NAFTA REFORM

MEHUL MITTAL
You can take to routes in this debate. First you can go for NAFTA is good in the squo and trade is bad. The second option is that NAFTA is too corrupt and reform wont help, and the trading you force will make it worse.

Imperialism links
US involvement in Mexico furthers the empire and causes mass violence
Liberation 13Newspaper (Imperialism, immigration and Latin America, April 27, 2013, http://www.pslweb.org/liberationnews/newspaper/vol-7-no-6/imperialism-immigration-and-latinamerica.html)//RT Since the last immigration upsurge in 2006, the Obama administration, the Democrats and the Republicans have done everything in their power to ignore the voices of undocumented immigrants, to water down the DREAM Act, to increase the repressive forces at the border, and deport over 1 million immigrants and separate families. Now, after the 2012 election demonstrated the enormous significance of the Latino vote, the political establishment has turned around and promised immigration reform, albeit one tailored to private capitalist interests. We frequently hear how immigrants are merely seeking a better life for their children and trying to fulfill the American Dream, but there is no discussion of why the world is such that people cannot sustain their families in their home countries and must migrate to the United States. Much of the rhetoric around this reform
on both sides of the Congressional debateaccept the terms that undocumented immigrants are criminals. Neither side questions the culpability of U.S. economic and military policies in driving global migration. A common

symbol used in the immigrant rights movement is that of a monarch butterfly. It symbolizes the natural tendency to migrate in certain organisms; they travel long distances in order to adapt to changing environments. However, unlike natural migration patterns developed over thousands of years, modern immigration in the era of advanced capitalism (imperialism) is closer to a forced migration. Migration is as old as humanity itself, with large-scale migrations typically produced by natural disasters and the
physical unsustainability of the existing community. Today, migration is caused less by natural inadequacies and more by countries integration into a global economy organized around the profit motive, and the deliberate underdevelopment of certain countries to the benefit of others.

For Latinos living in the United States, their violent displacement is the faded reflection of the violent political and economic intervention waged upon their home country. Central America: Dictatorships, civil war While
the Cold War era and Reagans vicious intervention in Latin America are presented as a distant memory in the narrative of U.S. foreign policy, its effects are still being felt. In 2011, nearly 3.1 million Central American immigrants resided in the United States, representing close to 8 percent (3.1 million) of the country's 40.4 million immigrants. This displacement is due almost exclusively to the effects of the civil wars in El Salvador and Nicaragua in the 1980s. El Salvador estimated that more than 25 percent of its population migrated or fled during the country's civil war, which began in 1979 and ended in 1992. During the early to mid-1970s, there was a rise of revolutionary forces fighting against U.S.backed dictatorships in El Salvador and Nicaragua. In 1979 the Frente Sandinista para la Liberacin Nacional (FSLN) toppled the Somoza regime and renewed the hopes for revolution in the region. Inspired, the Frente Faribundo Mart para la Liberacin Nacional (FMLN) united several political tendencies of the left and sought to bring about the same change in El Salvador. With the election of Reagan, whose ardent anticommunism, aggressive expansionism and free market fundamentalism gave a new wind to the U.S. ruling class, Central America became the battlefront against the tide of revolution.

Reagan began funding El Salvador's right-wing ruling party ARENA (Alianza Republicana Nacionalista) to the tune of $1 million per day, a rate which would last for almost 10 yearsin a country the size of Massachusetts. Along with funding, the U.S. trained army death squads which terrorized both countries. Along with the mass killings of its people, Nicaragua suffered through a brutal economic blockade meant to strangle the newly formed Sandinista government. The civil war and forced poverty pushed thousands to flee their homeland. Mass immigration from Central America, in
other words, was not some inevitable economic development. It came from the defeat of socialism as an alternative path of development to overcome the legacies of colonialism and landlordism and reclaim the country's vast natural wealth. This

is the dream of national liberation that inspired and channeled the energy of millions; when this collective dream was defeated by the CIA, the people were forced to turn towards individual and family-based solutions in migration. Mexico: Neoliberalism and its side effects Literally in the backyard of the most powerful economic and military power in history, Mexico's experience with U.S. imperialism includes the direct military invasion and outright robbery of half of its national territory in the mid-1800s. It also includes the North American Free Trade Agreement, through which the Mexican bourgeoisie sought to overcome its own stagnation by offering its national market and
cheap labor force to U.S. multinational corporations. NAFTA produced huge displacement for the working class, peasants and oppressed in Mexico. The

trade agreement went into effect January 1994 and made it illegal for Mexico to give

preference to national products over U.S. ones and allowed the U.S. to sue the government of "unfair" market practices. It put small Mexican farmers in competition with U.S. agribusiness. It devastated small businesses. The poverty that NAFTA imposed on Mexico, at a time when the country was going through a population boom, led to the mass exodus of Mexican labor to the United States. Prior to 1994, it was estimated that around 2 million Mexican immigrants had crossed "illegaly" into the U.S. Almost 20 years later, that number is estimated to be anywhere between 10 to 12 million Mexican immigrants. The verdict on NAFTA is clear,
although the ruling classes of both countries continue to celebrate it. In 2009, it was reported that Mexico became the Latin American country with the highest growth of poverty and inequality in the distribution of wealth. An

extensive report by CONEVAL, a government institution in Mexico that studies the political and social development of the population, stated that between 2006 and 2008 extreme poverty characterized by lack of access to basic nutrition increased from 14.4 million to 19.5 million people. In 2008, 44.2 percent of the Mexican population was poor. This
amounted to over 47.2 million people who did not have access to nutritional and non-nutritional goods that are considered basic. Another 33 percent of the population meet the minimum requirement for basic standard of living but were considered at risk for poverty due to their lack of access to healthcare, education, housing and/or social services. The

conditions nurtured by NAFTA, combined with political turmoil within the Mexican bourgeoisie, have given rise to the violent narco-trafficking often seen on the news. This industry, supplying an enormous market north of the border, has further displaced millions. In a shocking new report, a consultant from the Association of Local Mexican Authorities of Civil Associations (Aalmac) announced that 150,000 deaths can be attributed to the seven years of the so-called "drug war." Along with this horrific figure, Jurez Franco stated that 27,523 people are missing, 800,000 women or children have been victims of sexual assault, 50,000 were left without parents and 4.5 million women are without their husbands. Adding insult to injury, U.S. arms manufacturers and dealers have made fortunes on the drug war across the border, as have major U.S. banks laundering billions of dollars in drug money for the cartels. Products of a criminal process While the debate over the pathway to citizenship carries on among ruling class circles in the coming period, it is the role of revolutionaries to explain the real roots of immigration and to expose the capitalists as the real criminals. Immigrants are the products of an economic system, global capitalism, that has
reduced opportunities in their home countries, while opening up considerable paths to migration through Western economic, military and cultural penetration of their homelands. While the bulk of this process is celebrated as globalizationthe free flow of capital and goods across bordersthe human beings that react to these trends are described as law-breakers. The PSL fights for a movement where the current victims of imperialism are empowered to fight back, and for a world where workers can freely cross borders, but in which no one must for the sake of survival. That means socialism, which in the United States would entail a vast effort to repair and repay those nations oppressed by imperialism, and would liberate the hoarded social wealth to provide a guaranteed living to all.

NAFTA is not free trade it is a tool used to further the empire

Wise and Cypher 2007Dr. Ral Delgado Wise is president of the International Network on Migration and Development; UNESCO
Chair on Migration, Development and Human Rights; and Professor of the Doctoral Programme in Development Studies at the Autonomous University of Zacatecas, Mexico. Dr. James M. Cypher received his Ph.D. degree in economics from the University of California, Riverside in 1973. His B.A. and M.A. degrees were awarded by University of California, Santa Barbara. His early research interests were focused on the macroeconomic impacts of US military spending, and he has published numerous articles in this area. Since the late 1980s he has concentrated on the Mexican Economy and issues of internationalization and economic development of poor nations. His book, State and Capital in Mexico (Westview, 1990) was published in Mexico by Siglo XXI publishers. He has taught or worked at several universities in Latin America, and is currently engaged in a large project to assess the pattern of industrialization in Chile. The senior member of the Departments faculty, Dr. Cypher has devoted his career to undergraduate teaching for over three decades. With James Dietz he co-authored a text, The Process of Economic Development (Routledge) the second edition of which will appear in 2003. *The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current Economic Integration. Annals of the American Academy of Political and Social Science , Vol. 610, NAFTA and Beyond: Alternative Perspectives in the Study of Global Trade and Development (Mar., 2007), pp. 120-142]//MM Third, we have demonstrated that the NAFTA

process was not in any fundamental sense a trade-based policy, leading to a benign and mutually beneficial exchange of economic specializations through economic competition on both sides of the border, as portrayed in textbook models. Rather than trade, let alone "free" or competition-based trade, the neoliberal program was constructed to serve the end of oligopoly powerthe control of marketsby displacing significant portions of the U.S. production system to Mexico. In short, NAFTA was not a
trade accord; it was an investment/production and restructuring agreement enabling U.S. firms to shift production to Mexico and benefit from cheap migrantmainly undocumentedlabor. U.S.

firms were allowed to expand their production without domestic content legislation, or export quotas or restrictions on the repatriation of profits, technology sharing

agreements, or any other constraints on the use of capital. For the United States, the potential dynamic impacts of the
labor export-led model are the following: lowering production costs in Mexico and/or the United States through the insertion of cheap labor into the production process which, on a transnational basis, will increase profits. Those gains can then 1. fund greater research and development spending, which, conceivably, leads to greater innovation levelswith these innovations potentially spreading across much of the U.S. industrial system; and 2. fund investment in the modernization of machinery and/or equipment and/or labor/managerial organizational restructuring programs and/or labor training programs. Additionally, if the lowering of production costs in Mexico and/or the United States is partially passed on to U.S. consumers via lower prices, then the labor export-led model serves to cheapen the reproduction costs of U.S. labor, enabling U.S. corporations and businesses to operate with lower wages than otherwise would be necessary. This too enhances the competitiveness of the U.S. production system, while raising profit margins. Fourth,

economic integration under NAFTA, rather than promoting convergence in the development levels of Mexico and the United States, has deepened the asymmetries that exist between the two countries: whereas in 1994, per capita GDP in the United States was 2.6 times that of Mexico, by 2004 the ratio had increased to 2.9. Similarly, average manufacturing wages in dollars per man-hour in the United States were 5.7 times higher than those reported in Mexico in 1994, and 6.8 higher in 2004 (Delgado Wise and Marquez 2006, 32). In Mexico, however, this new form of asymmetric integration has clearly not been associated with new possibilities for economic development. Stagnating or dropping wages, rising unemployment and informal activities have constituted the environment that has led to increasing emigration. The lack of linkage effects in the Mexican economy has negated the potential dynamic spillover effects that, according to the new growth theory, would spread across much of the production system due to enhance foreign investment under NAFTA. On one hand, this has meant that Mexico has
become increasingly dependent upon remittances to stabilize the macro-economy and society at largeto the point where remittances, net export earnings from oil (even during a boom in prices), and the net export earnings of the maquila sector have all converged, for the first time. On the other hand,

the uncontrolled leap in emigration has called into question the sustain ability of the cheap-labor export-led modelparticularly in terms of the depopulation effects in many parts of Mexico. With increasing marginalization and poverty, the pressures to emigrate escalate, and this could very well collide with U.S. policy
given the desire of the U.S. citizenry to heighten security in the post-9/11 period.

Link to Neolib
Neoliberal policy, especially NAFTA, is the root cause of all problems on the US-Mexico border
Fernndez-Kelly and Massey 2007Patricia Fernandez-Kelly holds a joint position in the department of sociology and Office of
Population Research at Princeton University. She has written extensively on globalization, industrial recomposition, international migration, and gender. Douglas S. Massey is the Henry G. Bryant Professor of Sociology and Public Affairs at Princeton University and president of the

* Borders for Whom? The Role of NAFTA in Mexico-U.S. Migration. Annals of the American Academy of Political and Social Science , Vol. 610, NAFTA and Beyond: Alternative Perspectives in the Study of Global Trade and Development (Mar., 2007), pp. 98118]//MM
American Academy of Political and Social Science. Conclusions In this article, we have developed a synoptic account of the historical events leading to the passage of NAFTA, a treaty ostensibly intended to reduce barriers to investment, open markets, and fuel economic development on both sides of the border. We have argued, however, that a

major objective behind NAFTA was not simply the liberalization of trade but the creation of suitable conditions for the realization of profits by U.S. financial institutions and manufacturers through carefully regulated investment in Mexico. In that sense, NAFTA is more about controlled than free trade. Our
historical account of the events leading to the implementation of NAFTA revealed critical alliances on both sides of the U.S.-Mexico border.

The financial crisis of the 1980s in Latin America, and consequently in the United States, brought about a new coalition that included U.S. banking interests and their representatives in Washington, Mexican public officials, and large business interests in both countries. In essence, the Latin American debt crisis of the 1980s acted as an agent for economic reconfiguration and the assumption of new state functions on both sides of the border. NAFTA's silence with respect to labor rights and worker mobility is comprehensible in the observation that, contrary to the basic precepts of the European Union and its project of political and economic integration, the overarching goal of the treaty was to advance the economic interests of a new binational class of investors, not the fortunes of citizens in general. In that respect, NAFTA may be seen as part of a class project (Harvey 2007 [this volume]). Although the treaty may
have had mixed effects on workers in Mexico and the United States, its effects in terms of profits and capital accumulation are clearnever

the period coinciding with NAFTA's implementation has witnessed significant growths in class inequality in the two countries. Unique in the
before have large firms experienced such an economic bonanza. At the same time, international landscape is the contradiction of attempting to liberalize trade while at the same time trying to force workers to remain fixed in space. The

refusal on the part of the architects of NAFTA to consider labor flows as part of the neoliberal project has given rise to several unintended consequences. First, the reduction of public spending in Mexico, the removal of subsidies to subsistence agriculture, the opening of feed and seed markets, and the commercialization of communal lands have had a displacing effect, leading peasants to seek economic opportunities in the neighboring country. Second, the continuation of migration flows have [sic] been met in the United States with growing attempts at curtailment. Since 1986, and especially in the 9/11 aftermath, U.S. immigration policy has become increasingly repressive and equally ineffective. Border blockades have led would-be immigrants to
more remote and hazardous points of entry, boosting the number of deaths but reduc ing the probability that they will be detained.

greater repression has not reduced the likelihood of undocumented migration. Third, tighter migration policies have also fomented the growth of a finely tuned machine of smugglers and false document manufacturers, all of whom are paid sizeable sums to aid immigrants. That vibrant economic sector increasingly includes drug traders and sex traffickers whose resources are now needed to oil the wheels of undocumented migration. Fourth, and perhaps most important, the harsher character of U.S. immigration policy is leading to the expansion of the undocumented Mexican population in the United States. Immigrants are
Paradoxically, behaving just as economists would predict by engaging in cost-benefit calculations that lead them to stay in areas of destination for longer periods of time to avoid the risks of exit and reentry. The presence of an expanded undocumented population on American soil does not bode

Without avenues for integration, in the face of public hostility, and with few opportunities to improve their educational and occupational standing, many of those immigrants may
well for individuals or families.

yet become part of a new Latino underclass. This dire forecast is not only counter to the image of a country defined by
democracy, fair play, and opportunity but is also in conflict with the stated objectives of a treaty that has demolished barriers for capital with unprecedented success. Time is running out, but perhaps it is still possible to reconcile facts with theory. Borders for whom? The

present situation indicates that borders stand mainly to contain the most vulnerable sectors of society while they become more and more permeable for those in positions of power.

Hegemony

NAFTA is already solving heg

NAFTA is key to heg and preventing protectionism hemispheric integration and liberal institutional support 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 worlds 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. Canadas 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 Americas 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 Mexicos 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 NAFTAs 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 mid-1990s, 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 Americas 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
Mexicos cheap labor force and Canadas natural resources. The strategic policies and actions will determine its NAFTA partners position against U.S. They will either lead to stronger strategic which will

alliances between these countries, even including other Latin American counties, enhance the U.S. dominance or lead to an opposition in Mexico and Canada, which could mean the loss of its superpower role. NAFTAs 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 would be sufficient for U.S.

Heg is key to global stability and accesses every major impact Prevents Great Power War Thayer, 6, Professor of Strategic Studies Associate Professor of Defense and Strategic Study @ Missouri State University, Former Research Fellow @ International Security Program @ Harvard Belfer Center of Science and International Affairs (Bradley, In Defense of Primacy, The National Interest, November/December)
A grand strategy based on American primacy means ensuring the United States stays the world's number one power-the diplomatic, economic and military leader. Those arguing against primacy claim that the United States should retrench, either because the United States lacks the power to maintain its primacy and should withdraw from its global commitments, or because the maintenance of primacy will lead the United States into the trap of "imperial overstretch." In the previous issue of The National Interest, Christopher Layne warned of these dangers of primacy and called for retrenchment.1 Those arguing for a grand strategy of retrenchment are a diverse lot. They include isolationists, who want no foreign military commitments; selective engagers, who want U.S. military commitments to centers of economic might; and offshore balancers, who want a modified form of selective engagement that would have the United States abandon its landpower presence abroad in favor of relying on airpower and seapower to defend its interests. But retrenchment, in any of its guises, must be avoided. If the United States adopted such a strategy, it would be a profound strategic mistake that would lead to far greater instability and war in the world, imperil American security and deny the United States and its allies the benefits of primacy. There are two critical issues in any discussion of America's grand strategy: Can America remain the dominant state? Should it strive to do this? America can remain dominant due to its prodigious military, economic and soft power capabilities. The totality of that equation of power answers the first issue. The United States has overwhelming military capabilities and wealth in comparison to other states or likely potential alliances. Barring some disaster or tremendous folly, that will remain the case for the foreseeable future. With few exceptions, even those who advocate retrenchment acknowledge this. So the debate revolves around the desirability of maintaining American primacy. Proponents of retrenchment focus a great deal on the costs of U.S. action but they fall to realize what is good about American primacy. The price and risks of primacy are reported in newspapers

American primacy takes as its starting point the protection of the U.S. homeland and American global interests. These interests include ensuring that critical resources like oil flow around the
every day; the benefits that stem from it are not. A GRAND strategy of ensuring

world, that the global trade and monetary regimes flourish and that Washington's worldwide network of allies is reassured and protected.
Allies are a great asset to the United States, in part because they shoulder some of its burdens. Thus, it is no surprise to see NATO in Afghanistan or the Australians in East Timor. In contrast, a strategy based on retrenchment will not be able to achieve these fundamental objectives of the United States. Indeed,

retrenchment will make the United States less secure than the present grand strategy of primacy. This is because threats will exist no matter what role America chooses to play in international politics. Washington cannot call a "time out", and it cannot hide from threats. Whether they are terrorists, rogue states or rising powers, history shows that threats must be confronted. Simply by declaring that the United States is "going home", thus abandoning its commitments or making unconvincing half-pledges to defend its interests and allies, does not mean that others will respect American wishes to retreat. To make such a declaration implies weakness and emboldens aggression. In the anarchic world of the animal kingdom, predators prefer to eat the weak rather than confront the strong. The same is true of the anarchic world of international politics. If there is no diplomatic
solution to the threats that confront the United States, then the conventional and strategic military power of the United States is what protects the country from such threats. And when enemies must be confronted, a strategy based on primacy focuses on engaging enemies overseas, away from .American soil. Indeed, a key tenet of the Bush Doctrine is to attack terrorists far from America's shores and not to wait while they use bases in other countries to plan and train for attacks against the United States itself. This requires a physical, on-the-ground presence that cannot be achieved by offshore balancing. Indeed, as Barry Posen has noted, U.S. primacy is secured because America, at present, commands the "global common"--the oceans, the world's airspace and outer space-allowing the United States to project its power far from its borders, while denying those common avenues to its enemies. As a consequence, the costs of power projection for the United States and its allies are reduced, and the robustness of the United States' conventional and strategic deterrent capabilities is increased.' This is not an advantage that should be relinquished lightly. A remarkable fact about international politics today--in

a world where American primacy is clearly and unambiguously on display--is that countries want to align themselves with the United States. Of course, this is not out of any sense of altruism, in most cases, but because doing so allows them to use the power of the United States for their own purposes, their own protection, or to gain greater influence. Of 192 countries, 84 are allied with America--their security is tied to the United
States through treaties and other informal arrangements-and they include almost all of the major economic and military powers. That is a ratio of almost 17 to one (85 to five), and a big change from the Cold War when the ratio was about 1.8 to one of states aligned with the United States versus the Soviet Union. Never before

