. But the issues we face today are large and difficult, and we are
burdened with a history of misinformation (for example, about a massive, secret Mexico to
Canada trade corridor) and deeply embedded fears (eroded sovereignty in a North American
Union). Large constituencies that support North American integration do exist. They consist of
companies that run continental production, supply, and marketing systems; cities where jobs
depend upon efficient North American transportation and logistics networks; and communities
living on the borders. Many government, business, and civil society groups are aware of their
roles integrating communities across Canada, the United States, and Mexico. Still for even the
most informed, the concept of an integrated North America is limited to more traditional pannational tasks of getting parts on to loading docks, keeping oil and gas flowing in pipelines,
matching electrical demand and supply, considering how weather might affect water flows, and
tracking threatening invasive species. The aim should be to mobilize these disconnected groups
into coherent communities that recognize interests in continental collaboration. We must
stimulate continual conversations among these groups, build ongoing ties with research and
teaching institutions, and mobilize constituencies in energy, climate change, supply chains,
infrastructure, and demographics. We need to think about how to institutionalize these
conversations and thus climb beyond the repetitive, ad-hoc approach that has characterized
discussions of North America over the past three decades. Discussions must involve perspectives
from different regions, different economic and social sectors, and from those who oppose
further integration. If efforts to build a new North American system rest solely on the creation of
a new Ottawa-Washington-Mexico City corridor, they will lack legitimacy in many parts of the
continent. The issues that we now face cannot be conducted under the legislative and media
radar. We must stop being afraid of public debate on the future of North America. If we act like
conspirators, we will surely be accused of conspiracy.
Cap K Answers
Our plan is necessary to lessen corporate domination and sustain a
responsible capitalism
Johnson May 16, 2013¶ Assistant Professor of Economics at Darton State College in Albany, GA,¶ (Aaron, “Let’s Amend, Not
End, Capitalism,” http://econprofaj.wordpress.com/2013/05/16/lets-amend-not-end-capitalism/)//mw
The United States prides itself as being the “land of opportunity”. With the U.S. being a favored destination for
immigrants across the world, that distinction still has merit. However, there are disturbing trends where many are questioning the
value of capitalism due to its contribution to income inequality. Even so, we must acknowledge the role that
capitalism played in lifting not only Americans out of poverty and into prosperity, but in Canada,
Europe, and all parts of the world. Having said that, we must recognize that our current economic system needs to be
amended to level the playing field.¶ Many Americans are divided on the moral implications of income redistribution. On
one hand, there are those that believe that extravagant wealth is immoral and that there should be a limit on executive pay. In fact,
Japan has embraced this culture and have stifled executive pay. Their executives must publicly disclose their pay if it exceeds $1.1
million and only 7.5% of them exceeded this baseline. That is dwarfed by American executives, whose top 10 earn between $43 to
$131 million in annual salaries.¶ Then there are others, who believe too much income redistribution is immoral because it unfairly
penalizes hard work and achievement. When an individual makes sacrifices in their education and career, why should they be forced
to give up a portion of their earned pay to subsidize an irresponsible individual, who squandered opportunities by not valuing their
education early in life? If taxes are increased substantially as your income rises, then the payoff of extra work and risk is lowered.
Why go through the rigors of medical school, engineering, and law school, when one can make a similar amount in a less demanding
field?¶ In deciding between two competing narratives, the difference comes down to economic mobility. Is our present economic
system more conducive to promoting competition between social classes? Unless one believes that effort and ability is only
consigned to the affluent, one would think that the U.S. economy and its promotion of economic liberty would result in healthy
movement between the poor, middle class, and upper class. However when compared to our peers, we are laggards. comparing the
U.S. with the United Kingdom, Denmark, Norway, Sweden shows that Americans are less likely to rise from poverty across
generations than any of those four countries.¶ Certainly, it is fair that a successful professional, who has excelled at their craft,
should be able to pass their hard-earned dollars to their children to help them compete. One of the motivations to taking on
additional responsibilities on a project or working 60-70 hours a week is to provide a better life for our children. That means living
in a better neighborhood and access to superior schools. However, should there be limits imposed on those advantages in the form of
higher taxes?¶ Specifically, there’s a growing body of research that income inequality imposes significant costs on the economy. In
order to counter these costs, there are policy initiatives that would boost equality and shift the economic gains would shift from the
affluent to the low and middle class. When there is too much income inequality, it can actually inhibit economic growth and cause
more instability. in Project Syndicate. Specifically, he blames deregulaton and legislative acts promoting home ownership as the root
causes of the financial crisis as low- and middle-income households took on too much debt to maintain their standard of living in the
face of declining income growth.¶ With rising inequality, the occurrence of rent-seeking is more prevalent. This is where individuals
use their financial resources and influence to affect policies that benefit their interests over society. The prevalence of special interest
groups and less restrictive campaign financing laws provide the potential to seek loopholes and other avenues to enrich themselves
at the expense of others. Columbia University economist Stiglitz pointed to lack of effective oversight of the financial industry where
irresponsible mortgage products caused our steep recession. Then there are exploitations of the tax code where societal benefits are
minimal when these advantages boost corporate balance sheets, rather than worker payrolls. Lastly, it stunts the progress of
competitors who are not able to buy influence.¶ It is imperative that we achieve legislative reform that minimizes the influence of
special interests and replace it with investments toward minimizing the skills divide. A two-pronged attack is necessary. First, we
need a quick fix in updating adult skill sets that are struggling to meet the requirements of a technology-based economy. As for
schools, they must find ways to increase academic performance within low-income and middle-income households despite
challenges within family structures and less than ideal neighborhoods. This must start with better parental training and access to
early child education resources. Both will require more funding and resources.¶ Capitalism remains the ideal
economic system in the world, but ignoring the negative effects of income inequality can lead to
its demise.
It is the government’s responsibility to protect our freedom
Quitschau December 4, 2010 *web developer, writer, entrepreneur, student at Bradley University. - ¶ (Daniel, “Limits On
Liberty: Social Injustice in America,” http://livefreeordie.com/limits-on-liberty-social-injustice-in-america/)
America , we pride ourselves on being free. This can be exemplified through many aspects of American culture,
especially in patriotic songs and in our motto, “the Land of the Free.” But are we really free? What does it mean to be free? The
In
use of the term “freedom” is typically used to express freedom from some type of oppression; to have liberty is to have freedom of
choice, or the ability to choose between options. The United States grants its citizens many freedoms, some of which other countries
can only aspire. We have opportunities others will never have, and we have basic freedoms others do not, such as freedom of speech,
freedom of the press, and our right to assemble, among many others.¶ However, our great government also makes its
effort to limit individual freedom; an effort which is successful, and might go completely unnoticed were
it not for the hundreds of thousands of victims of this silent holocaust . A truly free society, within the
boundaries of a government (and not anarchy), would only fulfill basic, necessary functions that create structure and order in
society. A completely free society would be one without government; accepting that there must be a government, the
freest one can be is when said government is the smallest. Our federal government has grown so large that it has far surpassed the
size the founders intended. We now have programs upon programs which allow the federal government enormous powers which
infringe upon our liberty. The role of government should be to protect its citizens from foreign
invasion, establish currency, and maintain a justice system.¶ The concept of liberty has been thrown to the
wind by the hands of the United States federal government; it’s reached a point where the idea of self-ownership is an alien concept.
