Rebecca Watts
NACLA Report on the Americas, Volume 51, Issue 1, March 29, 2019

Animal Político, April 15, 2019

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What does NAFTA 2.0 mean for Mexican president Andrés Manuel López Obrador’s reform agenda?

“Mexico is making a fortune on NAFTA... With all of the money they make from the U.S., hopefully they will stop people from coming through their country and into ours,” President Donald Trump tweeted this past April. Since the beginning of his campaign and throughout his presidency, Trump has sought to channel the resentment that many U.S. workers feel toward the North American Free Trade Agreement (NAFTA), painting Mexicans as “bad hombres” that set the terms of the trade pact to benefit Mexico and at the expense of the United States. He’s pledged to renegotiate or exit NAFTA since 2015, and has referred to it as “one of the WORST Trade Deals ever made. The U.S. lost thousands of businesses and millions of jobs.”

While it’s true that nearly a million U.S. jobs were certified as lost due to NAFTA, according to the Economic Policy Institute (EPI), the trade deal is not a story of the U.S. versus Mexican workers, but of corporate interests versus working people in both countries, as well as in Canada, the third country bound by the agreement. In Mexico, NAFTA has failed to improve the country’s standard of living, decimated the agricultural sector, and contributed to a boom in migration.

NAFTA 2.0 (officially the United States, Mexico, and Canada Agreement, or USMCA) goes by many names. Trump has said, “It’s not NAFTA redone, it’s a brand new deal,” though in many ways the agreement is largely a rebranding of the original. Canada is referring to it as CUSMA, putting Canada’s name first, while Mexico is calling it the Tratado entre México Estados Unidos y Canadá (Treaty Between Mexico, the United States, and Canada), or T-Mec. Whatever its name, it was signed on November 30, and, at the time of writing, is awaiting ratification in all three countries.

Version 2.0 largely includes the same terms as the original. But what is new is the recently-elected president of Mexico, Andrés Manuel López Obrador (frequently referred to as AMLO), who has previously spoken out strongly against NAFTA—though that criticism has softened in recent years—who continues to condemn a failed neoliberal economic model, and whose election holds the promise of a major break with the status quo in Mexico. AMLO took office with an ambitious reform agenda he’s calling the “fourth transformation” of Mexico. The question is whether, under NAFTA 2.0, he’ll be able to fulfill that promise, or if the latest agreement has locked in the same failed development model, compromising his plans before he starts.

Read the rest of the article here at NACLA Report on the Americas.


Rebecca Watts is a Program Associate at the Center for Economic and Policy Research (CEPR) in Washington, DC.