U.S. primacy--and the bandwagoning effect-has also given us extensive influence in international politics, allowing the United States to shape the behavior of states and international institutions. Such influence comes in many forms, one of which is America's ability to create coalitions of like-minded states to free Kosovo, stabilize Afghanistan,
in its history has this country, or any country, had so many allies. invade Iraq or to stop proliferation through the Proliferation Security Initiative (PSI). Doing so allows the United States to operate with allies outside of the where it can be stymied by opponents. American-led wars in Kosovo, Afghanistan and Iraq stand in contrast to the UN's inability to save the people of Darfur or even to conduct any military campaign to realize the goals of its charter. The quiet effectiveness of the PSI in dismantling Libya's WMD programs and unraveling the A. Q. Khan proliferation network are in sharp relief to the typically toothless attempts by the UN to halt proliferation. You can count with one hand countries opposed to the United States. They are the "Gang of Five": China, Cuba, Iran, North Korea and Venezeula. Of course, countries like India, for example, do not agree with all policy choices made by the United States, such as toward Iran, but New Delhi is friendly to Washington. Only the "Gang of Five" may be expected to consistently resist the agenda and actions of the United States. China is clearly the most important of these states because it is a rising great power. But even Beijing is intimidated by the United States and refrains from openly challenging U.S. power. China proclaims that it will, if necessary, resort to other mechanisms of challenging the United States, including asymmetric strategies such as targeting communication and intelligence satellites upon which the United States depends. But China may not be confident those strategies would work, and so it is likely to refrain from testing the United States directly for the foreseeable future because China's power benefits, as we shall see, from the international order U.S. primacy creates. The other states are far weaker than China. For three of the "Gang of Five" cases--Venezuela, Iran, Cuba-it is an anti-U.S. regime that is the source of the problem; the country itself is not intrinsically anti-American. Indeed, a change of regime in Caracas, Tehran or Havana could very well reorient relations. THROUGHOUT HISTORY, peace and stability have been great benefits of an era where there was a dominant power--Rome, Britain or the United States today. Scholars and statesmen have long recognized the irenic effect of power on the anarchic world of Everything we think of when we consider the current international order - free trade, a robust monetary regime, increasing respect for human rights, growing democratization--is directly linked to U.S. power. international politics. Retrenchment proponents seem to think that the current system can be maintained without the current amount of U.S. power behind it. In that they are dead

Appalling things happen when international orders collapse. The Dark Ages followed Rome's collapse. Hitler succeeded the order established at Versailles. Without U.S. power, the liberal order created by the United States will end just as assuredly. As country and western great Rai Donner
wrong and need to be reminded of one of history's most significant lessons: sang: "You don't know what you've got (until you lose it)." Consequently, it is important to note what those good things are. In addition to ensuring the security of the United States and its allies, American primacy within the international system causes many positive outcomes for Washington and the world. The first has been a more peaceful world. During the Cold War, U.S. leadership reduced friction among many states that were historical antagonists, most notably France and West Germany. Today, American primacy helps keep a number of complicated relationships aligned--between

Greece and Turkey, Israel and Egypt, South Korea and Japan, India and Pakistan, Indonesia and Australia. This is
not to say it fulfills Woodrow Wilson's vision of ending all war. Wars still occur where Washington's interests are not seriously threatened, such as in Darfur, but a

Pax Americana does reduce war's likelihood, particularly war's worst form: great power wars. Second, American power gives the United States the ability to spread democracy and other elements of its ideology of liberalism. Doing so is a source of
much good for the countries concerned as well as the United States because, as John Owen noted on these pages in the Spring 2006 issue, liberal democracies are more likely to align with the United States and be sympathetic to the American worldview.3 So, spreading democracy helps maintain U.S. primacy. In addition,

once states are governed democratically, the likelihood of any type of conflict is significantly reduced. This is not because democracies do not have clashing interests. Indeed they do. Rather, it is because they are more open, more transparent and more likely to want to resolve things amicably in concurrence with U.S. leadership. And so, in general, democratic states are good

for their citizens as well as for advancing the interests of the United States. Critics have faulted the Bush Administration for attempting to spread democracy in the Middle East, labeling such an effort a modern form of tilting at windmills. It is the obligation of Bush's critics to explain why democracy is good enough for Western states but not for the rest, and, one gathers from the argument, should not even be attempted. Of course, whether democracy in the Middle East will have a peaceful or stabilizing influence on America's interests in the short run is open to question. Perhaps democratic Arab states would be more opposed to Israel, but nonetheless, their people would be better off. The United States has brought democracy to Afghanistan, where 8.5 million Afghans, 40 percent of them women, voted in a critical October 2004 election, even though remnant Taliban forces threatened them. The first free elections were held in Iraq in January 2005. It was the military power of the United States that put Iraq on the path to democracy. Washington fostered democratic governments in Europe, Latin America, Asia and the Caucasus. Now even the Middle East is increasingly democratic. They may not yet look like Western-style democracies, but democratic progress has been made in Algeria, Morocco, Lebanon, Iraq, Kuwait, the Palestinian Authority and Egypt. By all accounts, the march of democracy has been impressive. Third, along with the growth in the number of democratic states around the world has been the growth of the global economy. With its allies, the United States has labored to create an economically liberal worldwide network characterized by free trade and commerce, respect for international property rights, and mobility of capital and labor markets. The economic stability and prosperity that stems from this economic order is a global public good from which all states benefit, particularly the poorest states in the Third World. The United States created this network not out of altruism but for the benefit and the economic well-being of America. This economic order forces American industries to be competitive, maximizes efficiencies and growth, and benefits de fense as well because the size of the economy makes the defense burden manageable. Economic spin-offs foster the development of military technology, helping to ensure military prowess. Perhaps the greatest testament to the benefits of the economic network comes from Deepak Lal, a former Indian foreign service diplomat and researcher at the World Bank, who started his career confident in the socialist ideology of post-independence India. Abandoning the positions of his youth, Lal now recognizes that the only way to bring relief to desperately poor countries of the Third World is through the adoption of free

market economic policies and globalization,

which are facilitated through American primacy.4 As a witness to the failed alternative economic systems, Lal is one of the strongest academic proponents of American primacy due to the economic prosperity it provides.

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, marketoriented 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.

Drug Cartel turn on heg

Cooperation over NAFTA spills over to solve for drug trafficking cooperation
Toro 4 professor-researcher of international relations at El Colegio de Mexico (Colmex) and was the director of the Centro de Estudio Internacionales from 1997 to 2002 at Colmex, served as editor of the international relations quarterly Foro Internacional, author (Maria Celia, Mexican Policy Against Drugs: From Deterring to Embracing The United States, from chapter 8 of NAFTAs Impact on North America: The First Decade, edited by Sidney Weintraub, published 2004, CSIS)//ER NAFTA has been considered the triggering mechanism of the new U.S.-Mexican understanding in the realm of drugs. The trade agree- ment, according to this view, had a "spillover effect" that initiated a learning process whereby greater trust and shared commitments per- mitted the design and implementation of subsequent agreements .... The scope of agreements widened beyond trade matters to encompass other issue areas" (Dominguez and Fernandez de Castro 2001, 2, 3). NAFTA did, in fact, influence many decision on both sides of the border, as it became a paramount interest for the two countries. Avoid- ing conflict with the United States and establishing a reputation as a re- liable partner were certainly part of the Mexican realignment strategy. Salinas's decision to initiate a far-reaching rapprochement with the United States, of which NAFTA would become the centerpiece, provid- ed a favorable context to begin Mexican accommodation to U.S. preferences. lt also made the realignment politically more palatable in Mexico. NAFTA created many expectations in Mexico and the United States; among others, that formalizing agreements and finally coming to terms with the realities of two highly intertwined economies and societ- ies would launch both countries into a new era of international cooper- ation that best reflected the major changes in the international system and held the promise of protecting Mexico from U.S. unilateralism.

Increased Drug Trafficking leads to Narco-Terror Yager, 9 (Jordy, Border lawmakers fear drug-terrorism link, The Hill, 3/7/09, http://thehill.com/homenews/news/18629-borderlawmakers-fear-drug-terrorism-link) Members of Congress are raising the alarm that war-like

conditions on the Mexican border could lead to Mexican drug cartels helping terrorists attack the U.S. When you havegangs and they have loose ties with al Qaeda and then you have Iran not too far away from building a nuclear capability, nuclear terrorism may not be far off, said Rep. Trent Franks (R- Ariz.), a member of the House Armed Services committee. The Mexican drug cartels violence
accounted for more than 6,000 deaths last year, and in recent months it has begun spilling over into the districts of lawmakers from the southwest region, even as far north as Phoenix, Ariz. -- which has become, Franks noted, the kidnap capital of the U.S. Rep. Henry Cuellar (DTexas), whose district borders Mexico, said that while

the situation is bad, it could easily get worse. The goal of the cartels is to make money, said Cuellar, who sits on the House Homeland Security committee. If they can smuggle in drugs and human cargo, then certainly they can smuggle other things in, other devices to cause us harm. We
have not heard of any associations, but is there the possibility? Ill be the first to say, yeah. They have the routes, they can very easily smuggle in other things. If I was a bad guy in another country, I would go into Central America because the U.S. is not paying the proper attention.

Violence reached new levels last week when the mayor of Juarez, a Mexican city with 1.6 million people that serves as a major
transit point for drug smugglers, moved his family to El Paso, Texas, after receiving threats against his and their lives. The move corresponded with the resignation of the citys police chief after a drug cartel promised to kill a police officer every 48 hours if he did not step down. The citys police director of operations, a police officer and a prison guard were killed by the cartels in days prior. That was a mistake in my judgment, Franks said of the chiefs resignation. The federal government should have come in and said listen, were going to put a Marine division there to help you out if thats whats necessary, but narco-terrorists are not

going to tell America who to elect and who

resigns.

That results in WMD terrorist attacks Anderson, 8 (10/8/2008, Curt, AP, US officials fear terrorist links with drug lords,
http://usatoday30.usatoday.com/news/nation/2008-10-08-805146709_x.htm) MIAMI There is said Wednesday.

real danger that Islamic extremist groups such as al-Qaida and Hezbollah could form alliances with wealthy and powerful Latin American drug lords to launch new terrorist attacks, U.S. officials Extremist group operatives have already been identified in several Latin American countries, mostly involved in fundraising and finding logistical support. But Charles Allen, chief of intelligence analysis at the Homeland Security Department, said they could use well-established smuggling routes and drug profits to bring people or even weapons of mass destruction to the U.S. "The presence of these people in the region leaves open the possibility that they will attempt to attack the U nited S tates," said Allen, a veteran CIA analyst. "The threats in this hemisphere are real. We cannot ignore
them." Added U.S. Drug Enforcement Administration operations chief Michael Braun: "It is not in our interest to let that potpourri of scum to come together."

Extinction Corsi, 5 [Jerome. PhD in Poli Sci from Harvard, Expert in Politically-Motivated Violence. Atomic Iran, Pg 176-8//JVOSS]
The combination of horror and outrage that will surge upon the nation will demand that the president retaliate for the incomprehensible damage done by the attack. The problem will be that the president will not immediately know how to respond or against whom. The perpetrators will have been incinerated by the
explosion that destroyed New York City. Unlike 9-11, there will have been no interval during the attack when those hijacked could make phone calls to loved ones telling them before they died that the hijackers were radical Islamic extremists. There will be no such phone calls when the attack will not have been anticipated until the instant the terrorists detonate their improvised nuclear device inside the truck parked on a curb

Nor will there be any possibility of finding any clues, which either were vaporized instantly or are now lying physically inaccessible under tons of radioactive rubble. Still, the president, members of Congress, the military, and the public at large will suspect another attack by our known enemy Islamic terrorists. The first impulse will be to launch a nuclear strike on Mecca, to destroy the whole religion of Islam. Medina could possibly be added to the target list just to make the point with crystal clarity. Yet what would we gain? The moment Mecca and Medina were wiped off the map, the Islamic world more than 1 billion human beings in countless different nations would feel attacked. Nothing would emerge intact after a war between the United States and Islam. The apocalypse would be upon us. [CONTINUES} Or the president might decide simply to launch a limited nuclear strike on Tehran itself.
at the Empire State Building. This might be the most rational option in the attempt to retaliate but still communicate restraint. The problem is that a strike on Tehran would add more nuclear devastation to the world calculation. Muslims

around the world would still see the retaliation as an attack on Islam, especially when the United States had no positive proof that the destruction of New York City had been triggered by radical Islamic extremists with assistance from Iran. But for the president not to retaliate
might be unacceptable to the American people. So weakened by the loss of New York, Americans would feel vulnerable in every city in the nation. "Who is going to be next?" would be the question on everyone's mind. For this there would be no effective answer. That

the president might think politically at this instant seems almost petty, yet every president is by nature a politician. The political party in power at the time of the attack would be destroyed unless the president retaliated with a nuclear strike against somebody. The American people would feel a price had to be paid while the country was still capable of exacting revenge.

Kills Heg
Drug trade violence turns Mexico into a failed state and destabilizes the US Broder, 9 senior editor for defense and foreign policy at Roll Call. Before joining Congressional Quarterly in 2002, he worked as an editor
at National Public Radio in Washington and as a foreign correspondent for the Associated Press, NBC News and the Chicago Tribune, based in Jerusalem, Beirut and Beijing. graduate of the University of Virginia and studied international relations at Harvard University.

(Jonathan,

Mexico's Drug War: Violence Too Close to Home 3/9/09 http://library.cqpress.com.proxy.lib.umich.edu/cqweekly/weeklyreport111000003069323.) // czhang
With an approving nod from the United States, Mexican President Felipe Calderon has thrown his army into the fight against the cartels, but the well-armed gangs are fighting back. And according to some U.S. officials and experts, the Drug barons are winning. In Washington, where policy debates involving Mexico have been confined mostly to trade and immigration for the past two decades, sudden awareness of the Drug war has produced some alarming assessments. Retired Gen. Barry McCaffrey, who was the Drug czar in the Clinton White House, warned recently that unless

the Mexican government gains control of the Drug gangs, the United States could, within a decade, be confronting on its southern border a narco-state meaning an area controlled by Drug cartels. The Pentagon envisions an even worse scenario: Mexico and Pakistan, it says, are the countries most at risk of swiftly collapsing into failed states those whose central governments are so weak they have little practical control over most of their territory. Beset as he is at home by the credit crisis and
plunging economy, President Obamas response to the chaos in Mexico has so far been to continue some George W. Bush administration policies while beginning a search for others. He is expected to focus on possible regional approaches when he attends a Summit of the Americas in Trinidad and Tobago next month. Experts on the region, though, say the

magnitude of the Drug war in Mexico and its danger to the United States far exceed the reach of existing federal policies, perhaps even the policies the new administration is considering, such as stepped-up military aid and regional cooperation. Uncontrolled Drug violence in Mexico, these experts say, might result in tens of thousands of refugees surging across the border, adding to the estimated 12 million immigrants already in the country illegally. U.S. Drug officials say that a narcostate in Mexico could turn the ungoverned territory along the border into a permanent springboard for Mexican Drug traffickers smuggling their goods north into California, Arizona, New Mexico and Texas. And economic analysts say that should the Mexican government completely collapse, it would jeopardize oil exports from Mexico, from which the United States receives a third of its supply. Any descent by Mexico into chaos, the
Pentagons Joint Forces Command wrote in November, would demand an American response based on the serious implications for h omeland security alone.

Collapses hegemony the US will be too busy dealing with Mexico to project power in other places Haddick 8 - a contractor at U.S. Special Operations Command who wrote the This Week at War column for Foreign Policy - (Robert,
Now that would change everything December 2008, http://westhawk.blogspot.com/2008/12/now-that-would-change-everything.html)//WL There is one dynamic in the literature of weak and failing states that has received relatively little attention, namely the phenomenon of rapid collapse. For the most part, weak and failing states represent chronic, long-term problems that allow for management over sustained periods. The collapse of a state usually comes as a surprise, has a rapid onset, and poses acute problems. The collapse of Yugoslavia into a chaotic tangle of warring nationalities in 1990 suggests how suddenly and catastrophically state collapse can happen - in this case, a state which had hosted the 1984 Winter Olympics at Sarajevo, and which then quickly became the epicenter of the ensuing civil war. In terms of worst-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico. Some forms of collapse in Pakistan would carry with it the likelihood of a sustained violent and bloody civil and sectarian war, an even bigger haven for violent extremists, and the question of what would happen to its nuclear weapons. That perfect storm of uncertainty alone might require the engagement of U.S. and coalition forces into a situation of immense complexity and danger with no guarantee they could gain control of the weapons and with the real possibility that a nuclear weapon might be used. likely, but the government, its

The Mexican possibility may seem less politicians, police, and judicial infrastructure are all under sustained assault and pressure by criminal gangs and drug cartels. How that internal conflict turns out over the next several years will have a major impact on the stability of the Mexican state. Any descent by the Mexico into chaos would demand an American response based on the serious implications for homeland security alone. Yes, the rapid collapse of

Mexico would change everything with respect to the global security environment. Such a collapse would have enormous humanitarian, constitutional, economic, cultural, and security implications for the U.S. It would seem the U.S. federal government, indeed American society at large, would have little ability to focus serious attention on much else in the world. The hypothetical collapse of Pakistan is a scenario that has already been well discussed. In the worst case, the U.S. would be able to isolate itself from most effects emanating from south Asia. However, there would be no running from a Mexican collapse.