State and individual sovereignty are foreign concepts. The Constitution is frequently ignored. These are great tragedy. The
suppression of personal liberty has not only thrown our society into turmoil by costing the taxpayer a small fortune, nor only
imprisoned the highest population percentage per capita of any country (in large due to prosecution of victimless crimes), but it has
rewritten the principles our government was founded on, challenged the innate right of self-ownership, and has perpetuated
one of the greatest injustices of all time: the oppression of personal liberty.¶ The government our founders envisioned is
very far from the one we live under today. In fact, one of their greatest concerns when making the framework for our nation was the
size and constraints of the federal government. As hopefully every American knows, Thomas Jefferson believed that each man is
born with unalienable rights, as expressed in the preamble to our Declaration of Independence, when he wrote, “We hold these
truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that
among these are Life, Liberty and the pursuit of Happiness.” Unalienable rights are rights that are inherent within each man, with or
without law supporting or hindering such rights. An unalienable right exists regardless of law. In his letter to Isaac Tiffany in 1819,
Jefferson wrote, “Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of
others. I do not add ‘within the limits of the law,’ because law is often but the tyrant’s will, and always so when it violates the rights
of the individual.” If we examine human history, it is clear that governments are no infallible, and that power corrupts. Essentially,
we are born with the right to express liberty regardless of the law, as long as our expression of our liberty does not conflict with the
rights of others. Jefferson, perhaps one of the strongest proponents of personal freedom, was not the only one who believed in these
ideas. Indeed, Benjamin Franklin is often credited with saying, “Those who would give up essential liberty to purchase a little
temporary safety, deserve neither liberty nor safety.” Trading one’s freedom for security by enabling a controlling, growing, federal
government, while appealing to some, aids in causing a travesty. This travesty is the idea that government knows best. Our founders
envisioned a federal government, which would unite the many states. Each state would be responsible for its own laws outside of the
constitution. In short, our founders envisioned a country where life, liberty, and the pursuit of happiness could be expressed without
constraint, providing one’s expression does not infringe on someone else’s rights to do likewise.¶
[text deleted]
Limiting liberty in America is a social injustice. Increasing loss of freedom is a gradual shift
towards big government that often goes unnoticed or is not acted upon. Historically, as the United States
has aged, freedom has gradually been forfeited. Big government can rarely, if ever, be a beneficial thing for the people overall. As our
government has grown, our policies and laws show different values than the libertarian-like views of many of our founders such as
Thomas Jefferson and Benjamin Franklin, as well as many other great thinkers. The result of this is a system that is much different
than was originally intended. These changes have unfortunately denied the idea that self-ownership is a right to every man, which is
something an individual would rarely deny oneself. This rejection of self-ownership is a great social injustice. Taking away someone
else’s ability to choose is a characteristic of slavery; if the individual is not sovereign, then someone else can command the will of
said individual. If we allow this overlooked social injustice to continue – if American’s continue to follow the trend
of apathy – what will our country look like fifty or even twenty years from now? How many
silent victims will it take? How many rights must we lose before you care?¶
Even if the capitalism does bad things, any alternative is more
violent—only the state can provide peace and liberation.
Englhart 03 - Neil A., Assistant Professor of Government and Law at Lafayette College, (“In Defense of State Building: States,
Rights, and Justice,” Dissent, Fall, Available Online to Subscribing Institutions via Academic Search Elite, p. 18)
//mw
State failure has become an increasingly important policy concern since 9/11. Strengthening or reconstructing failed states has even
become an explicit goal of American foreign policy. Yet many Americans across the political spectrum regard states with deep
suspicion and abiding hostility, as instruments of oppression. In truth, states are more likely to protect human rights than any other
form of political organization. Acknowledging that potential is today a moral and political
imperative. The evil that states do is well known. There are abundant examples: from the brutality of the Thirty
Years War to the Stalinist purges, the Holocaust in Nazi Germany, and the Rwandan genocide. Because its repressive capacities are
so clear, political theorists seek to protect us from the state (Locke), to divide and limit its power (Madison), to liberate us from it
(Marx), or to dissolve it entirely (Foucault). Yet
Hobbes’s picture of life without the state— poor, nasty,
brutish, and short—still resonates. States can only be called oppressive if there is an alternative
available, a more promising political order. States dominate our minds as much as they dominate the globe. The
conceptual hegemony of the state is so great that there has been little serious thinking about alternative arrangements. Anarchist
visions may sound liberating, but only because they assume that life under anarchy would be
much like it is now—only better. In fact, anarchists depend on the very order they seek to abolish, assuming that people
will be treated as free and equal, able to make uncoerced choices outside the protection of the state. Their utopian visions
set the parameters of critiques of the state, but they seldom recognize that the necessary
substructure of their utopia doesn’t exist “nowhere”— it exists only where states have
established law and order. In real life, the alternatives to the state are more violent, more coercive social and political
orders dominated by warlords and gangs. Not quite the Hobbesian war of all against all, they are rather wars of group against group,
dividing society and destroying the possibility of a peaceful public sphere, of civil society, rights, and social justice. The corollary to
the oppressiveness of non-state politics is that, contrary to our commonsense understanding, states are relatively
liberating and egalitarian. Compared to actually existing alternatives, states have more potential for
protecting human rights, human security, and international peace than any other political order. That’s why
state building is so important.
NAFTA Good
Heg
NAFTA is key to heg – facilitates cooperation and integration
Balze, 1 - Director of the Argentine Council on Foreign Relations and Professor of International Economics at the Foreign
Service School and at the Advanced School of the Ministry of Defense in Buenos Aires. His recent books include Mercosur: Entre la
Retorica y el Realismo. (Felipe A. M. de la “Finding Allies in the Back Yard;NAFTA and the Southern Cone Foreign Affairs July, 2001
/ August, 2001” Council on Foreign Relations, Inc. Foreign Affairs, Lexis)//ahayes
The United States -- preeminent but not hegemonic -- cannot maintain its global leadership without
the cooperation of like-minded nations that share its interests and values. In fact, in the coming years,
American preeminence will likely remain stable only in regions where the United States has
signed agreements with countries that have congenial economic and sociopolitical systems.
Fortunately, creating agreements based on the promotion of regional economic growth,
integration into the world economy, and the consolidation of democracy is feasible under certain
circumstances. Witness the successive expansions of the European integration project (now the European Union), which
incorporated Italy in the 1950s, Spain in the 1970s, and then Greece, Ireland, and Portugal in the 1980s. Now a similar opportunity
for integration exists in the Southern Cone of South America. A core group of countries -- Argentina, Brazil, Chile, and Uruguay -have made great strides in recent years and are poised, despite their short-term economic problems, to make steady political and
economic gains over the next decade. The right incentives are critical, however, to ensure that these nations become fully
democratic, market-oriented allies of the United States. To this end, the best incentive the United States can provide
is an expansion of the North American Free Trade Agreement (NAFTA) to the Southern Cone, making these South American
nations members of the pact alongside the United States, Canada, and Mexico. But economic integration will not succeed without a
compelling political rationale as well: namely, the promotion of democracy and regional security that could
follow the creation of a "super NAFTA." Such a comprehensive treaty system would offer great advantages to all
its participants, helping to stabilize and enrich the Americas, and would further the process of
hemispheric integration.
US Auto Industry
Mexico staying in NAFTA is especially essential to the U.S. auto
industry
Villarreal 2012 – Specialist in International Trade and Finance, Congressional Research Service (M.
Angeles, “U.S-MEXICO ECONOMIC RELATIONS: TRENDS, ISSUES, AND IMPLICATIONS” August 9,
2012 http://www.fas.org/sgp/crs/row/RL32934.pdf //SRM)
The overall effect of NAFTA on the U.S. economy has been relatively small, primarily because
two-way trade with Mexico amounts to less than 3% of U.S. GDP. Thus, any changes in trade
patterns with Mexico would not be expected to be significant in relation to the overall U.S.
economy. In some sectors, however, trade-related effects could be more significant, especially in
those industries that were more exposed to the removal of tariff and non-tariff trade barriers,
such as the textile and apparel, and automotive industries. Since NAFTA, the automotive,
textile, and apparel industries have experienced some of the more noteworthy changes in
trading patterns, which may also have affected U.S. employment in these industries. U.S. trade
with Mexico has increased considerably more than U.S. trade with other countries, and Mexico
has become a more significant trading partner with the United States since NAFTA
implementation. In the automotive industry, the industry comprising the most U.S. trade with
Mexico, NAFTA provisions consisted of a phased elimination of tariffs, the gradual removal of
many non-tariff barriers to trade including rules of origin provisions, enhanced protection of
intellectual property rights, less restrictive government procurement practices, and the
elimination of performance requirements on investors from other NAFTA countries. These
provisions may have accelerated the ongoing trade patterns between the United States and
Mexico. Because the United States and Canada were already highly integrated, most of the trade
impacts on the U.S. automotive industry relate to trade liberalization with Mexico. Prior to
NAFTA Mexico had a series of government decrees protecting the domestic auto sector by
reserving the domestic automobile market for domestically produced parts and vehicles. NAFTA
established the removal of Mexico’s restrictive trade and investment policies and the elimination
of U.S. tariffs on autos and auto parts. By 2006, the automotive industry has had the highest
dollar increase ($41 billion) in total U.S. trade with Mexico since NAFTA passage.
Mexico Econ
NAFTA is key to Mexico economy
Villarreal, 10 M. Angeles Villarreal, specialist in International Trade and Finance, “NAFTA
and the Mexican Economy”, 6/3/10, (http://www.fas.org/sgp/crs/row/RL34733.pdf)
A 2005 World Bank study assessing some of the economic impacts from NAFTA on Mexico concluded that NAFTA
helped
Mexico get closer to the levels of development in the United States and Canada. The study states that
NAFTA helped Mexican manufacturers to adopt to U.S. technological innovations more quickly
and likely had positive impacts on the number and quality of jobs. Another finding was that since NAFTA
went into effect, the overall macroeconomic volatility, or wide variations in the GDP growth rate, has
declined in Mexico. Business cycles in Mexico, the United States, and Canada have had higher levels of synchronicity since
NAFTA, and NAFTA has reinforced the high sensitivity of Mexican economic sectors to economic developments in the United
States.24 Several economists have noted that it is likely that NAFTA contributed to Mexico’s economic recovery
directly and indirectly after the 1995 currency crisis. Mexico responded to the crisis by implementing a strong
economic adjustment program but also by fully adhering to its NAFTA obligations to liberalize trade with the United States and
Canada. NAFTA may have supported the resolve of the Mexican government to continue with the
course of market-based economic reforms, resulting in increasing investor confidence in
Mexico. The World Bank study estimates that FDI in Mexico would have been approximately
40% lower without NAFTA.
