Canada and the Americas: Free trade can be deadly

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One of Prime Minister Stephen Harper's first major foreign visits after being elected to his first minority government in 2006 was to Latin America and the Caribbean. The trip aimed to promote a Canadian foreign policy focused on establishing "new partnerships in the Americas."

Canada has aggressively pushed to establish trade agreements in the Americas and, in pursuit of this, signed bilateral trade deals with Peru and Colombia in 2009. Concurrent to the push towards more trade pacts in the Americas, Canada has cut the number of nations receiving bilateral aid through the Canadian International Development Agency (CIDA).

Today's Canadian foreign aid policy sees a smaller number of countries being targeted for aid through the Conservatives' "countries of concentration" policy which limits aid to twenty nations, focusing on trade policy with Latin America and the Caribbean, while aid to African nations including Kenya, Cameroon and Rwanda has been cut.

These shifts in policy are undoubtedly influenced by corporations in Canada that hold significant sway over government economic policy, such as Canadian mining and oil and gas corporations.

The governments of Canada and the U.S. have since shifted their focus to creating bilateral and regional trade deals in the Americas, spelling out a new policy battle ground for the upcoming years that will undoubtedly be fought out both on the streets, and within the halls of power.

In the interview which follows, Laura Carlsen, director of the Americas Program of the International Relations Center, based in Mexico City, outlines some specific economic and social impacts of existing free trade agreements on Mexico and also throughout the Americas.

Stefan Christoff: First, can you outline the social and economic impacts of NAFTA as related to migration from Mexico to the U.S. and also within the contemporary context of the push by the U.S. towards bilateral agreements?

Laura Carlsen: NAFTA marked the first time that there was a major trade agreement between two developed countries -- including the largest economic power in the world -- and Mexico, a developing country, which presents major challenges in negotiating a free trade agreement.

Despite the inequality between the economies of Mexico and the U.S., in regards to size and productive capabilities, the agreement basically delivered tremendous privileges to transnational corporations in the U.S. to the detriment of Mexico.

Since NAFTA has been in effect we have seen serious damage done by the accord on Mexican society. There have been serious impacts on people in the countryside and also to small-to-medium size industries throughout the country, leading to growing rates of unemployment and a doubling of the rate of migration from Mexico to the U.S. Economic impacts of NAFTA have created serious internal displacement and forced migration.

SC: Similar trade policies to NAFTA in Latin America have played a major role in forced migration. Could you address for example how the Central American Free Trade Agreement (CAFTA) has impacted migration?

LC: The CAFTA agreement is also going to lead towards increased outward migration. All the Central American countries have been going through an economic restructuring along the lines of these free trade agreements, leading to free trade zones where assembly workers are dealing with [working] conditions that are very bad and wages that are very low.

People are displaced from the [rural areas] in large numbers due to foreign imports upsetting local market values, creating the conditions for forced migration.

Essentially these [trade] agreements lock in an export-oriented model of development, a model which according to other experiences in Latin America, particularly in Mexico, benefits a very small group of people, while causing serious dislocation for many social sectors.

Along the Guatemala-Mexico border a couple years ago most of the people waiting to cross into Mexico were then going to move on to the U.S.: farmers who had been displaced by imports or by growing corporate control over prices of commodities such as coffee; farmers who could not make a basic living from harvesting their crops.

CAFTA will only increase this process of displacement, as the foreign businesses that move in work on an export-oriented farming production model, not employing a huge amount of local people, while the economic benefits are directed towards a very small social sector.

Often it is claimed that such agreements bring in foreign investment, however the lived experience is that foreign investment doesn't come pouring in the minute you sign an agreement. On the contrary, the economic impact is generally negative. In the majority of Latin American countries subject to such trade agreements, we are seeing a net outflow of capital.

SC: In your time within regions impacted by NAFTA, can you outline how this agreement has impacted people, specifically small farmers and peasants?

LC: It is best to examine a specific town, for example in a village within the Mixteca Indigenous region in Oaxaca, in the mountains where many families live [through] a combination between subsistence farming and selling corn on the regional market.

As NAFTA came into effect, we began to see large amounts of subsidized cheap agricultural imports, specifically corn, coming in from the U.S., causing domestic prices in Mexico to dive.

For local farmers who rely on selling small amounts of corn to survive this was a devastating shift in the local and regional markets in Mexico, which undermined their ability as family farmers to survive.

Given the U.S. corn imports, the Mixteca region in Oaxaca has become one of the major out-migration regions in Mexico, with townships that are showing negative population growth, specifically due to out-migration to the U.S.

Many local farmers in Mexico who use traditional farming methods, working often without mechanized equipment, without fertilizing chemicals, were displaced by NAFTA, given cheap US imports.

It was clear that such farmers would face displacement even before the agreement was signed. A U.S. trade representative outlined at the time of NAFTA's signing that U.S. trade analysts were expecting around three million local farmers in Mexico to be displaced by the agreement. It was argued that these farmers would move into more modern and competitive industries, particularly the industrial corridors that were being constructed in the countryside, often by foreign corporations.

However, in reality, the massive displacement happened, in the millions, but the new jobs never arrived to Mexico, so people were left with nothing. Today many local farmers are simply growing corn to survive. Often women are left on the farms with the family to survive while the men travel to the U.S. to work. Major rural displacement caused by NAFTA has been very clear.

In villages within Oaxaca and throughout the country many, many people are migrating to work in the U.S. due to trade policies that have made survival at home impossible. Traditionally, there were always regions in Mexico where workers would travel to work in New York City or Los Angeles. This was a labour circuit -- however, traditionally, this was a much smaller migration, and most often the migration wasn’t permanent.

Mexican workers would travel to the U.S. to work during the harvests and then travel back to Mexico to work, however given that the border has been so hardened and militarized today, the migration to the U.S. tends to be much more permanent. [This was] exactly the opposite result to the expressed intentions from U.S. officials on why the border with Mexico was hardened.

Displacement has spread throughout Mexico, as the inability to make a decent living is now impacting multiple regions, as a result of such trade policies.

SC: In examining the impacts of free trade on peasant communities in Latin America, do you have reflections on the reactions from social movements in Peru and Colombia to the U.S. push for bilateral accords with these two nations? Do you think that bilateral deals with the U.S. will have similar results to regional trade accords in Latin America?

LC: Many of the general tendencies that we see in NAFTA basically hold to bilateral agreements, there have been few substantial modifications.

Democrats in the U.S. claim that the Peru agreement is a new model for trade agreements, given there are a couple clauses concerning labour rights and public health; however the agreement is still based on the same trade model.

Essentially this agreement -- like NAFTA -- is based on a forum of development in which a developing country opens up markets completely, while granting a whole series of privileges to foreign investors and [hoping] that economic development trickles down to weaker social sectors.

However, this economic model ensures that there is no trickle down, while a country loses the ability to maintain national development policies that also support the weakest in society.

Peru's bilateral agreement with the U.S. includes clauses for the privatization of social services, despite the fact that throughout Latin America, in other countries, privatization policies often lead to cutting off access to basic social services for the poorest.

So the key point is that these 'free trade' policies, in Central America, in Peru, in Mexico, equal increased inequality. Essentially, such trade agreements drive the gap between the rich and poor to grow.


Stefan Christoff is a journalist and community organizer. This interview was originally produced in audio format for the Fighting FTAs project, an international project that provides a global picture of free trade agreements (FTAs), and insight into struggles being waged by social movements fighting back.

A version of this interview was originally published in The Dominion, and is reprinted here with permission.

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