Unsustainable (Long)
Heg is unsustainable a) Counterbalancing and overstretch
Omestad 08 Former Associate Editor of Foreign Policy, Winner of the Edwin M. Hood Award for Diplomatic Journalism (Thomas, Is America Really on the Decline? US News and World Report, 10/29) This time, however, might not turn out as well for America, some analysts worry, because the trends eroding America's pre-eminence run deeper. "It's not simply that we've run into a rough patch, shaking our self-confidence," warns
Andrew Bacevich, an international affairs specialist at Boston University and author of this year's The Limits of Power: The End of American Exceptionalism. "It's different this time." That

there is some sort of big change is widely accepted, even mainstream. Defense Secretary Robert Gates now speaks of a "multipolar world." In its 2007 annual survey, the International
Institute for Strategic Studies referred to "the profound loss of authority suffered by the United States since its invasion of Iraq." Diminished dominance. Yet more troubling was the vista painted by Thomas Fingar, the U.S.

intelligence community's top analyst. "American dominance will be much diminished over this period of time" and "will erode at an accelerating pace with the partial exception of the military." In future competition, he added, the military will be "the least significant" factor. Fingar labeled U.S. preeminence since World War II a "truly anomalous situation." Indeed, shifts in economic and military power--played out slowly, over decades and centuries--are the norm, as Yale historian Paul Kennedy pointed out in his 1988 work, The Rise and Fall of the Great Powers. Some analysts conclude that if the reality of America's power position has changed, so must American attitudes. "We should disenthrall ourselves from the idea that the well-being and security of the United States can only be attained by seeking to maintain primacy," says Bacevich. In any case, the new financial shock is rattling a load-bearing pillar of American strength--its role as global financial superpower, including its privileged position as issuer of the world's favored reserve currency, the U.S. dollar. The dollar's special role has been critically important. It allows the federal government to affordably cover budget and current account deficits. The Feds are selling about half the new national debt to foreign investors, including governments like China's and sovereign wealth funds like those in Abu Dhabi and Kuwait. That has
Foreshadowing a conclusion of a coming report called "Global Trends 2025," he said in September that bridged the yawning U.S. fiscal gap, financing, in effect, global military activities and domestic spending without sparking inflation or driving up the interest cost of such monumental borrowing. It has also allowed Americans to maintain a notoriously low net savings rate. Critics point to the hazards inherent in racking up some $10 trillion in public debt--exacerbated now by fresh doubts over American solvency. Says historian Kennedy, "The

crisis will confirm in the minds of Asians not to be so fiscally dependent on Uncle Sam." Those foreign investors, suggests Chas. W. Freeman Jr., a former U.S. diplomat in China and Saudi Arabia and president of the Middle East Policy Council, will conclude, "We're not going to finance your improvidence indefinitely." One other vulnerability also
looms larger than in the past: energy imports. When Jimmy Carter was urging energy conservation in 1980, the United States imported 37 percent of oil consumed; last year, it was 58 percent. Something else is different about the current debate over U.S. decline. Without

any

contraction of its daunting military firepower or the size of its economy, other nations are bound to assume more influential positions. The world geopolitical map is being redrawn: Several powers are rising, some rapidly. China takes top billing on the list. Back when economic reforms began in 1978, China contributed but 1 percent of the world's GDP and its trade. Last year, it reached 5 percent of world GDP and 8 percent of trade. China's growth has hummed along at nearly 10 percent annually--for three decades. That is three times the global average.
China's "peaceful rise," as officials call the strategy, aims to restore China to the status it had enjoyed for many centuries: the world's largest economy. A recent Goldman Sachs report has bumped up the time by which China's economy is expected to surpass America's in size to 2027.

China's growth is fueling a rapid expansion of military capabilities and, in effect, promoting a model competing with that of the United States--authoritarian capitalism. At the same time, India, the world's most populous democratic state, has also found a surer path to prosperity that is broadening its influence and enabling a military buildup. Along with the economic recovery of Japan and the growth of what used to be called the "tigers" of South Korea and Southeast Asia, predictions of a "Pacific century" or an Asian one look more plausible. Asia is returning to its historical norms, Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, argues in his book The New Asian Hemisphere. "The era of Western domination has run its

course," he writes. There are shifts elsewhere, too. The once slumbering giant of South America, Brazil, is overcoming its past weaknesses. Russia is undergoing a resurgence of uncertain duration, courtesy of massive sales of oil and natural gas. Its invasion of neighboring Georgia and support for separatist regions there may mark a new period of strategic challenges to the West. Meanwhile, the European Union, in fits and starts, continues to evolve into a more coherent force in global affairs that, as a 27-nation collective, already presents the world's largest economy Biggest loser. The world's energy suppliers--especially those along the Persian Gulf--are also gaining strength.
Flynt Leverett, director of the New America Foundation's Geopolitics of Energy Initiative, calls the flood of money from oil consumers to producers "arguably the greatest transfer of wealth from one group of countries to another." The

"big loser," he says, is the United States. The Gulf Arab states, as a group, may emerge as the world's most important investor. As well, Iran and its regional ambitions will get plenty of sustenance. But the rise of other powers doesn't tell the whole geopolitical story. They are forging connections without U.S. involvement and, in some cases, with the likely aim of blunting U.S. influence. The maneuvering reflects the sort of games nations have virtually always played. When one country's
overweening power ignites concern, some of the others search for ways to counterbalance it. That can happen frontally, through political-

Russia, China, and the four Central Asian states have formed the Shanghai Cooperation Organization, a group with a decidedly nonU.S. approach to world affairs--no hectoring about human rights and democracy there. And though the United States, with its tight alliances, is East Asia's leading protecting power, it is not part of a new regional grouping that is becoming more influential. China is reaching deeply into Africa, the Middle East, and even Latin America with trade deals, energy investments, and aid with few strings attached. Russia, too, is using arms sales and energy commerce to revive old connections in the developing world. Its outreach, especially in Latin America, appeals to left-leaning governments aloof
military alliances or, more gingerly, in a nonconfrontational mode dubbed "soft balancing." For instance, from Washington. For the first time since the Cold War, a Russian naval fleet is heading into Latin American waters for exercises with Venezuela. Parag Khanna,

an analyst with the New America Foundation, sees the unipolar moment giving way to a different global game. In The Second World: Empires and Influence in the New Global Order, he predicts a "geopolitical
marketplace" in which developing countries are courted by and align flexibly with one of the new "Big Three": the United States, the European Union, and China. Others anticipate an even more complex diffusion of global power. Richard Haass,

president of the Council on Foreign Relations and a former Bush administration official, argues that the new era will devolve into "nonpolarity," in which nation-states lose influence and a fractious assortment of nonstate players wield more clout. These
include a variety of regional and global organizations, nongovernmental groups, foundations, multinational corporations, and even unsavory militias, drug cartels, and terrorist networks. The

erosion of U.S. global standing--at least in the eyes of the world--has been hastened by a foreign policy routinely portrayed overseas as one of arrogance and hubris. The charge of U.S.
unilateralism--stoked above all by a costly and unresolved war of choice in Iraq--has fortified a troubling caricature of America as a militaristic and hypocritical behemoth that frittered away the outpouring of global goodwill after 9/11. The

damage to America's reputation has weakened its "soft power"--the attractiveness abroad of its society and politics. Reports of prisoner abuse at Abu Ghraib and Guantnamo and what many see as encroachments on America's civil liberties in the name of fighting terrorism have taken a toll. It was, seemingly, with some glee that the German magazine Der Spiegel ran a cover story this fall titled "The Price of Arrogance" and depicting the Statue of Liberty with its flame extinguished. The world supply of deference to the lone superpower is flagging--a likely drag on the next presidency. The go-it-alone instincts of the Bush administration-though tempered in its second term--came into play on issues from climate change to international justice to arms control. Old allies felt a cool wind from Washington. Grand

ambitions for a democratic Middle East went unfulfilled. The Americans championed the war on terrorism with a "with us or against us" zeal. Fairly or not, friends and foes alike saw a lecturing, moralistic American style of leadership. It sat badly. "We exited the Cold War with amazing prestige and an automatic followership," says Freeman. "Nobody will charge a hill with us anymore." There have been other body blows to American prestige. The inability to bring closure to the wars in Afghanistan and Iraq (especially the lengthy bungling of the Iraq occupation), the initial feeble response to Hurricane Katrina, and the regulatory laxity and greed that underlie this year's financial crisis all served to cloud the picture of American pre-eminence. Chinese students are questioning whether
they should study American-style business. Mahbubani, the Singaporean analyst and former diplomat, marvels at "a new level of incompetence in America that is puzzling the world."

b) Challengers and economy Christopher Layne, Chair in National Security at the School of Government and Public Service at Texas A&M University, 09 *The Waning of U.S. HegemonyMyth or Reality?: A Review Essay, International
Security, Vol. 34, No. 1, Summer 2009]
For an overview of trends that could affect international politics over the next two decades, a good starting point is the National Intelligence Councils (NICs) Global Trends 2025: A Transformed World.15 Global Trends 2025 is not light reading, but it is significantly more insightful and intellectually courageous than typical government reports. Its

key geopolitical conclusion is that the U.S.-dominated unipolar world will give way to multipolarity during the next two decades spurred by two causal mechanisms: the emergence of new great powers (and potentially important regional powers); and economic, financial, and domestic political constraints that may erode U.S. capabilities. China, India, and possibly Russia are emerging great powers.16 As Global Trends 2025 points out, the rise of China and India to great power status will
restore each to the positions they held two centuries ago when China produced approximately 30 percent and India 15 percent of the worlds wealth (p. 7). Their

ascent is being propelled by the global shift in relative wealth and economic power from North America and the Euro-Atlantic world to Asiaa shift without precedent in modern history (ibid.). By 2025,
China figures to have the worlds second-largest economy (measured by gross domestic product [GDP]) and will be a first-rank military power (p. 30). India, buoyed by its strong economic growth rate, will strive for a multipolar system with New Delhi as one of the poles (ibid.). Although both states could encounter speed bumps that might slowor even derailtheir ascents to great power status, the NIC believes that the chances are good that China and India will continue to rise (p. 29).17] Because

of uncertainties about economics, energy prices, domestic governance issues, and especially demography, Russias great power trajectory is more problematic than Chinas or Indias (pp. 3132).18 Between 2009 and 2025, Russias population is forecast to drop
from 141 million to below 130 million, affecting the availability of manpower for both the military and the labor pools (pp. 2324, 30). If Russia overcomes its demographic challenge and continues its revival as a great power, however, the NIC believes it will be a leading force in opposition to U.S. global dominance (p. 32). Because its great power status is closely tied to its ability to control both t he energy resources and pipelines of Central Asia and the Caucasus, Russia

will also seek to reestablish its sphere of influence in the near abroad (pp. 32, 82). According to the NIC, in addition to relative decline, the United States will confront other constraints on its international role. U.S. military supremacy will no longer be as dominant as it has been since the Cold Wars end (p. 93). The United States soft power may diminish as its liberal model of political and economic development is challenged by authoritarian/statist alternatives (pp. 3, 89, 1314). At home, economic and political constraints may undermine U.S. hegemony. Global Trends 2025 was published just before the full scope of the global financial and economic crisis became apparent. Nevertheless, the NIC did have an inkling of the meltdowns potential long-term implications for U.S. power. In particular, Global Trends predicts that over the next two decades, the dollars role as the international economys preeminent reserve currency will erode. Although at the time this issue went to press, the dollar remained strong and will continue to be the reserve currency for some time to come, Chinas spring 2009 call to replace the dollar with a new reserve currency signals that the NICs long-term worries may be justified.19 [End Page 153] As the NIC
observes, the financial privileges conferred on the United States by the dollars unchallenged reserve currency status have underpinned the preeminent role of the United States in international politics since the end of World War II. Thus, the

dollars decline may force the United States into difficult tradeoffs between achieving ambitious foreign policy goals and the high domestic costs of supporting those objectives (pp. 12, 94, 97). Moreover, the growing dependence of the United States on foreign capital inflows may curtail U.S. freedom of action in unanticipated ways (p. 97). The NIC concludes that Americas interest and willingness to play a leadership role may be more constrained as the economic, military, and opportunity costs of being the worlds leader are reassessed by American voters (p. 93). Ultimately, although the United States will probably be primus inter pares in a multipolar international system twenty years from now, it will have less powerand foreign policy optionsthan it has been accustomed to having since 1945 (ibid.).

c) budget cuts Mandelbaum 11

Michael Mandelbaum, Foreign Affairs, America's Coming Retrenchment How Budget Cuts Will Limit the United States Global Role, August 9, 2011, http://www.foreignaffairs.com/articles/68024/michaelmandelbaum/americas-coming-retrenchment

The acrimonious negotiation that produced legislation to raise the American debt ceiling while cutting the federal budget deficit, which President Barack Obama signed on August 2, was an early skirmish in the battle to bring deficits under control. That battle is bound to be protracted, difficult, and contentious, and one of its casualties will be spending on foreign and security policy, which will decline in the years ahead. That will impose new limits on the projection of American power around the world. What a difference a year makes. Only last year, in the May/June issue of Foreign Affairs, I published a review (Overpowered?) of three books whose common theme was that the United States was doing far too much beyond its borders. For its own sake and the sake of other countries, the three

authors recommended, the country should pursue a more modest foreign policy. Now, as I forecast at the end of that essay, the fiscal condition of the United States will compel the fulfillment of that recommendation -- for better (the general sentiment of the books authors) or for worse (my own view). The August 2 legislation calls for $1 trillion in spending cuts over a ten-year period, about $350 billion of which is likely to come from the defense budget. The legislation also mandates a further $1.5 trillion reduction in expenditures in the next decade. If a special Congressional panel
cannot agree on the targets of those reductions, an automatic trigger will impose across-the-board budget savings that will lower the Defense Departments budget by an estimated $600 billion. Even

if the triggering mechanism is avoided, spending on defense and on other aspects of U.S. foreign policy will decline over the next decade. The scale of deficit reduction required
to put the country on solid fiscal footing is so large that it must involve both limits on Social Security and Medicare, despite the Democrats determination to preserve these programs intact, and increases in taxes in some form, despite the Republicans determination to prevent this.

When Americans are paying more to their government and getting less from it, they will not be as generous in supporting the United States global role as they have been in recent decades...

d) econ and alliances Rashman 11

Anisur Rahman, The Daily Star, Beginning of the end of American hegemony, September 13, 2011, http://www.thedailystar.net/newDesign/news-details.php?nid=202171 Ever since the end of World War II (WWII), the United States of America had enjoyed the status of a superpower of the world. No country overtly dared to challenge American hegemony. The other major victorious power of the WWII - the erstwhile USSR -- did lodge a muted challenge and the so called "Cold War" ensued. But American militarily surrounded the whole of the Soviet bloc and contained the spread of socialism. American industrial base and its economy were by far the strongest in the world and the USSR was no match at all. This state of affairs continued until an apocalyptic event of historic proportions took place in 2001. On the morning of September 11, 2001, an earth-shattering (excuse the pun) event took place in America. The twin towers of the World Trade Centre in Lower Manhattan, New York, the potent symbol of American capitalism, were ignominiously destroyed by the al-Qaeda by crashing American civilian aircrafts onto them. It shook the whole of America to the core; the invincibility of the world's only superpower had been shattered brutally. The country was at the receiving end of an attack on its own soil. Even President George W. Bush, the most powerful man in the world, had to be protected in American itself from the threat of a terrorist attack on that day. The ignominy of the superpower was beyond belief and America is still reeling from that event. The hunt for the terrorists who perpetrated such a heinous crime was immediate. The al-Qaeda was on American radar for quite sometime and when it was found that this organisation was indeed behind this audacious attack, the fury was boundless. America vowed to destroy al-Qaeda completely. Bush asked the world to join him in his crusade and said: "Either you are with us or against us." America launched an attack on Afghanistan -- the bastion of the Taliban supporting al-Qaeda. Almost simultaneously, America targeted Iraq on the pretext that it supported and harboured Islamic terrorism. Bush

stated in his State of the Union Address in January 2002 that Iraq,

Iran and North Korea were an "axis of evil." America claimed that Iraq possessed weapons of mass destruction (WMD) which must be destroyed, and that necessitated removal of Saddam Hussein. This hard-headed policy without any international consensus not only alienated America in the eyes of the world but also fractured Nato badly. France and
Germany were strongly opposed to the Iraq adventure. Disregarding the division in the Western power bloc and ignoring international efforts for rational approach in tackling terrorism, America almost unilaterally led the attack on Iraq and Afghanistan. Lack of evidence that these two countries were behind the 9/11 attack did not deter America in her pursuit for revenge. It was a sheer gung-ho response. The country adopted the doctrine of "pre-emptive" strike on suspected countries. If necessary, America would carry out military action unilaterally without international consent or even UN approval. This was a brutal proclamation of military might and it did not endear America at all to the rest of the world. War is never a low cost undertaking. It is estimated that the total cost of American "War on Terror" from 2001 to 2011, with inflation adjusted figure, amounts to over $2,000 billion, almost twice the amount for the whole of the Vietnam War. But could America financially afford to wage two wars simultaneously? Even before these two wars of choice, American economy was not in great shape. Productivity was dropping, and American share of the world economy was in decline. Russia was putting its house together after the collapse of its empire in 1989. Slowly

and imperceptibly China, India and Brazil were emerging as the world's economic powerhouses. The Organisation of Petroleum Exporting Countries (OPEC) was amassing a huge credit balance. All of these things were happening while America was blinded with rage and revenge and pursuing aggressive military adventures
against her presumed enemies. Ten years on, following 2001, America finds itself in dire economic straits. Booming Chinese exports, were voraciously absorbed by the Americans. China offered credits, from her export earnings, to Americans to buy Chinese goods. To Americans It was like pay-day throughout the month. China, India and the OPEC countries also bought limitless amount of American sovereign bonds, which

allowed America to pursue military adventures abroad without too much financial worry. But obviously things cannot go on like this forever and the consequence of such profligate behaviour will have to surface sometime. The annual budget deficit in America in 2011 is now nearly $1,600 billion ($1.6 trillion), the sovereign debt has ballooned to $14.3 trillion. In other words, every American man, woman and child bears a national debt of $55,000, which is one of the highest in the world, if not the highest. No wonder American credit rating agency,

Standard and

Poor's (S&P), recently downgraded American credit rating from AAA to AA+. This is the first time in American
history that the country has lost its triple A rating. Moreover, S&P has put America on the negative watch, which means that if the country fails to come to grips with its national debt, the AA+ rating may be further downgraded. How did it all come about? How could the world's only superpower with the largest economy and huge industrial base run up such a massive, almost mind boggling national deficit? The answer to this can be found in profligate national expenditure and unilateral American military undertakings abroad, arising from excessive ego of national power. During

the Cold War, America pursued a policy of collective defence -- Nato, Seato, Cento and so on to counter the might of the erstwhile USSR. The advantage of collective defence was that all participating countries shared the cost and pain of defence and war. But after the demise of socialism and disbanding of the USSR and consequent disappearance of Russian threat, America saw no further need for collective defence. When France and Germany opposed the attack on Iraq, America proclaimed that in the absence of
collective agreement within Nato, the "mission will determine the participating countries." At heart, it was the stance of the superpower to pursue a military undertaking on its own if necessary, particularly when the issue was nothing short of punishing the country or countries for the audacious attack on America and challenging its global might. Historically, socialism hegemony did not collapse from foreign aggression. It happened from within when the state could no longer prop it up financially, when it failed to support client states internationally and maintain the military might of the superpower. It is the economic collapse which led to political collapse. Is a similar thing happening to America -economic collapse leading to the demise of capitalism? Although

it is highly unlikely that capitalism will disappear overnight the American brand of capitalism, i.e. raw capitalism with no compassion for the poor, the unfortunate and down trodden members of the society, is going to be damaged. If 1989 is regarded as the historic time when socialism collapsed, then in the same vein one can say that 2001 may come to be seen as the beginning of the end of American hegemony.