NAFTA is fine now—all three countries are benefiting
Kapenda 09
[Simon Kapenda. Economist and entrepreneur. NAFTA, the Good, the Best, and the Ugly for the Americas.
http://princesimon.wordpress.com/2009/02/05/nafta-the-good-the-best-and-the-ugly-of-the-free-trade/. February 5,
2009.//SRSL] Each of the NAFTA’s three-member countries seems to have amassed
a
great success as a result of international trade, with Mexico and Canada being the
most beneficial nations. “Trade liberalization has transformed and modernized
Mexico’s vibrant economy by successfully boosting trade and investment flows.
Within just a few years, Mexico’s exports have diversified from primarily oil to
include an array of manufactured products, making Mexico one of the largest
exporters in the world. While, one in five jobs in Canada is linked to international trade, and Canada’s prosperity is
built on its openness to international trade and investment. As such, the North American continental partnership is without a doubt
an important competitive advantage for Canada. Canada is using this continental platform as a way to help Canadian business
embrace commercial opportunities around the world. As for the United States, the largest and most diversified economy in the
world, its market economy whose businesses are world leaders in the manufacturing and high-tech sectors, especially computers,
medical equipment, and aerospace, and in services, including financial services and telecommunications, and in agriculture, may
have benefited equally” (NAFTANow.org).
NAFTA key to economic and social growth in Mexico and US
Washington Times, 12 (5/14/12, “NAFTA key to economic, social growth in Mexico,”
http://www.washingtontimes.com/news/2012/may/14/nafta-key-to-economic-social-growthin-mexico/?page=all,
CHIHUAHUA CITY, Mexico — The North American Free Trade Agreement, which went into
effect in 1994, has been the key driver of Mexico’s economic and social transformation of the
past 20 years, analysts say. NAFTA at first brought an explosion of low-skill-labor factories to
the Mexican side of the U.S. border. By the mid-2000s, the trade pact had triggered an
increasingly sophisticated manufacturing base that now reaches across Mexico’s 31 states. “What
we’re seeing now is a growth of industry in Mexico that requires more engineers,” said
Christopher Wilson, an associate with the Mexico Institute at the Washington-based Woodrow
Wilson International Center for Scholars. “To put a name on it, specifically, we’re talking about
automobiles and aerospace,” Mr. Wilson said. “Mexico is now graduating more engineers than
Germany every year.” A 40 percent jump in Mexico’s per capita gross domestic product since the
inception of NAFTA has brought with it an increasingly robust middle class. “What that means is
Mexicans are becoming more educated, and there is more investment in children, which is why
you are able to see the development of an aerospace sector,” Mr. Wilson said. About 47 percent
of Mexico’s 115 million people live in poverty, down dramatically from the 80 percent rate half a
century ago. Today, 98 percent of homes have electricity and more than 4 million people study
at the university level each year. Through early 2012, the nation of 112 million had an
unemployment rate of roughly 5 percent. The per capita salary of about $15,000 ranks the
country 81 out of 195 nations. North of the border, however, NAFTA’s reputation remains a topic
of heated debate. From the onset, when 1992 U.S. presidential candidate Ross Perot, an
independent, described the “giant sucking sound” that would be heard if the agreement were
implemented, critics have long decried the flight of U.S. manufacturing jobs to Mexico. U.S.
unemployment is running above 8 percent. Some NAFTA critics point to less publicized impacts
wrought by the trade agreement. “During the first few years, there was a massive overhaul of
Mexico’s agricultural trade rules through NAFTA,” said Todd Tucker, who heads Global Trade
Watch at the Washington-based nonprofit advocacy organization Public Citizen. “This meant
small-scale Mexican farmers were massively displaced by subsidized imports from companies in
the United States,” Mr. Tucker said. “That led to overcrowding in cities, as well as new
immigration into the United States.” To address the displacement, the Mexican government
attempted to create jobs programs in rural areas. But NAFTA had granted large U.S. companies
new powers to challenge such programs on grounds they interfere with potential profits. One
such challenge in 2009 saw a NAFTA tribunal order the Mexican government to pay $77.3
million in damages to the U.S.-based agribusiness giant Cargill, a maker and marketer of highfructose-corn-syrup products. “So now you have Mexican taxpayers paying big U.S. companies,”
Mr. Tucker said. “So the net impact of a trade agreement like NAFTA is that, on the one hand, it
creates displacement, and then on the other, Mexico is put in a bind in terms of how its
government can try to navigate social and economic problems created by the agreement.” Apart
from such concerns, others assert the increasingly globalized nature of Mexico’s manufacturing
economy has laid the groundwork for decades of future growth. U.S. investment soared Before
NAFTA, U.S. foreign direct investment in Mexico was roughly $15 billion. Today it’s more than
$90 billion. A growing number of European, Japanese and Chinese firms also are investing in
Mexican manufacturing. Aside from tapping a labor market where unions are largely irrelevant
and worker pay averages $6 per hour, foreign companies are attracted by Mexico’s proximity to
massive auto sales markets in the United States and Canada. Twenty-five vehicle-assembly
factories owned by foreign automakers - Ford, General Motors, Volkswagen, Honda and Nissan
- produced more than 2 million new cars and trucks from Mexico during 2011. “We’re not talking
about people putting brake pads on a car in a free-trade zone on the border,” said Christopher
Sabatini, senior director of policy at the Americas Society and Council of the Americas in New
York. “The downside [to the United States], and I say this as a dedicated free-trader, is that
Mexico is now on the verge of cutting into the higher-skilled manufacturing, design and
engineering jobs,” he added. “That raises the implication that the U.S. needs to invest in
infrastructure, so that … the U.S. higher-skilled manufacturing and design jobs don’t head
south.
NAFTA has achieved goals set out by Mexican government
Zepeda et al, 09 (Eduardo-Zepeda is inter-regional policy coordinator of the Development
Policy and Analysis Division, Department of Economic and Social Affairs at the United Nations
General Secretariat, Timothy A. Wise-Timothy A. Wise is Director of the Research and Policy
Program at the Global Development and Environment Institute, Tufts University, and leads its
Globalization and Sustainable Development Program, Kevin P. Gallagher-Kevin P. Gallagher is
Senior Researcher for the institute’s Research and Policy Program, and an associate professor in
the Department of International Relations at Boston University, December 2009, “Rethinking
Trade Policy for
Development: Lessons From Mexico Under NAFTA,”
http://carnegieendowment.org/files/nafta_trade_development.pdf,
The Mexican government’s NAFTA-based economic strategy was successful in some important
ways. One of the goals was to increase trade, foreign investment, and productivity while
providing a more stable macroeconomic climate for business. The data suggest that those
objectives were largely achieved. TRADE GROWTH: Mexico’s exports increased 311 percent in
real terms between 1993 and 2007, and non-oil exports increased 283 percent. Exports to the
United States were up a similar percentage. The export growth was overwhelmingly in
manufacturing, with manufacturing exports rising from 43 percent of total exports in 1990 to 77
percent in 2007. Agricultural exports doubled in real terms from 1993–2007. FOREIGN
DIRECT INVESTMENT (FDI): FDI more than tripled between 1992 and 2006. Fueled by
investment liberalization under NAFTA, the majority (58 percent) came from the United States.
MACROECONOMIC STABILITY: Mexico tightened its fiscal and monetary policies. On their
own terms, these measures were a success. Inflation was brought below 5 percent, from over 80
percent in the 1980s. Since NAFTA, federal budget deficits have been low, about 1 percent of
GDP (at least until the current economic crisis when deficits initially increased to stimulate the
economy). This has been achieved while Mexico dramatically reduced its international debt to a
more sustainable level. RISING PRODUCTIVITY: Productivity increased about 80 percent in
Mexico’s domestic manufacturing sector, as Mexican firms were forced to compete with foreign
firms. The rise of productivity is at the core of the efficiency gains that are among the most
important goals of trade liberalization.
NAFTA is currently key to Mexico’s economic success.
