A truism in historical, political and media analysis is that our current times are often defined by decisions or factors long in the past that are rarely discussed anymore, and are sometimes even relegated to the dustbin of obscurity. While some current problem rankles our modern society, its root causes can often comfortably exist in relative anonymity in the past, and current pundits are often left to present a kind of context-free, history-free version of events that leaves the reader or viewer in a fog of uncertainty and mystification. One such example is the North American Free Trade Agreement (NAFTA), which took effect on January 1, 1994. NAFTA isn’t discussed much in current political discourse, but it’s one of the most consequential policy decisions of the past 50 years and is a core component of the modern economy. The trade deal, which received bipartisan support in Congress at the time, was negotiated by President George H.W. Bush with Canada and Mexico from 1990 to 1992, and Bush subsequently signed the deal into law shortly before Bill Clinton’s inauguration in early 1993. NAFTA has since been renegotiated into the similar U.S.-Mexico-Canada (USMCA) trade agreement in 2020, but its legacy and consequences certainly endure. NAFTA was a controversial issue during the 1992 presidential election, with independent candidate Ross Perot hammering both Bush and Clinton for supporting the deal. Perot said it would lead to a “giant sucking sound” of jobs rushing to Mexico. Perot’s attacks were effective, as he received the highest percentage of votes for an independent candidate in a general election in American history. However, Perot’s attacks primarily stuck to the incumbent Bush, who oversaw the negotiation of the deal, and didn’t have quite the same effect on the younger Clinton, who didn’t have Bush’s extended national track record nor his blue-blood, patrician bearing. Clinton also received notable criticism from the left wing of his own party and trade unions, but seemed largely oblivious to them and sold the legislation with enormous confidence and conviction. In the early 90s, there was a full-court press by the American media and political class to depict NAFTA as an economic panacea, a deal that would both protect the essential components of the American economy while simultaneously launching the U.S. into an unlimited utopian future. For the most part, NAFTA wasn’t particularly difficult to sell the American public, as it was couched in politically expedient buzzwords such as “growth”, “innovation”, “future” and “opportunity.” Its potentially negative consequences were written off as the concerns of stick-in-the-mud types caught in the past or economically protectionist fringe elements. However, in Mexico, it was quite different. The Zapatista guerrilla army in southern Mexico launched an armed rebellion against the free trade deal, leading to days of fighting with the Mexican government and dozens of deaths. As an article from the Economic Policy Institute details, “Clinton and his collaborators promised that the deal would bring ‘good-paying American jobs’, a rising trade surplus with Mexico, and a dramatic reduction in illegal immigration. Instead, NAFTA directly cost the United States a net loss of 700,000 jobs. The surplus with Mexico turned into a chronic deficit. And the economic dislocation in Mexico increased the flow of undocumented workers into the United States. Nevertheless, Clinton and his Republican successor, George W. Bush, then used the NAFTA template to design the World Trade Organization, more than a dozen bilateral trade treaties, and the deal that opened the American market to China, which Increased migration from Mexico to the U.S. in recent decades is a perfect example of an issue with material, concrete causes that our political class refuses to explain in direct, honest terms. Elevated Lending CDC Proud to help businesses grow with SBA 504 loans. 505-627-6816 505-200-2358 | ELCDC.com | JulyLiz@elcdc.com “I’m here to guide you through the loan process. Contact me to get started.” July Liz - Business Development Officer Your new storefront Your new storefront ELCDC.com Unlock the Capital Your Business Needs to Thrive Unlock the Capital Your Business Needs to Thrive 17
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