Unsustainable (Short)
Counterbalancing and overstretch
Omestad 08 Former Associate Editor of Foreign Policy, Winner of the Edwin M. Hood Award for Diplomatic Journalism (Thomas, Is America Really on the Decline? US News and World Report, 10/29) This time, however, might not turn out as well for America, some analysts worry, because the trends eroding America's pre-eminence run deeper. "It's not simply that we've run into a rough patch, shaking our self-confidence," warns
Andrew Bacevich, an international affairs specialist at Boston University and author of this year's The Limits of Power: The End of American Exceptionalism. "It's different this time." That

there is some sort of big change is widely accepted, even mainstream. Defense Secretary Robert Gates now speaks of a "multipolar world." In its 2007 annual survey, the International
Institute for Strategic Studies referred to "the profound loss of authority suffered by the United States since its invasion of Iraq." Diminished dominance. Yet more troubling was the vista painted by Thomas Fingar, the U.S.

intelligence community's top analyst. Foreshadowing a conclusion of a coming report called "Global Trends 2025," he said in September that "American dominance will be much diminished over this period of time" and "will erode at an accelerating pace with the partial exception of the military." In future competition, he added, the military will be "the least significant" factor. Fingar labeled U.S. preeminence since World War II a "truly anomalous situation." Indeed, shifts in economic and military power--played out slowly, over decades and centuries--are the norm, as Yale historian Paul Kennedy pointed out in his 1988 work, The Rise and Fall of the Great Powers. Some analysts conclude that if the reality of America's power position has changed, so must American attitudes. "We should disenthrall ourselves from the idea that the well-being and security of the United States can only be attained by seeking to maintain primacy," says Bacevich. In any case, the new financial shock is rattling a load-bearing pillar of American strength--its role as global financial superpower, including its privileged position as issuer of the world's favored reserve currency, the U.S. dollar. The dollar's special role has been critically important. It allows the federal government to affordably cover budget and current account deficits. The Feds are selling about half the new national debt to foreign investors, including governments like China's and sovereign wealth funds like those in Abu Dhabi and Kuwait. That has
bridged the yawning U.S. fiscal gap, financing, in effect, global military activities and domestic spending without sparking inflation or driving up the interest cost of such monumental borrowing. It has also allowed Americans to maintain a notoriously low net savings rate. Critics point to the hazards inherent in racking up some $10 trillion in public debt--exacerbated now by fresh doubts over American solvency. Says historian Kennedy, "The

crisis will confirm in the minds of Asians not to be so fiscally dependent on Uncle Sam." Those foreign investors, suggests Chas. W. Freeman Jr., a former U.S. diplomat in China and Saudi Arabia and president of the Middle East Policy Council, will conclude, "We're not going to finance your improvidence indefinitely." One other vulnerability also
looms larger than in the past: energy imports. When Jimmy Carter was urging energy conservation in 1980, the United States imported 37 percent of oil consumed; last year, it was 58 percent. Something else is different about the current debate over U.S. decline. Without

any contraction of its daunting military firepower or the size of its economy, other nations are bound to assume more influential positions. The world geopolitical map is being redrawn: Several powers are rising, some rapidly. China takes top billing on the list. Back when economic reforms began in 1978, China contributed but 1 percent of the world's GDP and its trade. Last year, it reached 5 percent of world GDP and 8 percent of trade. China's growth has hummed along at nearly 10 percent annually--for three decades. That is three times the global average.
China's "peaceful rise," as officials call the strategy, aims to restore China to the status it had enjoyed for many centuries: the world's largest economy. A recent Goldman Sachs report has bumped up the time by which China's economy is expected to surpass America's in size to 2027.

China's growth is fueling a rapid expansion of military capabilities and, in effect, promoting a model competing with that of the United States--authoritarian capitalism. At the same time, India, the world's most populous democratic state, has also found a surer path to prosperity that is broadening its influence and enabling a military buildup. Along with the economic recovery of Japan and the growth of what used to be called the "tigers" of South Korea and Southeast Asia, predictions of a "Pacific century" or an Asian one look more plausible. Asia is returning to its historical norms, Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, argues in his book The New Asian Hemisphere. "The era of Western domination has run its course," he writes. There are shifts elsewhere, too. The once slumbering giant of South America, Brazil, is overcoming its past weaknesses. Russia is undergoing a resurgence of uncertain duration, courtesy of massive sales of oil and natural gas. Its

invasion of neighboring Georgia and support for separatist regions there may mark a new period of strategic challenges to the West. Meanwhile, the European Union, in fits and starts, continues to evolve into a more coherent force in global affairs that, as a 27-nation collective, already presents the world's largest economy Biggest loser. The world's energy suppliers--especially those along the Persian Gulf--are also gaining strength.
Flynt Leverett, director of the New America Foundation's Geopolitics of Energy Initiative, calls the flood of money from oil consumers to producers "arguably the greatest transfer of wealth from one group of countries to another." The

"big loser," he says, is the United States. The Gulf Arab states, as a group, may emerge as the world's most important investor. As well, Iran and its regional ambitions will get plenty of sustenance. But the rise of other powers doesn't tell the whole geopolitical story. They are forging connections without U.S. involvement and, in some cases, with the likely aim of blunting U.S. influence. The maneuvering reflects the sort of games nations have virtually always played. When one country's
overweening power ignites concern, some of the others search for ways to counterbalance it. That can happen frontally, through political-

Russia, China, and the four Central Asian states have formed the Shanghai Cooperation Organization, a group with a decidedly nonU.S. approach to world affairs--no hectoring about human rights and democracy there. And though the United States, with its tight alliances, is East Asia's leading protecting power, it is not part of a new regional grouping that is becoming more influential. China is reaching deeply into Africa, the Middle East, and even Latin America with trade deals, energy investments, and aid with few strings attached. Russia, too, is using arms sales and energy commerce to revive old connections in the developing world. Its outreach, especially in Latin America, appeals to left-leaning governments aloof
military alliances or, more gingerly, in a nonconfrontational mode dubbed "soft balancing." For instance, from Washington. For the first time since the Cold War, a Russian naval fleet is heading into Latin American waters for exercises with Venezuela. Parag Khanna,

an analyst with the New America Foundation, sees the unipolar moment giving way to a different global game. In The Second World: Empires and Influence in the New Global Order, he predicts a "geopolitical
marketplace" in which developing countries are courted by and align flexibly with one of the new "Big Three": the United States, the European Union, and China. Others anticipate an even more complex diffusion of global power. Richard Haass,

president of the Council on Foreign Relations and a former Bush administration official, argues that the new era will devolve into "nonpolarity," in which nation-states lose influence and a fractious assortment of nonstate players wield more clout. These
include a variety of regional and global organizations, nongovernmental groups, foundations, multinational corporations, and even unsavory militias, drug cartels, and terrorist networks. The

erosion of U.S. global standing--at least in the eyes of the world--has been hastened by a foreign policy routinely portrayed overseas as one of arrogance and hubris. The charge of U.S.
unilateralism--stoked above all by a costly and unresolved war of choice in Iraq--has fortified a troubling caricature of America as a militaristic and hypocritical behemoth that frittered away the outpouring of global goodwill after 9/11. The

damage to America's reputation has weakened its "soft power"--the attractiveness abroad of its society and politics. Reports of prisoner abuse at Abu Ghraib and Guantnamo and what many see as encroachments on America's civil liberties in the name of fighting terrorism have taken a toll. It was, seemingly, with some glee that the German magazine Der Spiegel ran a cover story this fall titled "The Price of Arrogance" and depicting the Statue of Liberty with its flame extinguished. The world supply of deference to the lone superpower is flagging--a likely drag on the next presidency. The go-it-alone instincts of the Bush administration-though tempered in its second term--came into play on issues from climate change to international justice to arms control. Old allies felt a cool wind from Washington. Grand

ambitions for a democratic Middle East went unfulfilled. The Americans championed the or not, friends and foes alike saw a lecturing, moralistic American style of leadership. It sat badly. "We exited the Cold War with amazing prestige and an automatic followership," says Freeman. "Nobody will charge a hill with us anymore." There have been other body blows to American prestige. The inability to bring closure to the wars in Afghanistan and Iraq (especially the lengthy bungling of the Iraq occupation), the initial feeble response to Hurricane Katrina, and the regulatory laxity and greed that underlie this year's financial crisis all served to cloud the picture of American pre-eminence. Chinese students are questioning whether
war on terrorism with a "with us or against us" zeal. Fairly they should study American-style business. Mahbubani, the Singaporean analyst and former diplomat, marvels at "a new level of incompetence in America that is puzzling the world."

No Impact (Long)
a. Empirics Fettweis 10 Christopher J. Fettweis (Professor of national security affairs @ U.S. Naval War College)
2010 Threat and Anxiety in US Foreign Policy, Survival, Volume 52, Issue 2 April 2010 , pages 59 82 One potential explanation for the growth of global peace can be dismissed fairly quickly: US actions do not seem to have contributed much. The limited evidence suggests that there is little reason to believe in the stabilising power of the US hegemon, and that there is no relation between the relative level of American activism and international stability. During the 1990s, the United States cut back on its defence spending fairly substantially. By 1998, the United States was spending $100 billion less on defence in real terms than it had
in 1990, a 25% reduction.29 To internationalists, defence hawks and other believers in hegemonic stability, this irresponsible 'peace dividend' endangered both national and global security.

'No serious analyst of American military capabilities', argued neoconservatives William Kristol and Robert Kagan in 1996, 'doubts that the defense budget has been cut much too far to meet America's responsibilities to itself and to world peace'.30 And yet the verdict from the 1990s is fairly plain: the world grew more peaceful while the United States cut its forces. No state seemed to believe that its security was endangered by a less-capable US military, or at least none took any action that would suggest such a belief. No militaries were enhanced to address power vacuums; no security dilemmas drove insecurity or arms races; no regional balancing occurred once the stabilis-ing presence of the US military was diminished. The rest of the world acted as if the threat of international war was not a pressing concern, despite the reduction in US military capabilities. Most of all, the United States was no less safe. The incidence
and magnitude of global conflict declined while the United States cut its military spending under President Bill Clinton, and kept declining as the George W. Bush administration ramped the spending back up. Complex statistical analysis is unnecessary to reach the conclusion that world peace and US military expenditure are unrelated.

b. There are no threats Fettweis, 11 (Christopher J. Fettweis, Department of Political Science, Tulane University, 9/26/11, Free
Riding or Restraint? Examining European Grand Strategy, Comparative Strategy, 30:316332, EBSCO, CMR) Assertions that without the combination of U.S. capabilities, presence and commitments instability would return to Europe and the Pacific Rim are usually rendered in rather vague language. If the United States were to
decrease its commitments abroad, argued Robert Art, the

world will become a more dangerous place and, sooner or later, that will redound to Americas detriment.53 From where would this danger arise? Who precisely would do the fighting, and over what issues? Without the United States, would Europe really descend into Hobbesian anarchy? Would the
Japanese attack mainland China again, to see if they could fare better this time around? Would the Germans and French have another go at it? In other words, where exactly is hegemony is keeping the peace? With one exception, these questions are rarely addressed. That exception is in the Pacific Rim. Some analysts fear that a de facto surrender of U.S. hegemony would lead to a rise of Chinese influence. Bradley Thayer worries that Chinese would become the language of diplomacy, trade and commerce, transportation and navigation, the internet, world sport, and global culture, and that Beijing would come to dominate science and technology, in all its forms to the extent that soon the world would witness a Chinese astronaut who not only travels to the Moon, but plants the communist flag on Mars, and perhaps other planets in the future.54 Indeed China is the only other major power that has increased its military spending since the end of the Cold War, even if it still is only about 2 percent of its GDP. Such levels of effort do not suggest a desire to compete with, much less supplant, the United States. The

much-ballyhooed, decade-long military buildup has brought Chinese spending up to somewhere between one-tenth and one-fifth of the U.S. level. It is hardly clear that a restrained United States would invite Chinese regional, must less global, political expansion . Fortunately one need not
ponder for too long the horrible specter of a red flag on Venus, since on the planet Earth, where war is no longer the dominant form of conflict resolution, the threats posed by even a rising China would not be terribly dire. The dangers contained in the terrestrial security environment are less severe than ever before. Believers in the pacifying power of hegemony ought to keep in mind a rather basic tenet: When it comes to policymaking, specific

threats are more significant than vague, unnamed dangers.

Without specific risks, it is just as plausible to interpret U.S. presence as redundant, as

overseeing a peace that has already arrived. Strategy should not be based upon vague images emerging from the dark reaches of the neoconservative imagination . Overestimating Our Importance One of the most basic insights of cognitive psychology provides the final reason to doubt the power of hegemonic stability: Rarely are our actions as consequential upon their behavior as we perceive them to be. A great deal of
experimental evidence exists to support the notion that people (and therefore states) tend to overrate the

degree to which their behavior is responsible for the actions of others. Robert Jervis has argued that two processes account for this
overestimation, both of which would seem to be especially relevant in the U.S. case.55 First, believing that we are responsible for their actions gratifies our national ego (which is not small to begin with; the United States is exceptional in its exceptionalism). The hubris of the United States, long appreciated and noted, has only grown with the collapse of the Soviet Union.56 U.S. policymakers famously have comparatively little knowledge ofor interest inevents that occur outside of their own borders. If

there is any state vulnerable to the overestimation of its importance due to the fundamental misunderstanding of the motivation of others, it would have to be the United States. Second, policymakers in the United States are far more familiar with our actions than they are with the decision-making processes of our allies. Try as we might, it is not possible to fully understand
the threats, challenges, and opportunities that our allies see from their perspective. The European great powers have domestic politics as complex as ours, and they also have competent, capable strategists to chart their way forward. They react to many international forces, of which U.S. behavior is only one. Therefore, for any actor trying to make sense of the action of others, Jervis notes, in the absence of strong evidence to the contrary, the

most obvious and parsimonious explanation is that he was responsible.57 It is natural, therefore, for U.S. policymakers and strategists to believe that the behavior of our allies (and rivals) is shaped largely by what Washington does. Presumably Americans are at least as susceptible to the overestimation of their ability as any other people, and perhaps more so. At the very least, political psychologists tell us, we are probably not as important to them as we think. The importance of U.S. hegemony in contributing to international stability is therefore almost certainly overrated. In the end, one can never be sure why our major allies have not gone to, and do not even plan for, war. Like deterrence, the hegemonic stability theory rests on faith; it can only be
falsified, never proven. It does not seem likely, however, that hegemony could fully account for twenty years of strategic decisions
made in allied capitals if the international system were not already a remarkably peaceful place. Perhaps these states have no intention of fighting one another to begin with, and our commitments are redundant. European great powers may well have chosen strategic restraint because they feel that their security is all but assured, with or without the United States.

c. Instability now Maher 10PhD candidate in Political Science @ Brown (Richard, Ph.D. candidate in the Political
Science department at Brown University, The Paradox of American Unipolarity: Why the United States Will Be Better Off in a Post-Unipolar World, 11/12/2010 Orbis, ScienceDirect) And yet, despite this material preeminence, the United States sees its political and strategic influence diminishing around the world. It is involved in two costly and destructive wars , in Iraq and Afghanistan, where success has been elusive and the end remains out of sight. China has adopted a new assertiveness recently, on everything from U.S. arms sales to Taiwan, currency convertibility, and America's growing debt (which China largely finances). Pakistan, one of America's closest strategic allies, is facing the threat of social and political collapse. Russia is using its vast energy resources to reassert its dominance in what it views as its historical sphere of influence. Negotiations with North Korea and Iran have gone nowhere in dismantling their nuclear programs. Brazil's growing economic and political influence offer another option for partnership and investment for countries in the Western Hemisphere. And relations with Japan, following the election that brought the opposition Democratic Party into power, are at their frostiest in decades. To many observers, it seems that America's vast power is not translating into America's preferred outcomes . As the United States has come to learn, raw power does not automatically translate into the realization of one's preferences, nor is it necessarily easy to maintain one's predominant position in world politics . There are many costs that come with predominance material, political, and reputational. Vast imbalances of power create apprehension and anxiety in others, in one's friends just as much as in one's rivals. In this view, it is not necessarily American predominance that produces unease but rather American predominance. Predominance also makes one a tempting target, and a scapegoat for other countries own problems and unrealized ambitions. Many a Third World autocrat has blamed his country's economic and
social woes on an ostensible U.S. conspiracy to keep the country fractured, underdeveloped, and subservient to America's own interests.

Predominant power likewise breeds envy, resentment, and alienation. How is it possible for one country to be so rich
and powerful when so many others are weak, divided, and poor? Legitimacythe perception that one's role and purpose is acceptable and one's power is used justlyis indispensable for maintaining power and influence in world politics . As we witness the emergence (or re-

of great powers in other parts of the world, we realize that American predominance cannot last forever. It is inevitable that the distribution of power and influence will become more balanced in the future, and that the United States will necessarily see its relative power decline. While the United States naturally
emergence) should avoid hastening the end of this current period of American predominance, it should not look upon the next period of global politics and international history with dread or foreboding. It certainly should not seek to maintain its predominance at any cost, devoting unlimited ambition, resources, and prestige to the cause. In fact, contrary to what many have argued about the importance of maintaining its predominance, America's position in the worldboth at home and internationallycould very well be strengthened once its era of

preeminence is over. It is, therefore, necessary for the United States to start thinking about how best to position itself in the post-unipolar world.

No Impact (Short)
Heg doesnt solve war and declines dont cause conflict Fettweis 10
Christopher J. Fettweis (Professor of national security affairs @ U.S. Naval War College) 2010 Threat and Anxiety in US Foreign Policy, Survival, Volume 52, Issue 2 April 2010 , pages 59 82 One potential explanation for the growth of global peace can be dismissed fairly quickly: US actions do not seem to have contributed much. The limited evidence suggests that there is little reason to believe in the stabilising power of the US hegemon, and that there is no relation between the relative level of American activism and international stability. During the 1990s, the United States cut back on its defence spending fairly substantially. By 1998, the United States was spending $100 billion less on defence in real terms than it had
in 1990, a 25% reduction.29 To internationalists, defence hawks and other believers in hegemonic stability, this irresponsible 'peace dividend' endangered both national and global security. conservatives William Kristol

'No serious analyst of American military capabilities', argued neoand Robert Kagan in 1996, 'doubts that the defense budget has been cut much too far to meet America's responsibilities to itself and to world peace'.30 And yet the verdict from the 1990s is fairly plain: the world grew more peaceful while the United States cut its forces. No state seemed to believe that its security was endangered by a less-capable US military, or at least none took any action that would suggest such a belief. No militaries were enhanced to address power vacuums; no security dilemmas drove insecurity or arms races; no regional balancing occurred once the stabilis-ing presence of the US military was diminished. The rest of the world acted as if the threat of international war was not a pressing concern, despite the reduction in US military capabilities. Most of all, the United States was no less safe. The incidence
and magnitude of global conflict declined while the United States cut its military spending under President Bill Clinton, and kept declining as the George W. Bush administration ramped the spending back up. Complex statistical analysis is unnecessary to reach the conclusion that world peace and US military expenditure are unrelated.

Even if the US declines, liberal international norms will survive - solves the impact Ikenberry 11 (May/June issue of Foreign Affairs, G. John, PhD, Albert G. Milbank Professor of Politics and International Affairs at
Princeton University in the Department of Politics and the Woodrow Wilson School of Public and International Affairs, The Fu ture of the Liberal World Order, http://www.foreignaffairs.com/ articles/67730/g-john-ikenberry/the-future-of-the-liberal-world-order?page=show) For all these reasons, many

observers have concluded that world politics is experiencing not just a changing of the guard but also a transition in the ideas and principles that underlie the global order. The journalist Gideon
Rachman, for example, says that a cluster of liberal internationalist ideas -- such as faith in democratization, confidence in free markets, and the acceptability of U.S. military power -- are all being called into question. According

to this worldview, the future of

international order will be shaped above all by China, which will use its growing power and wealth to push world politics in
an illiberal direction. Pointing out that China and other non-Western states have weathered the recent financial crisis better than their Western counterparts, pessimists argue

that an authoritarian capitalist alternative to Western neoliberal ideas has

already emerged. According to the scholar Stefan Halper, emerging-market states "are learning to combine market economics with
traditional autocratic or semiautocratic politics in a process that signals an intellectual rejection of the Western economic model." Today's international order is not really American or Western--even if it initially appeared that way. But

this panicked narrative misses a deeper reality: although the United States' position in the global system is changing, the liberal international order is alive and well. The struggle over international order today is not about fundamental principles. China and other emerging great powers do not want to contest the basic rules and principles of the liberal international order; they wish to gain more authority and leadership within it. Indeed, today's power transition represents not the defeat of the liberal order but its ultimate ascendance. Brazil, China, and India have all become more prosperous and capable by operating inside the existing international order - benefiting from its rules, practices, and institutions, including the World Trade Organization (WTO) and the newly organized G-20. Their economic success and growing influence are tied to the liberal internationalist organization of world politics, and they have deep interests in preserving that system. In the meantime, alternatives to an open

and rule-based order have yet to crystallize. Even though the last decade has brought remarkable upheavals in the global system -- the emergence of new powers, bitter disputes among Western allies over the United States' unipolar ambitions, and a global financial crisis and recession -- the liberal international order has no competitors. On the contrary, the rise of non-Western powers and the growth of economic and security interdependence are creating new constituencies for it. To be sure, as wealth and power become less concentrated in the United States' hands, the country will be less able to shape world politics. But the underlying foundations of the liberal international order will survive and thrive. Indeed, now may be the best time for the United States and its democratic partners to update the liberal order for a
new era, ensuring that it continues to provide the benefits of security and prosperity that it has provided since the middle of the twentieth century.