Taylor, 2012 – State Department correspondent of Washington Times, international news
editor for World Politics Watch, recipient of international reporting award from The Stanley
Foundation, winner of a Society of Professional Journalists award for coverage of September 11
terrorist attacks
[Guy, “NAFTA key to economic, social growth in Mexico”, The Washington Times, 5/14/12,
http://www.washingtontimes.com/news/2012/may/14/nafta-key-to-economic-social-growthin-mexico/?page=all]//GH
CHIHUAHUA CITY, Mexico — The North American Free Trade Agreement, which went into
effect in 1994, has been the key driver of Mexico’s economic and social transformation of the
past 20 years, analysts say.¶ NAFTA at first brought an explosion of low-skill-labor factories to
the Mexican side of the U.S. border. By the mid-2000s, the trade pact had triggered an
increasingly sophisticated manufacturing base that now reaches across Mexico’s 31 states.¶
“What we’re seeing now is a growth of industry in Mexico that requires more engineers,”
said Christopher Wilson, an associate with the Mexico Institute at the Washington-based
Woodrow Wilson International Center for Scholars.¶ “To put a name on it, specifically, we’re
talking about automobiles and aerospace,” Mr. Wilson said. “Mexico is now graduating more
engineers than Germany every year.”¶ A 40 percent jump in Mexico’s per capita gross domestic
product since the inception of NAFTA has brought with it an increasingly robust middle class.¶
“What that means is Mexicans are becoming more educated, and there is more investment in
children, which is why you are able to see the development of an aerospace sector,” Mr. Wilson
said.¶ About 47 percent of Mexico’s 115 million people live in poverty, down dramatically from
the 80 percent rate half a century ago. Today, 98 percent of homes have electricity, and more
than 4 million people study at the university level each year.¶ Through early 2012, the nation of
112 million had an unemployment rate of roughly 5 percent.¶ The per capita salary of about
$15,000 ranks the country 81 out of 195 nations.¶ North of the border, however, NAFTA’s reputation remains a topic of heated debate. From the onset,
when 1992 U.S. presidential candidate Ross Perot, an independent, described the “giant sucking sound” that would be heard if the agreement were implemented, critics have long decried the flight of U.S.
manufacturing jobs to Mexico.¶ U.S. unemployment is running above 8 percent.¶ Some NAFTA critics point to less publicized impacts wrought by the trade agreement.¶ “During the first few years, there was a
massive overhaul of Mexico’s agricultural trade rules through NAFTA,” said Todd Tucker, who heads Global Trade Watch at the Washington-based nonprofit advocacy organization Public Citizen.¶ “This meant
small-scale Mexican farmers were massively displaced by subsidized imports from companies in the United States,” Mr. Tucker said. “That led to overcrowding in cities, as well as new immigration into the United
States.Ӧ To address the displacement, the Mexican government attempted to create jobs programs in rural areas. But NAFTA had granted large U.S. companies new powers to challenge such programs on grounds
they interfere with potential profits.¶ One such challenge in 2009 saw a NAFTA tribunal order the Mexican government to pay $77.3 million in damages to the U.S.-based agribusiness giant Cargill, a maker and
marketer of high-fructose-corn-syrup products.¶ “So now you have Mexican taxpayers paying big U.S. companies,” Mr. Tucker said.¶ “So the net impact of a trade agreement like NAFTA is that, on the one hand, it
Apart from
such concerns, others assert the increasingly globalized nature of Mexico’s
creates displacement, and then on the other, Mexico is put in a bind in terms of how its government can try to navigate social and economic problems created by the agreement.Ӧ
manufacturing economy has laid the groundwork for decades of future growth .¶
Before NAFTA, U.S. foreign direct investment in Mexico was roughly $15 billion. Today it’s
more than $90 billion .¶ A growing number of European, Japanese and Chinese firms also are
investing in Mexican manufacturing.¶ Aside from tapping a labor market where unions are
largely irrelevant and worker pay averages $6 per hour, foreign companies are attracted by
Mexico’s proximity to massive auto sales markets in the United States and Canada.¶ Twenty-five
vehicle-assembly factories owned by foreign automakers - Ford, General Motors, Volkswagen,
Honda and Nissan - produced more than 2 million new cars and trucks from Mexico during
2011.¶ “We’re not talking about people putting brake pads on a car in a free-trade zone on the
border,” said Christopher Sabatini, senior director of policy at the Americas Society and Council
of the Americas in New York.¶ “The downside [to the United States], and I say this as a dedicated
free-trader, is that Mexico is now on the verge of cutting into the higher-skilled manufacturing,
design and engineering jobs,” he added.¶ “That raises the implication that the U.S. needs to
invest in infrastructure, so that … the U.S. higher-skilled manufacturing and design jobs don’t
head south.”
NAFTA has helped Mexico’s economic state become closer to that of
the US
Villarreal and Fergusson, 2013 – specialists in International Trade and Finance
[M. Angeles & Ian F., “NAFTA at 20: Overview and Trade Effects”, Congressional Research
Service, 2/21/13, http://www.fas.org/sgp/crs/row/R42965.pdf, pg. 15-16]//GH
A number of studies have found that NAFTA has brought economic and social benefits to the ¶
Mexican economy as a whole, but that the benefits have not been evenly distributed throughout
¶ the country. 63 The agreement also had a positive impact on Mexican productivity. A 2011
World ¶ Bank study found that the increase in trade integration after NAFTA had a positive effect
on ¶ stimulating the productivity of Mexican plants.64 Most post-NAFTA studies on economic
effects ¶ have found that the net overall effects on the Mexican economy tended to be positive but
modest. ¶ While there have been periods of positive and negative economic growth in Mexico
after the ¶ agreement was implemented, it is difficult to measure precisely how much of these
economic ¶ changes were attributed to NAFTA. A World Bank study assessing some of the
economic impacts ¶ from NAFTA on Mexico concluded that NAFTA helped Mexico get closer to
the levels of ¶ development in the United States and Canada. The study states that NAFTA
helped Mexican ¶ manufacturers adapt to U.S. technological innovations more quickly; likely
had positive impacts ¶ on the number and quality of jobs; reduced macroeconomic volatility, or
wide variations in the ¶ GDP growth rate, in Mexico; increased the levels of synchronicity in
business cycles in Mexico, ¶ the United States, and Canada; and reinforced the high sensitivity of
Mexican economic sectors to ¶ economic developments in the United States.65¶ Other studies
suggest that NAFTA has been disappointing in that it failed to significantly improve ¶ the
Mexican economy or lower income disparities between Mexico and its northern neighbors.66¶
Some argue that the success of NAFTA in Mexico was probably limited by the fact that NAFTA ¶
was not supplemented by complementary policies that could have promoted a deeper regional ¶
integration effort. These policies could have included improvements in education, industrial ¶
policies, and/or investment in infrastructure.67¶ One of the more controversial aspects of
NAFTA is related to the agricultural sector in Mexico ¶ and the perception that NAFTA has
caused a higher amount of worker displacement in this sector ¶ than in other economic sectors.
Many critics of NAFTA say that the agreement led to severe job ¶ displacement in agriculture,
especially in the corn sector. One study estimates these losses to have ¶ been over a million lost
jobs in corn production between 1991 and 2000.68 However, while some ¶ of the changes in the
agricultural sector are a direct result of NAFTA as Mexico began to import ¶ more lower-priced
products from the United States, many of the changes can be attributed to ¶ Mexico’s unilateral
agricultural reform measures in the 1980s and early 1990s. Most domestic ¶ reform measures
consisted of privatization efforts and resulted in increased competition. Measures included
eliminating state enterprises related to agriculture and removing staple price ¶ supports and
subsidies.69 These reforms coincided with NAFTA negotiations and continued ¶ beyond the
implementation of NAFTA in 1994. The unilateral reforms in the agricultural sector ¶ make it
difficult to separate those effects from the effects of NAFTA.