Ext. International Norms Solve

Transition will be peaceful

Ikenberry 08 professor of Politics and International Affairs at Princeton University (John, The Rise of
China and the Future of the West Can the Liberal System Survive?, Foreign Affairs, Jan/Feb) Some observers believe that the American era is coming to an end, as the Western-oriented world order is replaced by
one increasingly dominated by the East. The historian Niall Ferguson has written that the bloody twentieth century witnessed "the descent of the West" and "a reorientation of the world" toward the East. Realists go on to note that as China gets more powerful and the United States' position erodes, two things are likely to happen: China will try to use its growing influence to reshape the rules and institutions of the international system to better serve its interests, and other states in the system -- especially the declining hegemon -- will start to see China as a growing security threat. The

result of these developments, they predict, will be tension, distrust, and conflict, the typical features of a power transition. In this view, the drama of China's rise will feature an increasingly powerful China and a declining United States locked in an epic battle over the rules and leadership of the international system. And as the world's largest country emerges not from within but outside the established post-World War II international order, it is a drama that will end with the grand ascendance of China and the onset of an Asian-centered world order. That course, however, is not inevitable. The rise of China does not have to trigger a wrenching hegemonic transition. The U.S.-Chinese power transition can be very different from those of the past because China faces an international order that is fundamentally different from those that past rising states confronted. China does not just face the United States; it faces a Western-centered system that is open, integrated, and rule-based, with wide and deep political foundations. The nuclear revolution, meanwhile, has made war among great powers unlikely -- eliminating the major tool that rising powers have used to overturn international systems defended by declining hegemonic states. Today's Western order, in short, is hard to overturn and easy to join. This unusually durable and expansive order is itself the product of farsighted U.S. leadership. After World War II, the United States did not simply establish itself as the leading world power. It led in the creation of universal institutions that not only invited global membership but also brought democracies and market societies closer together. It built an order that facilitated the participation and integration of both established great powers and newly independent states. (It is often
forgotten that this postwar order was designed in large part to reintegrate the defeated Axis states and the beleaguered Allied states into a unified international system.) Today, China can gain full access to and thrive within this system. And if it does, China will rise, but the Western order -if managed properly -- will live on.

Agriculture
ALT CAUSE: No solvency for monoculturessubsidies.
PERSON 2005
(Stacey, J.D. Candidate, Georgetown University Law Center, Georgetown International Environmental Law Review, Winter)

Subsidy programs have also generally encouraged monoculture, or raising the same crop year after year on the same plot of land, because benefits are tied to crop yields on a specified acreage planting base. 36 Large scale monoculture contributes to soil erosion and consumes water and energy in large amounts. Monoculture also depletes nutrients in the soil because the same crop drains a particular nutrient from the soil year after year without any opportunity for replenishment. Nutrient depletion forces farmers to intensify their use of fertilizers in order to get maximum yields of single commodity program crops. 37 In addition to increased use of fertilizers, farmers must also increase their use of pesticides because erosion and nutrient depletion of the soil increase the vulnerability of plants to diseases and pests. 38 These pesticides and fertilizers are the leading causes of contaminated surface waters. Another consequence of the current farm program structure is that it favors certain crops. Rather than developing naturally, agricultural markets develop solely in specialized sectors for subsidized crops because those sectors are where farmers reap the most economic gain. 39 Farmers must also invest more and more in subsidized sectors due to those crops being less risky. 40 This specialization and non-natural development of agricultural markets causes environmental harm by contributing to monoculture and making it financially uncertain for farmers to diversify because markets for alternative crops are poorly defined. 41 Generally, the types of crops the farm program encourages are row crops rather than fields of grasses, which could be used to feed livestock, in addition to corn, soybeans, and wheat. 42 Grasslands create a better habitat for wildlife, prevent soil erosion, and require fewer agricultural chemicals; but some economists estimate that thirty million acres of grassland have been shifted to cropland as a result of farm program policy benefits accruing only to specified commodities. 43 There are also large federal subsidy programs dedicated to supporting and developing farm irrigation infrastructure and supply. 44 These subsidies encourage [*313] increased demand for overuse of groundwater sources, leading to such environmental catastrophes, such as desertification, destruction of natural springs with their wildlife habitats, and saltwater intrusion. 45

No impact
WOOD 2002
(Dr. Dave, ecologist from UK who has lived in India for the past few years, One Hand Clapping: Organic Farming in India, December 12 , http://www.cgfi.org/materials/articles/2002/dec_12_02_wood.htm) The reality of monocultures is the exact opposite: all

our important Old World cereals have immediate wild relatives growing in vast monodominant natural grasslands throughout Asia and Africa. These natural monocultures were a key source of gathered food before farming; seem to have been maintained and toughened by seasonal fire or flood disturbance (reducing functionally-surplus biodiversity); are the ecological antithesis of 'primeval forest'; and provide exact monoculture models to early farmers for tree-free cereal fields. Thus there is sound applied ecology underpinning our cereal monocultures. The historical and robust ecological benefits of cereal monocultures directly derived from 'primeval grassland' continue to this day,
providing most of our food [see the peer-reviewed Wood, D. and Lenn, J. 2001 Nature's Fields: a neglected model for increasing food production. Outlook on Agriculture 30, 165-174].

Seed banks solve the impact of monoculture

NATIONAL BIOLOGICAL INFORMATION INFRASTRUCTURE 2007 (Ex situ Conservation of Agricultural Genetic
Resources, Last Modified 10-15, http://www.nbii.gov/portal/server.pt?open=512&objID=406&&PageID=590&mode=2&in_hi_userid=2&cached=true)

Genetic diversity is preserved through a variety of in situ (in position or in-field) agricultural practices described above. In addition, there are a number of organizations that enlist teams of local farmers to grow native varieties, particularly those that are threatened by extinction due to lack of modern-day use. There are

also local, national and international efforts to preserve agricultural genetic resources through ex situ (offsite) methods such as seed and sperm banks. Some of the major germplasm storage efforts include: * The Consultative Group on
International Agricultural Research (CGIAR) is a consortium of International Agriculture Research Centers (IARC) and others that each conduct research on and preserve germplasm from a particular crop or animal species. The CGIAR and the IARCs are funded by donor countries (including a significant contribution from the United States), private foundations, and international and regional organizations. The

CGIAR holds one of the world's largest ex situ collections of plant genetic resources in trust for the world community. It contains over 500,000 accessions of more than 3,000 crop, forage, and agroforestry species. The collection includes farmers'
varieties and improved varieties and, in substantial measure, the wild species from which those varieties were created - CGIAR website, 2003 *

National germplasm storage centers including the U.S. Department of Agriculture's National Center for Genetic Resources Preservation, India's National Bureau of Animal Genetic Resources (NBAGR), the Taiwan Livestock Research Institute, and the Australian Network of Plant Genetic Resource Centres. * Organizations such as the World Resources Institute (WRI) and the World Conservation Union (IUCN) are non-profit organizations that provide funding and other support to ex situ and in situ conservation efforts.

NAFTA GOOD
NAFTA is key to agriculture
Research and Markets 12 (The worlds largest business researcher, Business Wire February 1, 2012, LEXIS //NS) Agricultural Products - North America (NAFTA) Industry Guide is an essential resource for top-level data and analysis covering the Agricultural Products industry in each of the North American Free Trade Agreement (United States, Canada, and Mexico) countries. The report includes easily comparable data on market value, volume, segmentation and market share,
plus full five year market forecasts. It examines future problems, innovations and potential growth areas within the market. Scope of the Report Contains an executive summary and data on value, volume and segmentation Provides textual analysis of the industry's prospects, competitive landscape and profiles of the leading companies Incorporates in-depth five forces competitive environment analysis and scorecards Compares data from the US, Canada and Mexico, alongside individual chapters on each country. . Includes a five-year forecast of the industry Highlights

The agricultural products industry within the NAFTA countries had a total market value of $185,345.1 million in 2010. Mexico was the fastest growing country, with a CAGR of 9.1% over the 2006-10 period. The US is the leading country among the NAFTA bloc, with market revenues of $143,500 million in 2010. The US is expected to lead the Agricultural Products industry in the NAFTA bloc, with a value of $168,400 million in 2015

Increased food prices will cause mass starvation killing 95% of the world Adams 8 staff writer for naturalnews.com (April 23, The Biofuels Scam, Food Shortages and the Coming Collapse of the Human
Population, http://www.naturalnews.com/023091.html ) So, to repeat, the food bubble is now starting to implode. What does it all mean? It means that as these economic and climate realities unfold, our world is facing massive starvation and food shortages. The first place this will be felt is in poor developing nations. It

is there that people live on the edge of economic livelihood, where even a 20% rise in the price of basic food staples can put desperately-needed calories out of reach of tens of millions of families. If something is not done to rescue these people from their plight, they will starve to death. Wealthy nations like America, Canada, the U.K., and others will be able to absorb the price increases, so you won't see mass starvation in North America any time soon (unless, of course, all the honeybees die, in which case prepare to start chewing your shoelaces...), but it will lead to
significant increases in the cost of living, annoying consumers and reducing the amount of money available for other purchases (like vacations, cars, fuel, etc.). That, of course, will put downward pressure on the national economy. But what we're seeing right now, folks, is just a small foreshadowing of events to come in the next couple of decades. Think about it: If these minor climate changes and foolish biofuels

policies are already unleashing alarming rises in food prices, just imagine what we'll see when Peak Oil kicks in and global oil
supplies really start to dwindle. When gasoline is $10 a gallon in the U.S., how expensive will food be around the world? The answer, of course, is that it will be triple or quadruple the current price. And that means many more people will starve. Fossil fuels, of course, aren't the only limiting factor threatening future food supplies on our planet: There's also fossil water. That's water from underground aquifers that's being pumped up to the surface to water crops, then it's lost to evaporation. Countries like India and China are depending heavily on fossil water to irrigate their crops, and not surprisingly, the water levels in those aquifers is dropping steadily. In a few more years (as little as five years in some cases), that water will simply run dry, and the crops that were once irrigated to feed a nation will dry up and turn to dust. Mass

starvation will only take a few months to kick in. Think North Korea after a season of floods. Perhaps 95% of humanity is just one crop season away from mass starvation.

NAFTA increased US agricultural subsidies

Baumann 1/11 (Susana G. Baumann, BA in accounting from Colegio Americano and Business Contributor for VOXXI, Mexican Farmers Affected By Agricultural Subsidies From NAFTA, Other International Agreements, http://www.huffingtonpost.com/2013/01/11/mexican-farmers-agriculturalsubsidies_n_2457845.html, AL) Impact of NAFTA in combination with US agricultural subsidies Click here for "U.S. Dumping on Mexican Producers" table The impact of NAFTA and other international agreements in combination with U.S. agricultural subsidies expel millions of Mexicans and other rural workers from their countries

of origin into the United States territory every year. According to Wise, who carried out a comparison of farm product prices in the U.S.-Mexico trade between 1997 and 2005, Mexico was flooded with agricultural imports exported at prices below production costs. In his research, the eight products studied included corn, soybeans, wheat, cotton, rice, beef, pork and poultry. All products showed significant increase in exportsfrom the lowest 159 percent in soybean to the largest in pork exports at 707 percent. For all products, Mexican producers prices fell from 44 to 67 percent from early 1990s levels, declining local production and increasing import dependency. Mexican crop production also fell except for corn and meats, which at lower prices, was rapidly adopted for consumption in the Mexican families diet. An estimated 2.3 million people have left agriculture in a country desperate for livelihoods, said Wise. The study estimated that the cost to Mexican producers was around $12.8 billion in the nine-year period, more than 10 percent of the U.S.-Mexico agricultural trade value annually. The other cost, the one that we, north of the border pay, is the constant migration of these displaced rural workers into the United States.

NAFTA is to corrupt for change. No amount of trade will be able to change it

NAFTA kills Mexicos domestic food production, health, agribusiness, job supply, and the environment
Carlsen 11 Foreign Policy In Focus columnist Laura Carlsen is director of the Americas Program for the Center for International Policy in Mexico City (Laura, NAFTA Is Starving Mexico, Foreign Policy in Focus, 9/20/11, ProQuest)//ER The corporate takeover of Mexico's food system has led to the food and health catastrophe. Transnational food corporations not only import freely into Mexican food markets, they are now the producers, exporters, and importers all in one, operating inside the country. Since NAFTA, corporations have gobbled up human and natural resources on an almost unbelievable scale. Livestock production has moved from small farms for local markets to Tyson, Smithfield, and Pilgrims Pride. The massive use and contamination of water and land has led to health and environmental disasters across the country. Millions of jobs have been lost to concentration and industrialized farming methods. Take the case of Corn Products International (CPI). The transnational filed a NAFTA claim against the Mexican government in 2003, claiming a loss to its business due to a tax levied on high fructose corn syrup in beverages. Mexico's reason for imposing the tax was to save a sugarcane industry that provided jobs for thousands of citizens and played a crucial economic role in many regions. The government was also frustrated by its failure under NAFTA to access the highly protected U.S. sugar market. A 2008 NAFTA tribunal ruled that Mexico had to pay $58.4 million to CPI. The government paid up on January 25, 2011. CPI posted $3.7 billion dollars in net sales the year of the decision. The fine paid by the Mexican government could have provided a year's worth of the basic food basket to more than 50,000 poor families. CPI's wholly owned subsidiary Arancia Corn Products is among the most powerful food transnationals operating in the country, along with Maseca/Archers Daniel Midland and Cargill. Large agribusiness companies allegedly played a key role in the 2007 tortilla crisis by hoarding harvest as the international price went up, artificially drying up the national market and selling at nearly double the price they paid for the harvest. That crisis brought tens of thousands of poor Mexicans out into the streets to protest a 50 percent rise in the price of tortillas. NAFTA and other FTAs give corporations the power to define what we eat, what we buy at the store, who will have a job and who won't, and whether a village sustained by local food production will survive or witness the end of generations of livelihoods.

Causes Mexican food insecurity

Aziz 7 (Nikhil Aziz, Nikhil Aziz has been Executive Director of Grassroots International since 2005. Before joining Grassroots, Nikhil was Associate Director at Political Research Associates, where he led a team that studied the conservative movement and the political right in the United States, NAFTA is Killing Tradition of Corn in Mexico, 9 November 2007, http://www.grassrootsonline.org/news/articles/naftakilling-tradition-corn-mexico) Along with the devastation of Mexicos rural economy, NAFTA has had a major impact on its ecology. Agrobiodiversity is gravely threatened as a small number of imported corn varieties root out the enormous diversity of corn in the countryside; and as imported genetically modified and corporate

patented varieties mix with centuries old varieties developed by generations of Mexican farmers and indigenous peoples. The stakes are enormous. Food insecurity, especially around diet staples poses a grave risk. Last summer, tortilla prices skyrocketed, and the growing pressure to convert corn from food to fuel for ethanol and the increasing corporate concentration of food systems and supply can only make matters much worse. Already, more than one-third of the population suffers from malnutrition and anemia; and in the rural sector, mainly among indigenous peoples, this figure rises to over 50%. Today, Grassroots partners and their allies argue, peasants and indigenous peoples need a new social compact with the Mexican State that respects their human rights including resource rights and food sovereignty; that recognizes the role and rights of rural Mexicans, including indigenous peoples, as food producers and stewards of biodiversity who play a vital role in Mexicos social and economic well being and political sovereignty. As they point out: the freedom to choose the quality, quantity and price of our food depends on our ability to produce them: without a healthy and fair national production of maize, Mexico can not continue to exist as the diverse and rich country we love.

Food insecurity causes war

Brown 11 (Lester R. Brown 2011 Writer for the Earth Policy Institute World on the Edge: How to prevent Environmental and Economic
Collapse http://www.earth-policy.org/images/uploads/book_files/wotebook.pdf)- RT

For the Mayans, it was deforestation and soil erosion. As more and more land was cleared for farming to support the expanding empire, soil erosion undermined the productivity of their tropical soils. A team
of scientists from the National Aeronautics and Space Administration has noted that the extensive land clearing by the Mayans likely also altered the regional climate, reducing rainfall. In effect, the scientists suggest, it was the convergence of several environmental trends, some reinforcing others, that led to the food shortages that brought down the Mayan civilization. 26 Although

we live in a highly urbanized, technologically advanced society, we are as dependent on the earths natural support systems as the Sumerians and Mayans were. If we continue with business as usual, civilizational collapse is no longer a matter of whether but when. We now have an economy that is destroying its natural support systems, one that has put us on a decline and collapse path. We are dangerously close to the edge. Peter Goldmark, former Rockefeller Foundation president, puts it well: The death of our civilization is no longer a theory or an academic possibility; it is the road were on. 2 Judging by the archeological records of earlier civilizations, more often than not food shortages appear to have precipitated their decline and collapse. Given the advances of modern agriculture, I had long rejected the idea that food could be the weak link in our twenty-first century civilization. Today I think not only that it could be the weak link but
that it is the weak link.

NAFTA weakened Mexican agriculture

Zayas 5/16 (Roco Zayas, writer for thenews.com, NAFTA weakened Mexican agriculture, 16 May 2013, http://thenews.com.mx/index.php/home-articulos/9620-nafta-weakened-mexican-agriculture) MEXICO CITY Economy Secretary Ildefonso Guajardo said on Wednesday that the North American Free Trade Agreement (NAFTA) has weakened Mexican agriculture, as producers havent been able to take advantage of the trade pact. A lack of public policies to strengthen the industry has led to a dependency on imported foods that were once produced in Mexico, Guajardo said at a meeting with the National Farmers Confederation (CNC). I was a negotiator in the NAFTA talks 20 years ago, Guajardo said. Rather than talk about how we went wrong in the agricultural sector, its more about how we made a mistake in implementing public policies to give more viability to the agricultural sector to address exactly what was happening from the point of view of social integration. The government should have, from the agreements signing onward, invested money in a strategic sector to achieve a transformation of productive efforts and take advantage of the situation, he said. The secretary added that there have been conflicts among industry leaders and inconsistent food health standards, which have led to increases in some prices in the basic food basket. We made our agricultural industry

weak, made the budget weak and, after 20 years, (the agreement) surpassed us, without being able to find the best way to integral trade in this key sector, he said.

High U.S. farm subsidies from NAFTA hurts Mexican agricultural exports
Wise 10 (Timothy Wise, Mexican Rural Development Research Report No. 7, Woodrow Wilson International Center for Scholars, 2010, Agricultural Dumping Under NAFTA: Estimating the Costs of U.S. Agricultural Policies to Mexican Producers, http://www.ase.tufts.edu/gdae/policy_research/AgNAFTA.html With the opening of the Mexican economy under the North American Free Trade Agreement (NAFTA), Mexican agriculture came under new competitive pressures from U.S. exports. High U.S. farm subsidies for exported crops, which compete with Mexican products, have prompted charges that the level playing field NAFTA was supposed to create is in fact tilted heavily in favor of the United States. This paper assesses the costs of U.S. agricultural policies to Mexican producers by examining the extent to which the United States exported agricultural products to Mexico at prices below their costs of production, one of the definitions of dumping in the WTO. We estimate dumping margins for eight agricultural goods corn, soybeans, wheat, rice, cotton, beef, pork, and poultry all of which are heavily supported (directly or indirectly) by the U.S. government, were produced in Mexico in significant volumes before NAFTA, and experienced dramatic increases in U.S. exports to Mexico after the agreement. We find that: U.S. exports of the eight supported commodities analyzed here have increased dramatically since the early 1990s, rising between 159% and 707%. For supported crops, the dumping margins the percentage by which export prices are below production costs from 1997-2005 ranged from 12% for soybeans to 38% for cotton. Assuming Mexican producer prices were depressed by the same percentage as the dumping margins, below-cost exports cost Mexican producers of corn, soybeans, wheat, cotton and rice an estimated $9.7 billion from 1997-2005, just over $1 billion per year. Corn showed the highest losses. Average dumping margins of 19% contributed to a 413% increase in U.S. exports and a 66% decline in real producer prices in Mexico from the early 1990s to 2005. The estimated cost to Mexican producers of dumping-level corn prices was $6.6 billion over the nine-year period, an average of $99 per hectare per year, or $38 per ton. Meats were exported at below-cost prices because U.S. producers benefited from below-cost soybeans and corn, key components in feed. This so-called implicit subsidy to meat producers resulted in dumping margins of 5-10% on exported meat. This cost Mexican livestock producers who did not use imported feed an estimated $3.2 billion between 1997 and 2005. The largest losses were in beef, at $1.6 billion, or $175 million per year. We estimate total losses to Mexican producers from dumping-level U.S. export prices at $12.8 billion from 1997-2005 for the eight products (in constant 2000 US dollars). To put these losses in context, the average annual loss of $1.4 billion is equivalent to 10% of the value of all Mexican agricultural exports to the United States and greater than the current value of Mexican tomato exports to the United States.

NAFTA causes starvation, food riots, and obesity in Mexico

Carlsen 11 Foreign Policy In Focus columnist Laura Carlsen is director of the Americas Program for the Center for International Policy in Mexico City (Laura, NAFTA Is Starving Mexico, Foreign Policy in Focus, 9/20/11, ProQuest)//ER

Since the North American Free Trade Agreement (NAFTA) became the law of the land, millions of Mexicans have joined the ranks of the hungry. Malnutrition is highest among the country's farm families, who used to produce enough food to feed the nation. As the blood-spattered violence of the drug war takes over the headlines, many Mexican men, women, and children confront the slow and silent violence of starvation. The latest reports show that the number of people living in "food poverty" (the inability to purchase the basic food basket) rose from 18 million in 2008 to 20 million by late 2010. About one-fifth of Mexican children currently suffer from malnutrition. An innovative measurement applied by the National Institute for Nutrition registers a daily count of 728,909 malnourished children under five for October 18, 2011. Government statistics report that 25 percent of the population does not have access to basic food. Since the 2008 food crisis, there has been a three percent rise in the population without adequate access to food. The number of children with malnutrition is 400,000 kids above the goal for this year. Newborns show the highest indices of malnutrition, indicating that the tragedy begins with maternal health. The dramatic change in Mexican eating habits since NAFTA is not only reflected in the millions who go to bed hungry. On the other side of the scale, Mexico has in just a decade and a half become second only to the United States worldwide in morbid obesity. Child obesity, overweight, and diabetes now constitute major health problems, alongside the more traditional problem of hunger. It's not that the rich are getting too fat and the poor too thin, although inequality plays a role in the erosion of healthy diets for all. Fatness no longer represents abundance. It is the poor who drink cheap Coca Cola when they do not have access to potable water or who give their kids a bag of potato chips when local fresh food is no longer available. The International Journal of Obesity finds that worldwide the spread of what they call "the Western diet" ("high in saturated fats, sugar, and refined foods but low in fiber) has meant that "the burden of obesity is shifting towards the poor." The NAFTA generation reflects the paradigm so eloquently described by food researcher and activist Raj Patel of "stuffed and starved". With another food crisis looming due to rising international prices, Mexico could face food riots as well as the spread of starvation and its consequences over the coming year. Unless the riots turn violent or spark more widespread social upheaval as they did in Arab countries, it's not likely that the news media will pay any attention.

NAFTA starves Mexico

Carlsen 11 (Laura Carlsen, Foreign Policy In Focus columnist Laura Carlsen is director of the Americas Program for the Center for International Policy in Mexico City, NAFTA Is Starving Mexico, 20 October 2011, http://fpif.org/nafta_is_starving_mexico/, AL) The corporate takeover of Mexicos food system has led to the food and health catastrophe. Transnational food corporations not only import freely into Mexican food markets, they are now the producers, exporters, and importers all in one, operating inside the country. Since NAFTA, corporations have gobbled up human and natural resources on an almost unbelievable scale. Livestock production has moved from small farms for local markets to Tyson, Smithfield, and Pilgrims Pride. The massive use and contamination of water and land has led to health and environmental disasters across the country. Millions of jobs have been lost to concentration and industrialized farming methods. Take the case of Corn Products International (CPI). The transnational filed a NAFTA claim against the Mexican government in 2003, claiming a loss to its business due to a tax levied on high fructose corn syrup in beverages. Mexicos reason for imposing the tax was to save a sugarcane industry that provided jobs for thousands of citizens and played a crucial economic role in many regions. The government was also frustrated by its failure under NAFTA to access the highly protected U.S. sugar market. A 2008 NAFTA tribunal ruled that Mexico had to pay $58.4 million to CPI. The government paid up on January 25, 2011. CPI posted $3.7 billion dollars in net sales the year of the decision. The fine paid by the Mexican

government could have provided a years worth of the basic food basket to more than 50,000 poor families. CPIs wholly owned subsidiary Arancia Corn Products is among the most powerful food transnationals operating in the country, along with Maseca/Archers Daniel Midland and Cargill. Large agribusiness companies allegedly played a key role in the 2007 tortilla crisis by hoarding harvest as the international price went up, artificially drying up the national market and selling at nearly double the price they paid for the harvest. That crisis brought tens of thousands of poor Mexicans out into the streets to protest a 50 percent rise in the price of tortillas. NAFTA and other FTAs give corporations the power to define what we eat, what we buy at the store, who will have a job and who wont, and whether a village sustained by local food production will survive or witness the end of generations of livelihoods.

NAFTA increases food prices

Carlsen 11 (Laura Carlsen, Foreign Policy In Focus columnist Laura Carlsen is director of the Americas Program for the Center for International Policy in Mexico City, NAFTA Is Starving Mexico, 20 October 2011, http://fpif.org/nafta_is_starving_mexico/, AL) Something has gone terribly wrong. The nation that was slated for prosperity when it signed NAFTA has become an international example of severe structural problems in the food chain, from how it produces its food to what and how much (or how little) it consumes. Mexican malnutrition has its roots in the way NAFTA and other neoliberal programs forced the nation to move away from producing its own basic foods to a food security model. Food security posits that a country is secure as long as it has sufficient income to import its food. It separates farm employment from food security and ignores unequal access to food within a country. The idea of food security based on market access comes directly from the main argument behind NAFTA of comparative advantage. Simply stated, economic efficiency dictates that each country should devote its productive capacity to what it does best and trade liberalization will guarantee access across borders. Under the theory of comparative advantage, most of Mexico was deemed unfit to produce its staple food crop, corn, since its yields were way below the average for its northern neighbor and trade partner. Therefore, Mexico should turn to corn imports and devote its land to crops where it supposedly had a comparative advantage, such as counterseasonal and tropical fruits and vegetables. Sounds simple. Just pick up three million inefficient corn producers (and their families) and move them into manufacturing or assembly where their cheap labor constitutes a comparative advantage. The cultural and human consequences of declaring entire peasant and indigenous communities obsolete were not a concern in this equation. Seventeen years after NAFTA, some two million farmers have been forced off their land by low prices and the dismantling of government supports. They did not find jobs in industry. Instead most of them became part of a mass exodus as the number of Mexican migrants to the United States rose to half a million a year. In the first few years of NAFTA, corn imports tripled and the producer price fell by half. Conversion to other crops turned out to take years in most cases. Prices were volatile and harvests unreliable. It was not feasible at all on many small, often rocky plots where corn guarantees a subsistence diet for farm families. Niche markets failed to grow to much more than 2 percent of total agricultural production. The areas that adapted successfully to industrial agriculture and agroexport crops are characterized by flagrant violation of the labor rights of migrant farm workers, widespread pollution and water waste, and extreme concentration of land and resources. For the hungry, this means that prices set on the international market determine who eats and who starves. Mexican consumers now pay more for tortillas and food in general. Price hikes on the international market push basic food out of reach for the millions of poor in the country.

Kills Mexicos corn economy

Paley 3/12 (Dawn Paley, Masters in Journalism from the University of British Columbia and BA in arts and womens studies and first nations studies from Simon Fraser University, Corn on the Border: NAFTA and Food in Mexico, 13 March 2013, http://upsidedownworld.org/main/mexico-archives-79/4183corn-on-the-border-nafta-and-food-in-mexico, AL) Regardless of the difficulties they face, farmers make up 20 per cent of Mexicos labour force, compared with two per cent in Canada and the US. Small, medium, and large farmers throughout Mexico harvest a total of just over 20 million hectares of land each year, according to INEGI, the countrys national statistics agency. Almost eight million hectares of corn are planted in Mexico every year, followed by pastures for ranching, sorghum, and beans. Mexico is widely known as the birthplace of corn, over 52 races of corn grow here, some of which may be uniquely suited to withstand the impacts of climate change. That genetic wealth and diversity of Mexican corn stocks, however, is also under threat. It has been over 10 years since researchers began publishing peer-reviewed articles proving that the DNA from genetically modified (GM) corn had begun mixing with indigenous species of corn in remote mountain areas of Oaxaca. The fight against genetically modified corn has been ongoing since the first evidence of GM corn was discovered. Some say this corn was introduced in Mexico through aid programs, where farmers were given corn seeds without being warned that they were genetically modified seeds. According to Greenpeace Mexico, the worlds largest agro-business outfits, like Monsanto, Pioneers, and Dow Agribusiness, have put pressure on Mexicos new president, Enrique Pea Nieto, to allow commercial planting and harvesting of genetically modified corn. A recent action to keep up the pressure against genetically modified corn saw tens of thousands march in Mexico City as well as a rotating hunger strike under the enormous Angel of Independence Statue. We believe that the only relation that we, as the growers, have with Mother Earth are the natural seeds, hunger striker Francisco Jimnez Murillo told Democracy Now! We have to remember that Mexico has 60 distinct varieties of corn that we have cultivated over the last 10,000 years, and with this, we have fed the world. It is a struggle for the life and health of our country. The struggle for food sovereignty and health is one that is reflected in every facet of life in Mexico. These days, markets like the one around the corner from where I live face stiff competition from big box grocery stores popping up all over the country. In 2011 alone, Wal-Mart opened one store a day in Mexico and Central America. In the face of these changes, some farmers organize against genetically modified seeds, others get by, planting traditional crops, while still others have packed up and moved away, mostly to the US, but others to Canada, where they work to earn remittances for their families. The changes to Mexicos agricultural and food systems over the past 30 years have been severe, but they are not irreversible.

Econ ADV

US Scenario
Economic collapse is inevtiable peak oil, food and structural instabilities make growth unsustainable. Collapse now causes a shift to localized economies. Further growth causes catastrophic failure Korowicz 11 (5/14/11, David, physicist and human systems ecologist, the director of The Risk/Resilience
Network in Ireland, a board member of FEASTA (The Foundation for the Economics of Sustainability), In the world, at the limits to growth,http://www.feasta.org/2011/05/14/in-the-world-at-the-limits-to-growth/)
Yet our feet of clay are that our

economy and civilisation exist only by virtue of resource flows from our environment. The only laws in economics are the laws of physics, everything else is contingent, supposition or vanity. An economy, growing in size and complexity, is firstly a thermodynamic system requiring increasing energy flows to grow and avoid decay. Waste, be it greenhouse gasses or landfill is also a natural outcome of such a thermodynamic process. News from Elsewhere Its been part of the background noise for over half a century, warnings about resource scarcity, biodiversity loss, soil erosion or climate change. But impacts were always on the imaginative horizon. Sometime, far enough into the future to be re-assuring to a species that evolved with a clear preference for the short-term. Or on the hinterland between our safe European home and the barbarian other, where starvation, environmental disasters, angry mobs and crazy despots have always demanded our attention, at least while on TV. Yes we can! Yes we can! - chanted the posse of teenagers following Al Gore through a pavilion in Poznan,
Poland for the annual gathering of climate policy acronyms. When not distracted by the ever-present, weve responded to these warnings with treaties and laws, technology and exhortation. Of course, every ecological indicator kept getting worse. And we kept on about treaties and laws, and break-through technologies. Our mythic world-views gave us the shared faith that we may not be there yet, but we could, once a brilliant scheme is in place, a climate law passed, technologies adopted, evil bankers restrained, or once people just realised our predicament. Yes We Can! Yes We Can! Indeed, we could transcend our grubby selfishness and short-termism so we tied together the belief that we could will ecological sustainability and global equity. Still, our

resource and environmental sink demands keep increasing, ecological indicators decline and inequality rises. The reality is that we are locked into an economy adapted to growth, and that means rising energy and resource flows and waste. By lock-in, we mean that our ability to change major systems we depend upon is limited by the complexity of interdependencies, and the risk that the change will undermine other systems upon which we depend. So we might wish to change the
banking or monetary system, but if the real and dynamic consequences lead to a major bank freeze lasting more than a couple of days we will have major food security risks, massive drops in economic production, and risks to infrastructure. And if we want to make our food production and distribution more resilient to such shocks, production will fall and food prices will need to be higher, which will in the short-to-medium term drive up unemployment, lead to greater poverty, and pose even greater risks to the banking system. It is an oxymoron to say we can do something unsustainable forever. How would you know if we were approaching a limit, the end of growth? By warnings? Listen. By the great and the good, standing shoulder-to-shoulder, saying Ladies & gentleman we have a really big problem!? Politicians and civil servants, the IMF and the OECD, all missed the credit crisis of 2007, despite having expertise in the area and an abundant historical literature about asset bubbles. They embody the dogmatism of the age, they are a pivot point about which are world-views are confirmed. They mirror the authority of the court of Pope Urban VIII, stuffed with astronomer-astrologers, the economists of their age, confirming the earth centric universe against Galileo and Copernicus before him. What the Galileos of today are saying is that we

are at or near the peak of global oil production now. That as affordable oil declines, the global economy must contract. That we do not have the time, nor resources to keep the economy growing by substituting for oil with efficiency measures, renewable or nuclear energy, or technology. That talk of an electric car future, advanced IT-renewable energy convergent infrastructure, and global super-grids is a fancy. The most obvious problem with focusing on this vision at the horizon is that you dont see that the ground is opening up beneath your feet. We will not get to that horizon because all the things you need to get there- monetary and financial systems, purchasing power and economies of scale, production systems, infrastructure and global trust networks-will be undermined by the convergence of a peak of global oil production, a peak of food production, and a giant credit bubble. The ground will open up, we will fall, and our visions will fall further and further from our grasp. They are saying that global food production is hitting an array of ecological constraints, while population growth and changing diets are

driving up demand. They note that current food production is massively subsidised through fossil fuel inputs, and that as those inputs become less available, and people become poorer due to economic contraction, food productivity and access will be undermined. In totality, we are at the edge of an evolving systemic crisis. Peak oil and food constraints are likely to undermine the stability of our integrated globalised economy. The core pillars of that economy: critical infrastructure, production flows, economies of scale, the financial and monetary system, behavioural adaptation, resource access and energy flows-are likely to begin forcing contagious failure. The driving force of this failure is likely to be the fastest and most unstable process-the impact of energy and food constrained economic growth, and an already vulnerable monetary and financial system dependent upon continuing growth. Tightening binds
Whatever of Irelands economic woes, the real debt bubble is global. The debt relative to GDP is far greater now in the US, UK, and much of Europe, than it ever was leading up to the great depression. Like many countries we responded to our debt bubble with more debt, we just shifted it onto the sovereign or the printing press. The

indebted world, even without oil and food price rises is straining at the limits of debt servicing and credibility. Yet it is demanding even more credit, while its ability to service the debt is being undermined by debt deflation, austerity, rising job losses, and defaults. The bank lenders of that money can only lose so much before they are too are insolvent. Rising food and energy prices are driving the deflationary forces even harder. And if central banks misinterpret the cause of food and oil price rises, and raise interest rates, the deflationary pressures risk becoming cyclonic. The cost of essentials and debt servicing rise, while income declines. Discretionary spending will collapse, job losses and defaults rise, income will declines further. This re-enforcing spiral of decline will increase, and spread to more and more countries. The fear of contagion from peripheral Eurozone defaults are not merely that they could topple French, UK, and German banks, but that this could bring down US banks and effectively shut down the global financial system in very short shift. The destabilising force is not just that the banks are already in a precarious position, but a monstrous pile of derivative contracts worth ten to twenty times the global economy that hangs over the financial system. Some of those contracts are effectively insurance against default. If bank defaults start spreading, then other banks and the shadow financial system will be forced to cover obligations on
default, or increase premiums on their insurance. This may cause a fire-sale of assets, whereby the banks bluff is called, and they are shown to have values far below what is required for solvency. What everybody wants and needs is a sudden and explosive increase in the production of real goods and services (GDP) to make their continual debt requirements serviceable. But that,even were it remotely possible,

would require a big increase in oil flows through the global economy, just as global oil production has peaked and begins its decline. It cannot happen. This means that the global financial system is essentially insolvent now. The only choice is default or inflation on a global scale. It mean banks are insolvent, because their assets (loans) cannot be repaid; or
they can be solvent (assuming appropriate action taken) but their depositors cannot redeem their deposits at anything like their real value. It means the vast overhang of stocks and bonds, including pensions, and insurance cannot be realised in real goods. It means our monetary

systems, dependent on fiat money, fractional reserve banking, and interest can only collapse. High oil and food prices are essentially probing the limits of the stability of the globalised economy. They will probe until there is a major collapse in global economic production. At which point our energy prices may fall, but our real income and purchasing power will fall faster. And markets will discover this truth quicker than monetary authorities and governments. Its expression will be in deeper and deeper economic stresses and major systemic banking collapses. Official responses will become
more and more impotent, as their fundamental economic and policy tools no longer work, and their patina of control becomes hollow. If and

when banking system contagion spreads to supply-chain contagion we may face existential challenges. Even were we to have the perfect monetary and financial system, without debt and well controlled, peak oil and food would present an unprecedented shock. As incomes shrunk while essentials such as food and energy become more expensive, non-discretionary spending would be squeezed out. In the developed world, non-discretionary goods and services are just about all we produce. So the result would still be mass unemployment. Our
critical infrastructure would still be increasingly vulnerable for various reasons, and monetary instability would still destabilise supply-chains. Facing Ourselves & Facing Our Future We

are at the beginning of a process in which our world-views crash against a fundamentally unstable financial system and ecological constraints. A time where we will learn that what was, will never return; and what was expected, can never be. We are facing a time of loss and uncertainty. A
time of bank-runs, lost savings and pensions, of mass unemployment, electricity and mobile phone black-outs, of hunger and empty supermarket shelves. A

localised economy will no longer be something environmentalists aspire to develop; rather it will be forced upon us as bank failures, monetary uncertainty, and lost purchasing power sever links in the web of the

global economy. But we no longer have indigenous economies to fall back upon. The gap between expectations and what can be realised
is historically a major source of popular anger, and can ignite a cycle of fear, blame, violence, scape-goating, and authoritarian leadership from either left or right. It can give the avaricious the power and cover to appropriate wealth that might better be used for collective welfare. Yet who gave us the right to our expectations? They were built on the semi-blind self-organisation of a complex human society over generations. They were built on deep threads of human behaviour-competition and cooperation, mating selection and status-that result from our evolution over the history of life on earth. They were built on the deposits of ancient sunlight hidden below the Earths surface, the minerals in soil, and the global climate that provided the stability for our species to flourish. As a species there is no one to blame, unless we cling to the delusion that we are the displaced God who transcended our own ecology. Yes, we

can and will build a largely local economy out of the ruins of a collapsed globalised one. It will be a much poorer one and one where we will have lost much of what we take for granted. It can also provide a good life, where our basic needs are met, where meaningful lives can be lived, and a rich texture of experience found.