NAFTA fixed a broken economy
USDA January 2008 *Government agency oversight of the Agriculture sector of the US
(United States Department of Agriculture, “FACT SHEET: North American Free Trade Agreement (NAFTA),”
http://www.fas.usda.gov/info/factsheets/NAFTA.asp)//MW)
The final provisions of the North American Free Trade Agreement (NAFTA) were fully implemented on January 1, 2008. Launched
on January 1, 1994, NAFTA is one of the most successful trade agreements in history and has
contributed to significant increases in agricultural trade and investment between the United States,
Canada and Mexico and has benefited farmers, ranchers and consumers throughout North America.¶ With full implementation, the
last remaining trade restriction on a handful of agricultural commodities such as U.S. exports to Mexico of corn, dry edible beans,
nonfat dry milk and high fructose corn syrup and Mexican exports to the United States of sugar and certain horticultural products
are now removed. The United States will continue to work with Mexico to build on the successes
achieved to date. Since 2005, the United States has invested nearly $20 million in programs and technical exchanges to assist
Mexico in addressing production, distribution and marketing-related challenges associated with the transition to free and open
trade.¶ The agricultural provisions of the U.S.-Canada Free Trade Agreement (CFTA), in effect since 1989, were incorporated into
the NAFTA. Under these provisions, all tariffs affecting agricultural trade between the United States and Canada, with a few
exceptions for items covered by tariff-rate quotas (TRQ's), were removed before January 1, 1998.¶ Mexico and Canada reached a
separate bilateral NAFTA agreement on market access for agricultural products. The Mexican-Canadian agreement eliminated most
tariffs either immediately or over 5, 10, or 15 years.¶ Benefits to U.S. Agriculture¶ In 2007, Canada and Mexico were, respectively, the
first and second largest export markets for U.S. agricultural products. Exports to the two markets combined were greater than
exports to the next six largest markets combined.¶ From 1992-2007, the value of U.S. agricultural exports worldwide climbed 65
percent. Over that same period, U.S. farm and food exports to our two NAFTA partners grew by 156 percent.¶ Trade with Mexico: It
estimated that U.S. farm and food exports to Mexico exceeded $11.5 billion in 2007 -- the highest
level ever under NAFTA. From 2001 to 2006, U.S. farm and food exports to Mexico climbed by $3.6 billion to $10.8 billion. U.S.
exports of soybean meal, red meats, and poultry meat all set new records in 2006.¶ In the years immediately prior to NAFTA,
U.S. agricultural products lost
market share in Mexico as competition for the Mexican market increased. NAFTA
reversed this trend. The United States supplied more than 72 percent of Mexico's total agricultural imports in 2007, due in
part to the price advantage and preferential access that U.S. products now enjoy. For example, Mexico's imports of U.S. red meat
and poultry have grown rapidly, exceeding pre-NAFTA levels and reaching the highest level ever in 2006.¶ NAFTA kept Mexican
markets open to U.S. farm and food products in 1995 during the worst economic crisis in Mexico's modern history. In the wake
of
the peso devaluation and its aftermath, U.S. agricultural exports dropped by 23 percent that year, but have since surged back
setting new annual records. NAFTA cushioned the downturn and helped speed the recovery because of
preferential access for U.S. products. In fact, rather than raising import barriers in response to its economic problems, Mexico
adhered to NAFTA commitments and continued to reduce tariffs.¶ Agricultural trade has increased in both
directions under NAFTA from $7.3 billion in 1994 to $20.1 billion in 2006.¶ Trade with Canada: Canada had been a steadily
growing market for U.S. agriculture under the U.S.-Canada Free Trade Agreement (CFTA), with U.S. farm and food exports reaching
a record $11.9 billion in 2006, up from $4.2 billion in 1990. Fresh and processed fruits and vegetables, snack foods, and other
consumer foods account for close to three-fourths of U.S. sales.¶ U.S. exports of consumer-oriented products to Canada continued to
set records in 2007 in virtually every category. Additionally, new value highs were recorded for vegetable oils, planting seeds, and
sugars, sweeteners, and beverage bases. With a few exceptions, tariffs not already eliminated dropped to zero on January 1, 1998.¶ In
1996, the first NAFTA dispute settlement panel reviewed the higher tariffs Canada is applying to its dairy, poultry, egg, barley, and
margarine products, which were previously subject to non-tariff barriers before implementation of the Uruguay Round. The panel
ruled that Canada's tariff-rate quotas are consistent with NAFTA, and thus do not have to be eliminated.¶
NAFTA key to economic and social growth in Mexico and US
Washington Times, 12 (5/14/12, “NAFTA key to economic, social growth in Mexico,”
http://www.washingtontimes.com/news/2012/may/14/nafta-key-to-economic-social-growthin-mexico/?page=all
CHIHUAHUA CITY, Mexico — The North American Free Trade Agreement, which went into
effect in 1994, has been the key driver of Mexico’s economic and social transformation of the
past 20 years, analysts say. NAFTA at first brought an explosion of low-skill-labor factories to
the Mexican side of the U.S. border. By the mid-2000s, the trade pact had triggered an
increasingly sophisticated manufacturing base that now reaches across Mexico’s 31 states. “What
we’re seeing now is a growth of industry in Mexico that requires more engineers,” said
Christopher Wilson, an associate with the Mexico Institute at the Washington-based Woodrow
Wilson International Center for Scholars. “To put a name on it, specifically, we’re talking about
automobiles and aerospace,” Mr. Wilson said. “Mexico is now graduating more engineers than
Germany every year.” A 40 percent jump in Mexico’s per capita gross domestic product since the
inception of NAFTA has brought with it an increasingly robust middle class. “What that means is
Mexicans are becoming more educated, and there is more investment in children, which is why
you are able to see the development of an aerospace sector,” Mr. Wilson said. About 47 percent
of Mexico’s 115 million people live in poverty, down dramatically from the 80 percent rate half a
century ago. Today, 98 percent of homes have electricity and more than 4 million people study
at the university level each year. Through early 2012, the nation of 112 million had an
unemployment rate of roughly 5 percent. The per capita salary of about $15,000 ranks the
country 81 out of 195 nations. North of the border, however, NAFTA’s reputation remains a topic
of heated debate. From the onset, when 1992 U.S. presidential candidate Ross Perot, an
independent, described the “giant sucking sound” that would be heard if the agreement were
implemented, critics have long decried the flight of U.S. manufacturing jobs to Mexico. U.S.
unemployment is running above 8 percent. Some NAFTA critics point to less publicized impacts
wrought by the trade agreement. “During the first few years, there was a massive overhaul of
Mexico’s agricultural trade rules through NAFTA,” said Todd Tucker, who heads Global Trade
Watch at the Washington-based nonprofit advocacy organization Public Citizen. “This meant
small-scale Mexican farmers were massively displaced by subsidized imports from companies in
the United States,” Mr. Tucker said. “That led to overcrowding in cities, as well as new
immigration into the United States.” To address the displacement, the Mexican government
attempted to create jobs programs in rural areas. But NAFTA had granted large U.S. companies
new powers to challenge such programs on grounds they interfere with potential profits. One
such challenge in 2009 saw a NAFTA tribunal order the Mexican government to pay $77.3
million in damages to the U.S.-based agribusiness giant Cargill, a maker and marketer of highfructose-corn-syrup products. “So now you have Mexican taxpayers paying big U.S. companies,”
Mr. Tucker said. “So the net impact of a trade agreement like NAFTA is that, on the one hand, it
creates displacement, and then on the other, Mexico is put in a bind in terms of how its
government can try to navigate social and economic problems created by the agreement.” Apart
from such concerns, others assert the increasingly globalized nature of Mexico’s manufacturing
economy has laid the groundwork for decades of future growth. U.S. investment soared Before
NAFTA, U.S. foreign direct investment in Mexico was roughly $15 billion. Today it’s more than
$90 billion. A growing number of European, Japanese and Chinese firms also are investing in
Mexican manufacturing. Aside from tapping a labor market where unions are largely irrelevant
and worker pay averages $6 per hour, foreign companies are attracted by Mexico’s proximity to
massive auto sales markets in the United States and Canada. Twenty-five vehicle-assembly
factories owned by foreign automakers - Ford, General Motors, Volkswagen, Honda and Nissan
- produced more than 2 million new cars and trucks from Mexico during 2011. “We’re not talking
about people putting brake pads on a car in a free-trade zone on the border,” said Christopher
Sabatini, senior director of policy at the Americas Society and Council of the Americas in New
York. “The downside [to the United States], and I say this as a dedicated free-trader, is that
Mexico is now on the verge of cutting into the higher-skilled manufacturing, design and
engineering jobs,” he added. “That raises the implication that the U.S. needs to invest in
infrastructure, so that … the U.S. higher-skilled manufacturing and design jobs don’t head
south.
NAFTA has achieved goals set out by Mexican government
Zepeda et al, 09 (Eduardo-Zepeda is inter-regional policy coordinator of the Development
Policy and Analysis Division, Department of Economic and Social Affairs at the United Nations
General Secretariat, Timothy A. Wise-Timothy A. Wise is Director of the Research and Policy
Program at the Global Development and Environment Institute, Tufts University, and leads its
Globalization and Sustainable Development Program, Kevin P. Gallagher-Kevin P. Gallagher is
Senior Researcher for the institute’s Research and Policy Program, and an associate professor in
the Department of International Relations at Boston University, December 2009, “Rethinking
Trade Policy for
Development: Lessons From Mexico Under NAFTA,”
http://carnegieendowment.org/files/nafta_trade_development.pdf
The Mexican government’s NAFTA-based economic strategy was successful in some important
ways. One of the goals was to increase trade, foreign investment, and productivity while
providing a more stable macroeconomic climate for business. The data suggest that those
objectives were largely achieved. TRADE GROWTH: Mexico’s exports increased 311 percent in
real terms between 1993 and 2007, and non-oil exports increased 283 percent. Exports to the
United States were up a similar percentage. The export growth was overwhelmingly in
manufacturing, with manufacturing exports rising from 43 percent of total exports in 1990 to 77
percent in 2007. Agricultural exports doubled in real terms from 1993–2007. FOREIGN
DIRECT INVESTMENT (FDI): FDI more than tripled between 1992 and 2006. Fueled by
investment liberalization under NAFTA, the majority (58 percent) came from the United States.
MACROECONOMIC STABILITY: Mexico tightened its fiscal and monetary policies. On their
own terms, these measures were a success. Inflation was brought below 5 percent, from over 80
percent in the 1980s. Since NAFTA, federal budget deficits have been low, about 1 percent of
GDP (at least until the current economic crisis when deficits initially increased to stimulate the
economy). This has been achieved while Mexico dramatically reduced its international debt to a
more sustainable level. RISING PRODUCTIVITY: Productivity increased about 80 percent in
Mexico’s domestic manufacturing sector, as Mexican firms were forced to compete with foreign
firms. The rise of productivity is at the core of the efficiency gains that are among the most
important goals of trade liberalization.
US-Mexico Trade key to their economies. They are large import and
export markets for each other
Villarreal, 12- Specialist in International Trade and Violence (M. Angeles Villarreal, “US-Mexico Economic
Relations: Trends, Issues, and Implications”, Published by congressional research service, published on August 9,
2012, http://www.fas.org/sgp/crs/row/RL32934.pdf)//NG
The United States is, by far, Mexico’s leading partner in merchandise trade, while Mexico is the ¶ United
States’ third-largest trade partner after China and Canada. Mexico ranks second among ¶ U.S. export markets
after Canada, and is the third-leading supplier of U.S. imports. U.S. trade ¶ with Mexico
increased rapidly since NAFTA entered into force in January 1994. U.S. exports to ¶ Mexico increased from $54.8 billion
in 1994 to $174.4 billion in 2011, an increase of 218%. ¶ Imports from Mexico increased from $51.6 billion in 1994 to $285.4 billion
in 2011, an increase ¶ of 453% (see Figure 1). In services, the United States had a surplus of $2.2 billion in 2010 (the most recent
available data). U.S. exports in services to Mexico totaled $3.8 billion in 2010, while ¶ U.S. imports totaled $1.6 billion.5¶ Total
services trade with Mexico is approximately equal to 1% ¶ of total merchandise trade with Mexico. ¶ The trade balance with Mexico
went from a surplus of $3.1 billion in 1994 to a deficit of $99.5 ¶ billion in 2011. In 2011, 13% of total U.S. merchandise exports were
destined for Mexico and ¶ 12% of U.S. merchandise imports came from Mexico. After the significant decrease in trade in ¶ 2009 that
resulted from the global economic downturn, U.S.-Mexico trade increased considerably ¶ in 2010 and 2011. Part of the increase in
trade with Mexico may be attributed to the increasing ¶ trade in energy. Crude petroleum oil accounts for 15% of total U.S. imports
from Mexico. The ¶ value of U.S. crude oil imports from Mexico increased over 500% since the 1990s, increasing ¶ from $6.3 billion
in 1996 to $39.8 billion in 2011. Mexico is the leading destination for U.S. ¶ exports in refined oil. The value
of U.S. refined oil exports to Mexico increased by $18.4 billion ¶ from 1996 to 2011, from $1.0 billion to $19.4 billion, approximately
an 1800% increase.6¶ As stated previously, Mexico relies heavily on the United States as an export market;
this reliance ¶ has diminished very slightly over the years. The percentage of Mexico’s total exports going to the ¶ United States
decreased from 83% in 1996 to 79% in 2011. Mexico’s share of the U.S. market has ¶ lost ground since 2002. In 2003, China
surpassed Mexico as the second-leading supplier of U.S. ¶ imports. The United States is losing market share of Mexico’s import
market. Between 1996 and ¶ 2011, the U.S. share of Mexico’s total imports decreased from 75% to 50%. China is Mexico’s ¶ secondleading source of imports
NAFTA is not the only cause of large deficits
Villarreal, 12- Specialist in International Trade and Violence (M. Angeles Villarreal, “US-Mexico Economic
Relations: Trends, Issues, and Implications”, Published by congressional research service, published on August 9,
2012, http://www.fas.org/sgp/crs/row/RL32934.pdf)//NG
Although some of the increase in U.S.-Mexico trade since the 1990s could be attributable to ¶
NAFTA, there are other variables that affect trade, such as exchange rates and economic ¶
conditions. Mexico’s currency crisis of 1995 limited the purchasing power of the Mexican people
¶ in the years that followed and also made products from Mexico less expensive for the U.S. ¶
market. Economic factors such as these played a role in the increasing U.S. trade deficit with ¶
Mexico. Several studies between 2003 and 2004 on the effects of NAFTA found that U.S. trade ¶
deficits with Mexico were largely driven by macroeconomic trends, and, in the case of U.S.-¶
Mexico trade, caused by the respective business cycles in Mexico and the United States.7¶
Strong ¶ U.S. growth in the 1990s, combined with Mexico’s deep recession in 1995, were the
main factors ¶ cited for the large deficits.8
NAFTA has Increased Trade Between the US and Mexico
Villarreal, 12- Specialist in International Trade and Violence (M. Angeles Villarreal, “US-Mexico Economic
Relations: Trends, Issues, and Implications”, Published by congressional research service, published on August 9,
2012, http://www.fas.org/sgp/crs/row/RL32934.pdf)//NG
The North American Free Trade Agreement (NAFTA) has been in effect since January 1994. ¶ There
are numerous
indications that NAFTA has achieved many of the intended trade and ¶ economic benefits as well as
incurred adjustment costs. This has been in keeping with what most ¶ economists maintain, that trade liberalization
promotes overall economic growth among trading partners, but that there are significant adjustment costs. ¶
Most of the trade effects in the United States related to NAFTA are due to changes in U.S. trade
and investment patterns with Mexico. At the time of NAFTA implementation, the U.S.-Canada ¶ Free Trade Agreement
already had been in effect for five years, and some industries in the United ¶ States and Canada were already highly integrated.
Mexico, on the other hand, had followed an ¶ aggressive import-substitution policy for many years prior
to
NAFTA in which it had sought to ¶ develop certain domestic industries through trade protection.
One example is the Mexican ¶ automotive industry, which had been regulated by a series of five decrees issued by the Mexican ¶
government between 1962 and 1989. The decrees established import tariffs as high as 25% on automotive goods
and had high restrictions on foreign auto production in Mexico. Under
restrictive trade policies.
NAFTA, Mexico agreed to eliminate these
NAFTA increased trade between US and Mexico- specific industries listed
Villarreal, 12- Specialist in International Trade and Violence (M. Angeles Villarreal, “US-Mexico Economic
Relations: Trends, Issues, and Implications”, Published by congressional research service, published on August 9,
2012, http://www.fas.org/sgp/crs/row/RL32934.pdf)//NG
Since NAFTA, the automotive, textile, and apparel industries have experienced some of the
more noteworthy changes in trading patterns, which may also have affected U.S. employment in
these industries. U.S. trade with Mexico has increased considerably more than U.S. trade with
other countries, and Mexico has become a more significant trading partner with the United
States since NAFTA implementation. ¶ In the automotive industry, the industry comprising the
most U.S. trade with Mexico, NAFTA ¶ provisions consisted of a phased elimination of tariffs,
the gradual removal of many non-tariff ¶ barriers to trade including rules of origin provisions,
enhanced protection of intellectual property ¶ rights, less restrictive government procurement
practices, and the elimination of performance ¶ requirements on investors from other NAFTA
countries. These provisions may have accelerated ¶ the ongoing trade patterns between the
United States and Mexico. Because the United States and ¶ Canada were already highly
integrated, most of the trade impacts on the U.S. automotive industry ¶ relate to trade
liberalization with Mexico. Prior to NAFTA Mexico had a series of government ¶ decrees
protecting the domestic auto sector by reserving the domestic automobile market for ¶
domestically produced parts and vehicles. NAFTA established the removal of Mexico’s
restrictive ¶ trade and investment policies and the elimination of U.S. tariffs on autos and auto
parts. By 2006, ¶ the automotive industry has had the highest dollar increase ($41 billion) in
total U.S. trade with ¶ Mexico since NAFTA passage.