Best scientific models prove growth makes extinction-level warming inevitable---only dedev solves
Dr. Minqi Li 10, Assistant Professor Department of Economics, University of Utah, The 21st Century Crisis: Climate Catastrophe or Socialism Paper prepared for the David Gordon Memorial Lecture at URPE Summer Conference 2010 The global average surface temperature social ownership of the means of production and society-wide planning (Section 6). The global average surface temperature

is now about 0.8C (0.8 degrees Celsius) higher than in pre-industrial times. Under the current trend, the world is on track towards a long-term warming between [4 and 8 degrees Celsius] 4C and 8C. At this level of global warming, the world would be in an extreme greenhouse state not seen for almost 100 million years, devastating human civilization and destroying nearly all forms of life on Earth (Conner and McCarthy 2009). The scientific community has reached consensus that the current global warming results from the excessive accumulation in the atmosphere of carbon dioxide (CO2 ) and other greenhouse gases (such as methane and nitrous oxide) emitted by human economic activities. 1 The capitalist historical epoch has been characterized by the explosive growth of material production and consumption. The massive expansion of the world economy has been powered by fossil fuels (coal, oil, and natural gas). Since 1820, the world economy has expanded by about seventy times and the world emissions of carbon dioxide from fossil fuels burning have increased by about sixty times (see Figure 1). At the United Nations Conference
on Climate Change concluded in Copenhagen in December 2009, the worlds governments officially committed to the objective of limiting global warming to no more than 2C. However, according to the Climate Action Tracker, despite the official statement, the national

governments current pledges regarding emission reduction in fact imply a warming of at least [3 degrees] 3C by the end of the 21st century with more warming to come in the following centuries (Climate Action Tracker 2010). In reality, all the major national governments are committed to infinite economic growth and none of them is willing to consider any emission reduction policy that could undermine economic growth. This is not simply because of intellectual ignorance or lack of political will. The pursuit of endless accumulation of capital (and infinite economic growth) is derived from the basic laws of motion of the capitalist economic system. Without fundamental social transformation, human civilization is now on the path to self-destruction. The next section (section 2) reviews the basic scientific facts concerning the climate change crisis. Without an end to economic growth, it is virtually impossible for meaningful climate stabilization to be achieved (section 3). However, both capitalist enterprises and
states are constantly driven to expand production and consumption. The system of nation states effectively rules out a meaningful global political solution to the climate change crisis (section 4). The climate change crisis is but one of several long-term historical trends that are now leading to the structural crisis of capitalism (section 5). The wide planning (section 6).

resolution of the crisis and the survival of humanity require the building of a fundamentally different social system that is based on social ownership of the means of production and society-

No Impact (Long)
Decline does not cause war a) History Ferguson 6
FERGUSON, Professor of History at Harvard , OCTOBER 6
(Niall, MA, D.Phil., is the Laurence A. Tisch Professor of History at Harvard University. He is a resident faculty member of the Minda de Gunzburg Center for European Studies. He is also a Senior Reseach Fellow of Jesus College, Oxford University, and a Senior Fellow of the Hoover Institution, Stanford University, Foreign Affairs, Sept/Oct)

Nor can economic crises explain the bloodshed. What may be the most familiar causal chain in modern
historiography links the Great Depression to the rise of fascism and the outbreak of World War II. But that simple story leaves too much out. Nazi Germany started the war in Europe only after its economy had recovered.

Not all the countries affected by the Great Depression were taken over by fascist regimes, nor did all such regimes start wars of aggression. In fact, no general relationship between economics and conflict is discernible for the century as a whole. Some wars came after periods of growth, others were the causes rather than the consequences of economic catastrophe, and some severe economic crises were not followed by wars.

b) No resources Bennett 2000 PolSci Prof, Penn State (Scott and Timothy Nordstrom, Foreign Policy Substitutability and Internal Economic Problems
in Enduring Rivalries, Journal of Conflict Resolution, Ebsco) Conflict settlement is also a distinct route to dealing with internal problems that leaders in rivalries may pursue when faced with internal problems. Military competition between states requires large amounts of resources, and rivals require even more attention. Leaders

may choose to negotiate a settlement that ends a rivalry to free up important resources that may be reallocated to the domestic economy. In a guns versus butter world of economic trade-offs, when a state can no longer afford to pay the expenses
associated with competition in a rivalry, it is quite rational for leaders to reduce costs by ending a rivalry. This gain (a peace dividend) could be achieved at any time by ending a rivalry. However, such a gain is likely to be most important and attractive to leaders when internal conditions are bad and the leader is seeking ways to alleviate active problems. Support

for policy change away from continued rivalry is more likely to develop when the economic situation sours and elites and masses are looking for ways to improve a worsening situation. It is at these times that the pressure to cut military investment will be greatest and that state leaders will be forced to recognize the difficulty of continuing to pay for a rivalry.
Among other things, this argument also encompasses the view that the cold war ended because the Union of Soviet Socialist Republics could no longer compete economically with the United States.

c) Studies Miller 2000 Professor of Management, Ottawa (Morris, Poverty As A Cause Of Wars?,
http://www.pugwash.org/reports/pac/pac256/WG4draft1.htm, AG) Thus, these armed conflicts can hardly be said to be caused by poverty as a principal factor when the greed and envy of leaders and their hegemonic ambitions provide sufficient cause. The poor would appear to be more the victims than the perpetrators of armed conflict. It might be alleged that some dramatic event or rapid sequence of those types of events that lead to the exacerbation of poverty might be the catalyst for a violent reaction on the part of the people or on the part of the political leadership who might be tempted to seek a diversion by finding/fabricating an enemy and going to war. According to a study undertaken by Minxin Pei and Ariel Adesnik of the

Carnegie Endowment for International Peace, there would not appear to be any merit in this hypothesis. After studying 93 episodes of economic crisis in 22 countries in Latin America and Asia in the years since World War II they concluded that Much of the conventional wisdom about the political impact of economic crises may be wrong... The severity of economic crisis - as measured in terms of inflation and negative growth - bore no relationship to the collapse of regimes. A more direct role was played by political variables such as ideological polarization, labor radicalism, guerilla insurgencies and an anti-Communist military... (In democratic states) such changes seldom lead to an outbreak of

violence (while) in the cases of dictatorships and semi-democracies, the ruling elites responded to crises by increasing repression (thereby using one form of violence to abort another.

d) 2008 proves Fareed Zakaria 9 was named editor of Newsweek International in October 2000, overseeing all
Newsweek editions abroad, December 12, 2009, The Secrets of Stability, http://www.newsweek.com/2009/12/11/the-secrets-of-stability.html Others predicted that these economic shocks would lead to political instability and violence in the worst-hit countries. At his confirmation hearing in February, the new U.S. director of national intelligence, Adm. Dennis Blair, cautioned
the Senate that "the financial crisis and global recession are likely to produce a wave of economic crises in emerging-market nations over the next year." Hillary Clinton endorsed this grim view. And she was hardly alone. Foreign Policy ran a cover story predicting serious unrest in several emerging markets.

Of one thing everyone was sure: nothing would ever be the same again. Not the financial

industry, not capitalism, not globalization. One year later, how much has the world really changed? Well, Wall Street is home to two fewer investment banks (three, if you count Merrill Lynch). Some regional banks have gone bust. There was some turmoil in Moldova and (entirely unrelated to the financial crisis) in Iran. Severe problems remain, like high unemployment in the West, and we face new problems caused by responses to the crisissoaring debt and fears of inflation. But overall,

things look nothing like they did in the 1930s. The predictions of economic and political collapse have not materialized at all.

e) Diversionary theory is false

Boehmer 2007 political science professor at the University of Texas (Charles, Politics & Policy, 35:4, The Effects of Economic Crisis,
Domestic Discord, and State Efficacy on the Decision to Initiate Interstate Conflict, WEA)
This article examines the contemporaneous effect of low economic growth and domestic instability on the threat of regime change and/ or involvement in external militarized conflicts. Many studies

of diversionary conflict argue that lower rates of economic growth should heighten the risk of international conflict. Yet we know that militarized interstate conflicts, and especially wars, are generally rare events whereas lower
rates of growth are not. Additionally, a growing body of literature shows that regime changes are also associated with lower rates of economic growth. The question then becomes which event, militarized interstate conflict or regime change, is the most likely to occur with domestic discord and lower rates of economic growth?

Diversionary theory claims that leaders seek to divert attention away from domestic problems such as a bad economy or political scandals, or to garner increased support prior to elections. Leaders then supposedly externalize discontented domestic sentiments
onto other nations, sometimes as scapegoats based on the similar in-group/out-group dynamic found in the research of Coser (1956) and Simmel (1955), where foreign countries are blamed for domestic problems. This process is said to involve a rally -round-the-flag effect, where a leader can expect a short-term boost in popularity with the threat or use of force (Blechman, Kaplan, and Hall 1978; Mueller 1973). Scholarship on diversionary conflict has focused most often on the American case1 but recent studies have sought to identify this possible behavior in other countries.2 The Falklands War is often a popular example of diversionary conflict (Levy and Vakili 1992). Argentina was reeling from hyperinflation and rampant unemployment associated with the Latin American debt crisis. It is plausible that a success in the Falklands War may have helped to rally support for the governing Galtieri regime, although Argentina lost the war and the ruling regime lost power. How many other attempts to use diversionary tactics, if they indeed occur, can be seen to generate a similar outcome? The goal of this article is to provide an assessment of the extent to which diversionary strategy is a threat to peace. Is

this a colorful theory kept alive by academics that has little bearing upon real events, or is this a real problem that policy makers should be concerned with? If it is a strategy readily available to
leaders, then it is important to know what domestic factors trigger this gambit. Moreover, to know that requires an understanding of the context in external conflict, which occurs relative to regime changes. Theories

of diversionary conflict usually emphasize the potential benefits of diversionary tactics, although few pay equal attention to the prospective costs associated with such behavior. It is not contentious to claim that leaders typically seek to remain in office. However, whether they can successfully manipulate public opinion regularly during periods of domestic unpopularity through their states participation in foreign militarized conflictsespecially outside of the American caseis a question open for debate. Furthermore, there appears to be a logical disconnect between diversionary theories and extant studies of
domestic conflict and regime change. Lower rates of economic growth are purported to increase the risk of both militarized interstate conflicts (and internal conflicts) as well as regime changes (Bloomberg and Hess 2002). This implies that if

leaders do, in fact, undertake diversionary conflicts, many may still be thrown from the seat of powerespecially if the outcome is defeat to a foreign enemy. Diversionary conflict would thus seem to be a risky gambit (Smith 1996). Scholars such as MacFie (1938) and Blainey (1988) have nevertheless questioned the validity of the diversionary thesis. As noted by Levy (1989), this perspective is rarely formulated as a cohesive and comprehensive theory, and
there has been little or no knowledge cumulation. Later analyses do not necessarily build on past studies and the discrepancies between inquiries are often difficult to unravel. Studies

have used a variety of research designs, different dependent variables (uses of force, major uses of force, militarized disputes), different estimation techniques, and different data sets covering different time periods and different states (Bennett and Nordstrom 2000,
39). To these problems, we should add a lack of theoretical precision and incomplete model specification. By a lack of theoretical precision, I am referring to the linkages between economic conditions and domestic strife that remain unclear in some studies (Miller 1995; Russett 1990). Consequently, extant studies are to a degree incommensurate; they offer a step in the right direction but do not provide robust cross-national explanations and tests of economic growth and interstate conflict. Yet a few studies have attempted to provide deductive explanations about when and how diversionary tactics might be employed. Using a Bayesian updating game, Richards and others (1993) theorize that while the use of force would appear to offer leaders a means to boost their popularity, a poorly performing

economy acts as a signal to a leaders constituents about his or her competence. Hence, attempts

to use diversion are likely to fail either because incompetent leaders will likewise fail in foreign policy or people will recognize the gambit for what it is. Instead, these two models conclude that diversion is likely to be undertaken particularly by risk-acceptant leaders. This stress on a heightened risk of
removal from office is also apparent in the work of Bueno de Mesquita and others (1999), and Downs and Rocke (1994), where le aders may gamble for resurrection, although the diversionary scenario in the former study is only a partial exten sion of their theory on selectorates, winning coalitions, and leader survival. Again, how often do leaders fail in the process or are removed from positions of power before they can even initiate diversionary tactics? A few studies focusing on leader tenure have examined the removal of leaders following war, although almost no study in the diversionary literature has looked at the effects of domestic problems on the relative risks of regime change, interstate conflict, or both events occurring in the same year.3

No Impact (Short)
Studies prove decline doesnt cause war Miller 2000 Professor of Management, Ottawa (Morris, Poverty As A Cause Of Wars?,
http://www.pugwash.org/reports/pac/pac256/WG4draft1.htm, AG) Thus, these armed conflicts can hardly be said to be caused by poverty as a principal factor when the greed and envy of leaders and their hegemonic ambitions provide sufficient cause. The poor would appear to be more the victims than the perpetrators of armed conflict. It might be alleged that some dramatic event or rapid sequence of those types of events that lead to the exacerbation of poverty might be the catalyst for a violent reaction on the part of the people or on the part of the political leadership who might be tempted to seek a diversion by finding/fabricating an enemy and going to war. According to a study undertaken by Minxin Pei and Ariel Adesnik of the

Carnegie Endowment for International Peace, there would not appear to be any merit in this hypothesis. After studying 93 episodes of economic crisis in 22 countries in Latin America and Asia in the years since World War II they concluded that Much of the conventional wisdom about the political impact of economic crises may be wrong... The severity of economic crisis - as measured in terms of inflation and negative growth - bore no relationship to the collapse of regimes. A more direct role was played by political variables such as ideological polarization, labor radicalism, guerilla insurgencies and an anti-Communist military... (In democratic states) such changes seldom lead to an outbreak of violence (while) in the cases of dictatorships and semi-democracies, the ruling elites responded to crises by increasing repression (thereby using one form of violence to abort another.

Nafta important now reform will destroy economy turns advantage

NAFTA is key to the US economy Canadian- American Business Council 8- The Premier Voice of the Canadian American Business Community (The
economic benefits of NAFTA, April 2008, http://canambusco.org/resources/TheEconomicBenefitsofNAFTA.pdf)//RT From the current U.S. governments perspective, the

U.S. economy has been a big winner under NAFTA. U.S. Trade Representative Susan Schwab says U.S. merchandise exports to Canadian and Mexico grew more rapidly 157% than U.S. exports to the rest of the world, which was 108%. About US$2.4 billion worth of goods crosses the northern and southern borders each day. As a result, Canada and Mexico are the U.S.s first and second largest export markets, although China is soon expected to be the U.S.'s largest trading partner.
Initial worries about NAFTA, from the U.S. perspective, had little to do with trade with Canada. Instead, former presidential candidate Ross Perot, characterized then widespread concerns about America job losses to Mexico as that giant sucking sound. That does not appear to have happened. Instead, Schwab says that U.S.

economic growth during the past 14 years of NAFTA has been strong: U.S. employment rose 22% to 137.2 million in December 2006 from 112.2 million in December 1993. The average unemployment rate was 5.1% between 1994 and 2006, compared with 7.1% between 1981 and 1993. U.S. manufacturing output rose by 63% between 1993 and 2006, nearly double the 37% seen between 1980 and 1993. Wages in the same sector increased 1.6% between 1993 and 2006
compared with 0.9% between 1980 and 1993. Excluding housing, U.S. business investment has risen by 107% since 1993, compared with 45% between 1980 and 1993The U.S.

Trade Representative also insists that NAFTAs investment provisions such as Chapter 11 do not prevent the U.S. or any NAFTA country from adopting or maintaining non-discriminatory laws or regulations that protect the environment, worker rights, health and safety or other public interest. Schwab notes that to date the U.S. has not lost a challenge in cases decided under NAFTA, nor has it paid a penny in damages to resolve any investment dispute. Even if the U.S. were to lose a case, it could be directed to pay compensation but it could not be required to change the laws or regulations at issue.

Economic decline breaks down cooperation and leads to war heg decline, falling trade, rising protectionism, and diversionary tactics.
Royal 10 Director of Cooperative Threat Reduction Policy, US-Department of Defense, policy advisor (Jedidiah, Economics of War and Peace: Economic, Legal, and Political Perspectives, pg. 212-214; Print.)//Beddow The counterargument to contagion is the risk-sharing argument. It suggests that while trade and financial linkages may spread a crisis, this creates a cushioning effect that, overall, minimizes the effects on any individual state. In other words, interdependence creates shock-absorbing linkages that soften a states vulnerability to dramatic economic downturns (see, e.g., Kelemli-Ozcan, Sorensen, & Yosha, 2003). Gallegati, Greenwald, Richiardi, and Stiglitz (2008) have made a convincing observation that would appear to clarify this debate. They have provided statistical modeling indicating that risk-sharing and contagion are in fact two sides of the same coin. When economic times are good, inter-linkages provide mechanisms for the diffusion of individual agents that face a liquidity crisis. A leader can request a creditor defer payment, whereas a creditor can then transfer this cost on to other agents. As such the system would absorb the crisis. When liquidity is relatively more scarce during down times, a sufficiently large negative shock will use those very same inter-linkages to transmit that shock to other agents in the system. As a result, risk sharing is beneficial only when the overall economic environment is favourable, while in harsh times it might be better to stay alone *linkage during market downturns+ becomes socially detrimental; not only is it that the expected number of defaults is higher when the economic agents are connected, but defaults
become a systemic failure (Gallegati et al., 2008. Pp.5. 16). Kose, Prasad, and Terrones (2009) considered the same question and found only mild support for risk-sharing and only among developed, industrial economies. They found no evidence that developing, non-industrial countries are able to share risk. The authors break relatively new ground in suggesting why this is the case for non-industrial states: One possibility is that these countries rely more on less stable capital such as bank loans and other forms of debt that may not allow for efficient risk

sharing. Indeed, we break up stocks of external assets and liabilities into different categories FDI, portfolio equity, portfolio debt, etc. we find that the underlying composition of capital flows influences the ability of developing countries to share risk. In particular, external debt appears to hinder the ability of emerging market economies to share their consumption risk. (Kose, Prasad, & Terrones, 2009. P. 259) One reason why interdependent states may not be well-suited to share risk is due to the fact that interdependence leads to economic specialization and reliance on external financing. Gande, John, and Senbet (2008) and Corsetii et al. (1999) provide conceptual and analytical links between specialization, moral hazard, and contagion. Thus, the answer to the first question set out at the beginning of this section, whether economic integration and economic crises are linked, seems reasonably well-established. Substantial recent scholarship indicates a positive association between economic interdependence and economic crises. What then about the second question? Is there a positive correlation between economic crises and armed conflict? The impacts at an individual level and on a state level are intuitive and well-documented (See, e.g.,

the instability in the global economic system contributes to social disintegration and political conflict. Social unrest, regime changes, and even civil war have directly resulted from the vagaries of economic integration. Less intuitive is how periods of economic
Richards & Gelleny, 2006). Rodrik (1997a, 197b), among others, argues that 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 behavior 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 Thompsons (1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a 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 user in a redistribution of relative power (see also Gilpin, 1981) 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). Separately, Pollins (1996) 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, Copelands (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 expectations 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 fabricate external military conflicts to create a rally around 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 Kisangani 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. In summary, recent economic scholarship positively correlates economic integration with an increase in
the frequency of economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels. This implied connection between integration, crises, and armed conflict has not featured prominently in the economic-security debate and deserves more attention.