NAFTA has drastically helped Mexico’s Economy
Villarreal, 12- Specialist in International Trade and Violence (M. Angeles Villarreal, “US-Mexico Economic
Relations: Trends, Issues, and Implications”, Published by congressional research service, published on August 9,
2012, http://www.fas.org/sgp/crs/row/RL32934.pdf)//NG
A 2005 World Bank study assessing some of the economic impacts from NAFTA on Mexico ¶
concluded that NAFTA helped Mexico get closer to the levels of development in the United ¶
States and Canada. The study states that NAFTA helped Mexican manufacturers adapt to U.S. ¶
technological innovations more quickly and likely had positive impacts on the number and ¶
quality of jobs. Another finding was that since NAFTA went into effect, the overall ¶
macroeconomic volatility, or wide variations in the GDP growth rate, has declined in Mexico. ¶
Business cycles in Mexico, the United States, and Canada have had higher levels of synchronicity
¶ since NAFTA, and NAFTA has reinforced the high sensitivity of Mexican economic sectors to ¶
economic developments in the United States.54¶ Several economists have noted that it is likely
that NAFTA contributed to Mexico’s economic ¶ recovery directly and indirectly after the 1995
currency crisis. Mexico responded to the crisis by ¶ implementing a strong economic adjustment
program but also by fully adhering to its NAFTA ¶ obligations to liberalize trade with the United
States and Canada. NAFTA may have supported the ¶ resolve of the Mexican government to
continue with the course of market-based economic reforms, resulting in increasing investor
confidence in Mexico. The World Bank study estimates ¶ that FDI in Mexico would have been
approximately 40% lower without NAFTA.55¶ One of the main arguments in favor of NAFTA at
the time it was being proposed by policymakers ¶ was that the agreement would improve
economic conditions in Mexico and narrow the income ¶ gap between Mexico and the United
States. Studies that have addressed the issue of economic ¶ convergence56 have noted that
economic convergence in North America might not materialize ¶ under free trade as long as
“fundamental differences” in initial conditions persist over time. One ¶ study argues that NAFTA
is not enough to help narrow the disparities in economic conditions ¶ between Mexico and the
United States and that Mexico needs to invest more in education; ¶ innovation and
infrastructure; and in the quality of national institutions. The study states that ¶ income
convergence between a Latin American country and the United States is limited by the ¶ wide
differences in the quality of domestic institutions, in the innovation dynamics of domestic ¶
firms, and in the skills of the labor force.57 Another study also notes that the ability of Mexico to
¶ improve economic conditions depends on its capacity to improve its national institutions,
adding ¶ that Mexican institutions did not improve significantly more than those of other Latin
American ¶ countries during the post-NAFTA period.58¶ Mexican wages rose steadily from the
early 1980s until the mid-1990s, when the currency crisis ¶ hit. After a drop in average real
wages in 1996 of 15.5%, real wages increased steadily until 2000, ¶ when the average rate of
growth was 11.8%. Since then the average rate of growth has only ¶ varied slightly. Mexico’s trade
liberalization measures may have affected the ratio between skilled ¶ and non-skilled workers in
Mexico. In 1988, the real average wage of skilled workers in Mexico’s ¶ manufacturing industry
was 2.25 times larger than that of non-skilled workers. This ratio ¶ increased until 1996, when it
was about 2.9, but then remained stable until 2000.59 The World ¶ Bank study found that
NAFTA brought economic and social benefits to the Mexican economy, ¶ but that the agreement
in itself was not sufficient to ensure a narrowing of the wage gap between ¶ Mexico and the
United States. The study states that NAFTA had a positive effect on wages and ¶ employment in
some Mexican states, but that the wage differential within the country increased ¶ as a result of
trade liberalization.60
NAFTA has quintupled Trade between US and Mexico
Lee and Wilson 12- Associate at the Mexico Institute of the Woodrow Wilson International Center for
Scholars, (Erik Lee and Christopher E. Wilson, “The State of Trade, Competitiveness, and Economic Well-Being in the
US-Mexico Border Region”, published by the North American Center for Transborder Studies, published in June
2012, http://www.wilsoncenter.org/sites/default/files/State_of_Border_Trade_Economy_0.pdf)//NG
The economic vitality of the U.S.-Mexico border region—which includes manufacturing, ¶ infrastructure, human
capital and tourism, among other elements—is a key part of this overall ¶ economic success. With more than a
billion dollars of commercial traffic crossing the border ¶ each day, it is literally at the U.S.-Mexico border region where “the rubber
hits the road” in ¶ terms of this expanded regional trade. This is because more than 70% of total binational ¶ commerce
passes through the border region via trucks. This already massive truck traffic is ¶ expected to increase significantly in the
coming decades (see Figure 1 below). Since the implementation of the North American Free Trade Agreement in
1994, total trade ¶ between the two countries has more than quintupled, and goods and services
trade is now at a ¶ half trillion dollars per year. An estimated six million U.S. jobs and probably
even more Mexican ¶ jobs depend on bilateraltrade.2
Environment
NAFTA partners promotes Environmental Protection
Foreign Affair and International Trade Canada No Date,
http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/naftaalena/broch-main.aspx
NAFTA partners recognize the importance of enhancing environmental protection, and the need
to cooperate in the enforcement of environmental laws. In order to achieve these goals, NAFTA
partners have established several institutions through the North American Agreement on
Environmental Cooperation. Along the U.S.-Mexico border the North American Development
Bank and the Border Environmental Cooperation Commission are working on the development
and financing of environmental infrastructure projects. To date, 40 projects have been certified.
The Commission for Environmental Cooperation (CEC) promotes environmental protection and
conservation through projects for pollution prevention, waterways management and wildlife
protection, among others. Through the North American Fund for Environmental Cooperation,
the CEC has financed over 127 community based environmental projects in Canada, Mexico and
the United States.
NAFTA beneficial for trilateral cooperation
Schott 08
[Jeffrey J. Peterson Institute for International Economics. The North American
Free Trade Agreement: Time for a Change? Page 13. November 21-23, 2008.
http://www.iie.com/publications/papers/20081218schott.pdf. //SRSL]
Climate-change initiatives could change NAFTA’s profile in the US policy debate and create
constructive channels for trilateral cooperation. Along with border and energy security, these
are the issues that will bring the three countries together in a new dialogue that can benefit all
the peoples of North America.
NAFTA renegotiation key to reducing emissions
Schott 08
[Jeffrey J. Peterson Institute for International Economics. The North American
Free Trade Agreement: Time for a Change? Page 13. November 21-23, 2008.
http://www.iie.com/publications/papers/20081218schott.pdf. //SRSL]
Climate change presents a big challenge for the NAFTA partners. North America is home to
about 7 percent of the world’s population but is responsible for 25 percent of global emissions of
the most important greenhouse gas (GHG), carbon dioxide. And North American GHG releases
have grown significantly since 1990 in all three countries (see table 8). States and provinces are taking the lead
in developing regulatory regimes that seek to reduce GHGs. Invariably such policies affect the competitiveness of
domestic industries, which have to bear the burden of investing in new equipment or paying
carbon taxes, and seek to influence the composition of national strategies under construction.
Frictions already exist between state and federal policies, and competitiveness concerns
threaten to spill over the NAFTA borders. For example, in the United States, numerous bills on
the congressional docket endorse alternative-energy subsidies and border taxes against carbonintensive imports, presaging new barriers to North American trade. Similar legislation is being vetted in
Canada. Before policies are locked in statutory concrete, NAFTA partners should consider several
avenues of cooperation: NAFTA partners need to agree on common industrial standards and
competitiveness provisions that will apply to regional trade. Cooperative efforts are essential for
monitoring GHG emissions and creating efficient trading markets for North American emissions
permits. If the United States and Canada both adopt carbon taxes, they should agree on the same base and rates to minimize
border adjustments. This principle also applies to auctioned CO2 permits. In light of Mexico’s interest in reducing
GHG emissions, the three countries could innovate on ways to extend technical and financial
assistance to help developing countries reduce GHG emissions; these precedents could then
help inform the global negotiations.
NAFTA needs to change environmental provisions
Schott 08
[Jeffrey J. Peterson Institute for International Economics. The North American
Free Trade Agreement: Time for a Change? Page 13. November 10-11, 2008.
http://www.iie.com/publications/papers/20081218schott.pdf. //SRSL]
The NAFTA partners need to examine the environmental provisions in their
various bilateral free trade agreements and agree to upgrade the NAFTA regime
drawing on best practices from their other accords —especially recent US and Canadian pacts with
Peru and Colombia. The US FTAs with these countries contain the most detailed set of environmental provisions of any trade
agreement and incorporate the new rights and obligations mandated by the May 2007 bipartisan accord on US trade policy between
the Democratic-led Congress and the Bush administration.
Border Security
NAFTA brings a need for there to be extreme cooperation between
NAFTA countries over border control
Cottam and Marenin, 05-Political Psychologist- (Marth L. Cottam and Otwin Marenin, “The
Management of Border Security in NAFTA: Imagery, Nationalism, and the War on Drugs”, Published in The
International Criminal Justice Review, Published in May 2005, http://libarts.wsu.edu/isic/research/pdf/bordersecurity-nafta.pdf)//NG
NAFTA is the Western Hemisphere’s version of globalization. It envisions a free trade ¶ area that
requires the relatively unrestricted movement of people, goods and services across the ¶ internal
borders, ultimately leading to increased political, social, and cultural interdependence ¶ among
the three member states. While the proponents of NAFTA emphasize positive economic
outcomes for the three partners, the dependence of those outcomes on open borders inevitably
brings with it the prospect of greater opportunities for transnational criminal activities. The easy
¶ movements of legal capital, services, goods and workers require less border control. Yet, at the ¶
same time, to prevent illegal flows of capital, goods, and workers, the border needs to be more
fortified. And as internal economic integration strengthens, greater emphasis on controlling the
common external NAFTA borders will become a significant policy issue as well. ¶ Border control
is caught in a vice - control must be exercised to prevent illegal trans border acts but legal
commercial and people traffic cannot be brought to a halt. The examination ¶ of the responses of
the NAFTA partners to this reality at their national borders is the topic of this ¶ paper. We argue
that an appropriate and effective balance between opening and fortifying the ¶ borders, enabling
and preventing traffic simultaneously, will only be achieved through ¶ coordinated and
cooperative security and law enforcement policies by governments and agencies ¶ on both sides
of the C-US and M-US borders. Specifically, we ask whether law enforcement ¶ cooperation at
the internal borders of NAFTA will follow similar paths at the Canada-US and ¶ Mexico-US
borders and will lead to the development of a common external NAFTA border ¶ control policy.
We argue that the answer is no or not likely to both questions.
Mexican Electricity Sector
Mexico’s electricity sector’s survival depends on significant US
investment in the future
Morales, 11 (Isidro—professor at the Monterrey Institute of Technology and Higher
Education, Santa Fe Campus, in Mexico City. Morales’ main research areas are the geopolitics
and geo-economics of energy, trade, and investment markets; the political economy of regional
integration; Mexican-US trade, and investment markets, 4/29/11, “Energy Trade and Security
Issues at the Mexico-US Border,” http://bakerinstitute.netfu.rice.edu/publications/EF-pubMoralesTrade-04292011.pdf
So far, Mexico has remained a net exporter of electricity to the United States, and 79% of overall
exports come from the Baja California interconnections. In the years to come, exports are expected to grow in
this region, since in 2009 CFE signed an agreement with Los Angeles authorities to export up to 100 mw of electricity from
geothermal sources located in Mexicali (SENER 2009c; SENER 2010d, 101). Table 2 of the Annex clearly depicts the evolution of
foreign trade in electricity between the two countries during the past 10 years. Mexico’s Ministry of Energy expects electricity
consumption to increase on a historical basis, that is, at rates above gross domestic product (GDP) growth, which means there is
plenty of room to improve savings and efficiency. Estimating a GDP AARG of 3.5% to 2025, the ministry estimates electricity
consumption to grow at 4.3% annually (SENER 2010d, 126). This means that overall net capacity must be increased
by 48% from the present to 2025. Future investments are needed in this sector in order to
increase capacity and power supply in the years to come. It is anticipated that approximately US$6.486 billion
must be invested annually if the scheduled target is to be achieved (SENER 2010d, 148 and 183). A large portion of these
investments is scheduled to come from private utilities, suggesting that most of the attractive
opportunities for private businesses are in this sector. However, as long as prices of electricity
and fuels, such as natural gas, remain nontransparent and under the control of state monopolies
and the Ministry of the Treasury, the prevalence of noncompetitive energy markets will remain a
deterrent as private utilities plan future investments.
A2 NAFTA Bad – Economy
NAFTA is awesome and the critics are wrong
Lustig, 12
(PhD in Economics from the University of California at Berkeley, President of the Universidad de las AméricasPuebla, Senior Advisor and Chief of the Poverty and Inequality Unit, Department of Social Programs and Sustainable Development
at the Inter-American Development Bank Director of the 2000/2001 World Development Report (Nora C., “NAFTA: Setting the
Record Straight” 2012 Updated,
http://www2.econ.iastate.edu/classes/econ455/lapan/Readings/NAFTA,%20Setting%20the%20Record%20Straight.pdf)
Has NAFTA failed? The short answer is no. Though it will take many more years before a meaningful assessment of the
agreement can be made, NAFTA's
expected benefits are beginning to materialize. Trade among the three
been expanding to record levels, and the number of U.S.-Mexican business
partnerships is on the rise. Moreover, despite the 45 percent real devaluation of the peso, the 7 percent drop in
Mexican output, and Mexico's 22 percent fall in real wages during 1995, U.S. exports to Mexico were much less
affected than Japanese or European exports, largely due to NAFTA. Indeed, while exports to Mexico
from the rest of the world (notably Japan and the European Union) fell by about 25 percent, U.S. exports
contracted by less than 2 percent. Despite these positive trends, many Americans within
Congress and outside it are proclaiming that NAFTA was a mistake. To a large extent, the statements
against NAFTA are based on erroneous beliefs or egregious distortions. NAFTA is
blamed for U.S. job losses or declining living standards of workers, particularly among unskilled persons. In
reality, the impact of NAFTA on gross job displacement in the United States has been
negligible. Furthermore, there is some evidence that the net employment effect (the difference between jobs
displaced and jobs created) has been positive. Another argument used against NAFTA is the fact that following the Mexican
NAFTA countries has
peso crisis the United States is running a trade deficit with Mexico. However, unless it is the result of restrictions in market access, a
deficit with any one country is by no means a cause of distress in the country running the deficit .
NAFTA's success must be measured by the total amount of trade it creates, regardless of which country is in deficit. Finally, though
some of NAFTA's critics argue that the agreement was a cause of the Mexican peso crisis, in reality the
crisis was caused by factors unrelated to NAFTA. In fact, NAFTA is an important contributing
factor to Mexico's economic recovery because of its impact on export performance and foreign
direct investment flows.
NAFTA only causes short-term job losses – reduced price for goods
benefits the economy
Kapenda 09
[Simon Kapenda. Economist and entrepreneur. NAFTA, the Good, the Best, and the Ugly for the Americas.
http://princesimon.wordpress.com/2009/02/05/nafta-the-good-the-best-and-the-ugly-of-the-free-trade/. February 5,
2009.//SRSL] All these numbers and reports are good and highly enticing, however, more and more people in the U.S. have lost
their jobs. According to the United States Department of Labor, about 600,000 jobs were lost towards the end of January 2009
alone. One can easily blame NAFTA, India, China or other countries offering lower wages that in turn cause to attract many US
companies to ship jobs to these countries. I am of the opinion that from a macro-employment perspective, on
a long-term basis, NAFTA is not entirely the only cause of the current high rise of
unemployment in the United States. It’s actually true as reported that most U.S.
companies have shipped and outsourced jobs overseas, as a result of NAFTA.
However, most of these jobs are low paying jobs that most Americans wouldn’t have
wanted in the first place. In a short run, it may be true that NAFTA has caused the
high rise of unemployment in the U.S., but looking at the long term, as most
companies choose to have their goods and services manufactured in countries
with low paying wages, these companies then transfer the goods, as manufactured
in foreign countries, and sell them in the United States, at a far cheaper price than
if they were manufactured locally. Also, as these companies transfer these goods
from their overseas plants to the United States, they are causing to the price labor
to increase, meaning that people with more experience and or better education
and training are now, in a long run, able to find better and high paying
employment. In addition, overseas customers, even for the same low paid labors, are now able to afford to buy American
goods and services, even prior to being shipped back to the U.S., and in return, the U.S. companies can then repatriate profits from
their foreign operations and reinvest it back within the U.S.
moar
Sommer, 08 (Heidi, Junior with the National Center for Policy Analysis “ The Economic
Benefits of NAFTA to the United States and Mexico” 6/16/08
http://www.ncpa.org/pub/ba619)// ST
The United States is the largest source of foreign direct investment (FDI) in Mexico, accounting
for over half of the $19 billion invested there in 2006. In addition, U.S. companies contribute
around 50 percent of the investment funds for Mexico's maquiladoras — factories that assemble
products (such as apparel, auto parts and electronic goods) from imported U. S. components for export
back to the United States. These firms account for almost half of Mexican exports and over $41
billion in annual sales. Investment in Mexico has helped increase the efficiency of U.S. domestic
production. Many manufacturing companies are able to reduce costs by shifting assembly of
their products to the maquiladoras. This has helped boost U.S. manufacturing output,
which rose by almost 60 percent from 1993 to 2006. By contrast, output increased only 42 percent in the 13 years
before NAFTA.