NAFTA key to US economyfarming industry

USTR 1 (Office of the United States Trade Representative, Executive Office of the President, NAFTA Good for Farmers, Good for America, http://www.ustr.gov/about-us/press-office/factsheets/archives/2001/june/nafta-good-farmers-good-america) The North American Free Trade Agreement (NAFTA) has been part of the American economic success story of the 1990's and is an important part of Americas economic future. In particular, Americas farmers have benefitted greatly from NAFTA, because its meant more export opportunities. Since NAFTA was approved in 1993, United States agricultural exports to Mexico have nearly doubled. Mexico now imports $6.5 billion of United States agricultural products making it our third largest agricultural market. United States exports of agricultural products to Canada since implementation of NAFTA have increased 44 percent. Canada is the second largest market for United States agricultural exports, with Canadians purchasing $7.6 billion worth of American products last year. Canada and Mexico purchased over 25 percent of the United States agricultural product exported in 2000. American farmers cant afford to lose access to the NAFTA markets. Current United States Department of Agriculture projections anticipate an improvement in global agricultural demand and trade over the next several years, and United States exports are projected to rise. Over the longer term, economic growth, especially in developing countries, is projected to strengthen, providing a solid foundation for future expansion in global agricultural demand and trade. Its important to remember that United States agricultural imports benefit consumers with lower prices and expanded choices.

NAFTA key to growth of US businesses

Bravo 12 (Eduard Bravo, Writer for Houston Chronicle, NAFTA has been good for all of North America,
http://www.chron.com/opinion/outlook/article/NAFTA-has-been-good-for-all-of-North-America-4038237.php)

As a Mexican national who has been doing business in Mexico and the U.S. since 1988, who launched a publishing business in 1992, who moved from Mexico to San Antonio in 2009, and who has continued doing business in both countries, I believe that North America is better off with NAFTA than without it. The North American Free Trade Agreement united Canada, Mexico and the U.S. as a powerful trading bloc. The agreement established trade rules and regulations that provide a business-friendly environment so that the three nations can trade products and services more easily among each other by eliminating tariffs and trade barriers. Since its implementation in the early '90s, NAFTA has stimulated economic growth and sustained the economies of the three-nation region. According to the U.S. Department of Commerce, in 2011 exports grew more than 45 percent and were strongest with the U.S. NAFTA partners, Canada and Mexico. U.S. trade with Mexico increased substantially in 2011, with exports to Mexico increasing by 21.6 percent between 2010 and 2011. Despite economic turbulence, I have seen many business success stories unfold thanks to NAFTA. Corona, for example, is a Mexican beer that was introduced in the U.S. in 1981. After NAFTA was implemented, the trading process became easier and the brand's marketing efforts helped it become the No. 1 import beer in the U.S. The beer that originated in Mexico crossed borders when the brand and its parent company were acquired by Anheuser-Busch earlier this year. But beer isn't the only Mexican product that has benefited from NAFTA. In San Antonio's key grocery store chain, H.E.B, one can buy many products from my homeland because H.E.B. operates in Mexico and the U.S., thanks to NAFTA. Additionally, NAFTA has made it easier to buy American products in Mexico. I can shop at H.E.B. and other stores in Mexico and buy Procter & Gamble and other American-made products that we could not buy in Mexico before NAFTA. Before NAFTA, the taxes imposed on American products in Mexico made them unaffordable. In fact, people called "contrabandistas" would buy American products, smuggle them into Mexico, and sell

them to Mexicans at three times the American price. Thanks to NAFTA, the process of smuggling American products into Mexico is less common because NAFTA eliminated tariffs, making Americanmade products more competitively priced in Mexico. Mexico is also the second largest destination for U.S. exports and the third largest source of imports; 6 million American jobs depend on trade with Mexico. And I have seen the business landscape in Mexico become Americanized. In most of Mexico's major cities, today one will see the familiar brands of American stores and restaurants that have grown due to expansion in Mexico. Familiar brands include McDonalds, Burger King, Applebee's and Walmart, to name a few. Mary Kay is a testament to the beauty of NAFTA. In 2007, Mary Kay, one of the largest direct-selling skin care and color cosmetic companies in the world, opened a new headquarters and distribution center in the northern Mexico region. Mary Kay's $20 million investment in the two facilities reflects its commitment to the country. The new distribution center focuses on the needs of some 200,000 Mary Kay independent beauty consultants throughout Mexico. It is estimated that 75 million units will be shipped from the distribution center annually, increasing Mary Kay's business capacity by 50 percent. Caterpillar also paved its way into Mexico and Canada, and is a huge supporter of NAFTA. The chairman and CEO attributes much of the company's economic success to the benefits of free trade, and says that it is an excellent case study of how American workers can compete and win in the international marketplace. Because the company exports billions of dollars from products made in U.S. factories, many of Catepillar's U.S. employees depend on international trade for their livelihoods. That is why the company is a strong advocate for international trade and NAFTA. The company stories I mentioned are just a few examples, but there are hundreds more, and we, as Mexican nationals who are living in the U.S. and successfully operating businesses on an international level, are strong proponents for developing a NAFTA future that will generate smarter, more innovative ways to grow and sustain the economies of Canada, Mexico and the U.S.

NAFTA key to the US economy

Bravo 12 (Eduardo, Publisher at The Society Diaries
Chairman at AEM "Asociacion Empresarios Mexicanos" Publisher at Empresarios AEM President & CEO at M.M.G.COMMUNICATIONS, INC. Presidente y Director General at Suplementos Corporativos, NAFTA has taken North American trade to a higher level, December 9th issue of El Paso times- columnist section //LEXIS //NS) The agreement established trade rules and regulations that provide a business friendly environment so that the three nations can trade products and services more easily among each other by eliminating tariffs and trade barriers.

Since its implementation in the early '90s, NAFTA has stimulated economic growth and sustained the economies of the three-nation region. According to the U.S. Department of Commerce, in 2011, exports grew over 45 percent. Despite economic
turbulence, I have seen many business success stories unfold thanks to NAFTA. Corona, for example, is a Mexican beer that was introduced in the U.S. in 1981. After NAFTA was implemented, the trading process became easier and the brand's marketing efforts helped it become the number one import beer in the U.S. NAFTA has made it easier to buy American products in Mexico. I can shop at HEB and other stores in Mexico and buy Procter & Gamble and other American-made products that we could not buy in Mexico before NAFTA. When I lived in Mexico and wanted American products before NAFTA, the taxes imposed on American products made them unaffordable.

Mexico is also the second- largest destination for U.S. exports and the third-largest source of imports; 6 million American jobs depend on trade with Mexico. And I have seen the business landscape in Mexico become
Americanized. In most of Mexico's major cities, today one will see the familiar brands of American stores and restaurants that have grown due to expansion in Mexico. Familiar brands include McDonalds, Burger King, Applebee's and Walmart, to name a few. Mary Kay is a testament to the beauty of NAFTA. In 2007, Mary Kay, one of the largest direct-selling skin care and color cosmetic companies in the world, opened a new headquarters and distribution center in the Northern Mexico region. Caterpillar also paved its way to Mexico and Canada, and is a huge supporter of NAFTA. The chairman and CEO attributes much of the company's economic success to the benefits of free trade, and says that the company is an excellent case study of how American workers can compete and win in the international marketplace. Because the company exports billions of dollars of its products made in U.S. factories, many of Catepillar's U.S. employees depend on international trade for their livelihoods. That is why the company is a strong advocate for international trade and NAFTA. The company stories I mentioned are just a few examples, but there are hundreds more, and we,

as Mexican nationals who are living in the U.S. and successfully operating businesses on an international level, are strong proponents for developing a NAFTA future that will generate smarter, more innovative ways to grow and sustain the economies of Canada, Mexico and the U.S. In

the future, the Asociacicn de Empresarios Mexicanos will hold more frequent summits to continue the international dialogue on how to take NAFTA to a higher level that will benefit the entire world.

NAFTA key to the economy of all three countries

U.S. Chamber of Commerce 12 (Targeted News Service November 16, LEXIS //NS) "The bottom line is that NAFTA has supported millions of good jobs, raised standards of living, and enhanced the competitiveness of North American industry in a rapidly changing global economy," said Donohue. "NAFTA's tremendous benefits for American workers, farmers, and companies are hidden in plain sight. Today more than ever, we need the millions of jobs and the huge boost to our competitiveness that NAFTA has provided. However, the United States can't rest on its laurels. Elected officials and business leaders in Canada, Mexico, and the United States must work together to build on this foundation in the years ahead." "North America is experiencing a renaissance in energy production of epic proportions," he added. "The potential in the United States alone is tremendous. Unconventional oil and natural gas development will attract manufacturing back to the United States, boost exports, expand our tax base and revenues, and reduce our dependence on unfriendly or risky suppliers. When you add up the potential of all three countries, our energy resources are truly staggering. We must do everything in our power to seize the extraordinary energy opportunity in North America." In conjunction with Donohue's participation in the NAFTA20 Summit,
the Chamber released a new report entitled NAFTA Triumphant: Assessing Two Decades of Gains in Trade, Growth, and Jobs.

Any attempt to reform NAFTA will resort in econ collapse turning the advantage
NAFTA negatively impacted US capital formation and labor
Wise and Cypher 2007Dr. Ral Delgado Wise is president of the International Network on Migration and Development; UNESCO Chair on Migration, Development and Human Rights; and Professor of the Doctoral Programme in Development Studies at the Autonomous University of Zacatecas, Mexico. Dr. James M. Cypher received his Ph.D. degree in economics from the University of California, Riverside in 1973. His B.A. and M.A. degrees were awarded by University of California, Santa Barbara. His early research interests were focused on the macroeconomic impacts of US military spending, and he has published numerous articles in this area. Since the late 1980s he has concentrated on the Mexican Economy and issues of internationalization and economic development of poor nations. His book, State and Capital in Mexico (Westview, 1990) was published in Mexico by Siglo XXI publishers. He has taught or worked at several universities in Latin America, and is currently engaged in a large project to assess the pattern of industrialization in Chile. The senior member of the Departments faculty, Dr. Cypher has devoted his career to undergraduate teaching for over three decades. With James Dietz he co-authored a text, The Process of Economic Development (Routledge) the second edition of which will appear in 2003. *The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current Economic Integration. Annals of the American Academy of Political and Social Science , Vol. 610, NAFTA and Beyond: Alternative Perspectives in the Study of Global Trade and Development (Mar., 2007), pp. 120142]//MM NAFTA and the general neoliberal restructuring of the Mexican economy that began in the 1980s have had a profound impact on the U.S. production system. Notable in this process has been the shifting of U.S. investment into Mexico. Without the neoliberal restructuring process in Mexico, such investments would have been directedin most instancesto the United States, creating jobs, raising the skill level, enhancing productivity, and producing spread effects via forward and backward linkages, along with stimulating aggregate demand through the consumer spending of workers.14 Increasing capital mobility has undermined the rate of capital formation in the United States. A countertendency was created through the increasing portion of the Mexican economic surplus that was displaced to the United States as profits rose from the Mexican operations of U.S. transnationals. This countertendency was reinforced as Mexican immigrants flowed into the United States and into industrial sectors, lowering production costs and raising profits. Thus, the impact of capital shifting to Mexico fell on the U.S. labor force, particularly organized labor, while the U.S. restructuring process created two significant avenues to increased profits, with these benefits flowing to a small percentage of owners and managers and stockholders located in manufacturing and finance. At the same time, the U.S. economy receives a certain type of stimulus from Mexican emigration to the degree that new investments occurderivative of substantially different consumption patterns arising from the 7 million Mexican emigrant workers and their dependents. This is to be noted in the so-called migration industry (Guarnizo 2003). Shifting capital to Mexico destroyed jobs in the United States, as did the size able trade deficit the United States developed with Mexico once the NAFTA agreement had been consummated. Bringing more of Mexico's economic surplus back to the United States stimulated the economy, and the influx of millions of Mexican emigrants helped push down labors' share of national income. The net effect was to create a new social structure of accumulation; a leaner and meaner social environment for all workers, emigrant or not; and a corpulent, more contented, business elite in the United States now better positioned to meet foreign competitors either by locating production in the United States or in Mexico, as profit maximization strategies indicated. The resulting macroeconomic relationships, however, did not

determine the repositioning of U.S. capital in Mexico. Viewing the matter from the standpoint of the restructuring of the U.S. production system, a separate logicdriven by the desire to maximize profits and out-perform the competitionprevailed. Under this logic, shifting capital to Mexico could enable U.S. firms to purchase labor processes at as low as 9 percent of the cost in the United States while accepting that productivity per hour might not be as high as that in the United States.15 At the microeconomic level of the firmassuming the stability of final demand for products exported from Mexico to the United Statesshifting capital to Mexico to achieve labor efficiencies was a logical step in many instances. In highly oligopolized industries, such as autos, the available research indicates that the cost-saving production processes adopted in Mexico were taken as profits (Cypher 2001). In less capitalintensive industries, such as apparel, where brand identity is strong, similar profit-enhancing results should be anticipated. Shifting production to Mexico made credible the threat of further production transfers, thereby weakening all U.S. labor and particularly organized labor. The stagnation in U.S. production workers' pay is broadly consistent with the increasing tendency of U.S. corporations to move their production operations to Mexico. Thus, in the process of restructuring the U.S. production systema perceived necessity during the course of the 1980sa complex, mutually reinforcing, triple movement began: (1) significant elements of U.S. capital shifted to Mexico, thereby lowering costs of production; (2) while capital often threatened to move to Mexico, thereby strengthening its bargaining power over labor, either reducing wage increases or lowering wages; and (3) growing numbers of workers were displaced by the production movement to Mexico thereby reducing the portion of the labor force in unions and thus reducing the impact of unionized labor that tends to push up wages for all (but near minimum-wage) workers.

Economic decline breaks down cooperation and leads to war heg decline, falling trade, rising protectionism, and diversionary tactics.
Royal 10 Director of Cooperative Threat Reduction Policy, US-Department of Defense, policy advisor (Jedidiah, Economics of War and Peace: Economic, Legal, and Political Perspectives, pg. 212-214; Print.)//Beddow The counterargument to contagion is the risk-sharing argument. It suggests that while trade and financial linkages may spread a crisis, this creates a cushioning effect that, overall, minimizes the effects on any individual state. In other words, interdependence creates shock-absorbing linkages that soften a states vulnerability to dramatic economic downturns (see, e.g., Kelemli-Ozcan, Sorensen, & Yosha, 2003). Gallegati, Greenwald, Richiardi, and Stiglitz (2008) have made a convincing observation that would appear to clarify this debate. They have provided statistical modeling indicating that risk-sharing and contagion are in fact two sides of the same coin. When economic times are good, inter-linkages provide mechanisms for the diffusion of individual agents that face a liquidity crisis. A leader can request a creditor defer payment, whereas a creditor can then transfer this cost on to other agents. As such the system would absorb the crisis. When liquidity is relatively more scarce during down times, a sufficiently large negative shock will use those very same inter-linkages to transmit that shock to other agents in the system. As a result, risk sharing is beneficial only when the overall economic environment is favourable, while in harsh times it might be better to stay alone *linkage during market downturns] becomes socially detrimental; not only is it that the expected number of defaults is higher when the economic agents are connected, but defaults
become a systemic failure (Gallegati et al., 2008. Pp.5. 16). Kose, Prasad, and Terrones (2009) considered the same question and found only mild support for risk-sharing and only among developed, industrial economies. They found no evidence that developing, non-industrial countries are able to share risk. The authors break relatively new ground in suggesting why this is the case for non-industrial states: One possibility is that these countries rely more on less stable capital such as bank loans and other forms of debt that may not allow for efficient risk sharing. Indeed, we break up stocks of external assets and liabilities into different categories FDI, portfolio equity, portfolio debt, etc. we find that the underlying composition of capital flows influences the ability of developing countries to share risk. In particular, external debt appears to hinder the ability of emerging market economies to share their consumption risk. (Kose, Prasad, & Terrones, 2009. P. 259) One reason why interdependent states may not be well-suited to share risk is due to the fact that interdependence leads to economic specialization and reliance on external financing. Gande, John, and Senbet (2008) and Corsetii et al. (1999) provide conceptual and analytical links between

specialization, moral hazard, and contagion. Thus, the answer to the first question set out at the beginning of this section, whether economic integration and economic crises are linked, seems reasonably well-established. Substantial recent scholarship indicates a positive association between economic interdependence and economic crises. What then about the second question? Is there a positive correlation between economic crises and armed conflict? The impacts at an individual level and on a state level are intuitive and well-documented (See, e.g.,

the instability in the global economic system contributes to social disintegration and political conflict. Social unrest, regime changes, and even civil war have directly resulted from the vagaries of economic integration. Less intuitive is how periods of economic
Richards & Gelleny, 2006). Rodrik (1997a, 197b), among others, argues that 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 behavior 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 Thompsons (1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a 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 user in a redistribution of relative power (see also Gilpin, 1981) 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). Separately, Pollins (1996) 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, Copelands (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 expectations 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 fabricate external military conflicts to create a rally around 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 Kisangani 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. In summary, recent economic scholarship positively correlates economic integration with an increase in
the frequency of economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels. This implied connection between integration, crises, and armed conflict has not featured prominently in the economic-security debate and deserves more attention.

NAFTA increased Mexican tax audits on US companies

PR Newswire 6/13 (PR Newswire, Public corporations in the United States, United Kingdom, Canada, and other nations, use PR
Newswire to reach the investment and financial news community with important announcements, thus achieving the standard of "simultaneous disclosure" required by financial markets and regulatory agencies, U.S. NAFTA Exporters Beware: No End in Sight for Taxing Mexico Audits; U.S. exporters face growing number of North America Free Trade Agreement (NAFTA) audits by Mexicos tax collecting agency, 13 June 2013, http://www.lexisnexis.com.proxy.lib.umich.edu/hottopics/lnacademic/)

Frustration levels are rising among U.S.exportersas the number of North America Free Trade Agreement (NAFTA) audits by Mexico's tax collecting agency-the Servicio de Administracion Tributaria (SAT)continue to grow. Despite the current administration's promises that it would change course from its predecessor by streamlining audit procedures, global traders are still facing costly and time-consuming NAFTA audits and re-audits as they attempt to interpret mixed messages from the Mexican government. "Mexico's SAT, recently underwent a reorganization and everyone was hoping that the NAFTA audit process would be less time-consuming and costly," explains customs and trade attorney Elise Shibles, a partner with Sandler, Travis & Rosenberg, P.A. "Unfortunately, that doesn't seem to be the case, especially for companies in the textile and apparel trade" she says. "NAFTA rules of origin in this industry are very complex and require review of multiple levels of processing, which usually occurs at different companies. It's hard enough having to go through a NAFTA verification audit once, but being subjected to re-auditing when you've already passed with flying colors seems unduly harsh on business." The SAT's policy inconsistencies are also tying many U.S. and Mexican companies up into knots, says trade expert Jorge Morales, Managing Director of STTAS de Mexico Servicios de Comercio Exterior, the Mexico City arm of leading global trade services provider Sandler & Travis Trade Advisory Services, Inc. "Despite the fact that SAT is telling us that Mexican importers can submit NAFTA documentation on behalf of U.S. exporters, only a small number of Mexican importers know about this important benefit because SAT is handling this issue only as an internal regulation that hasn't been properly disseminated among all involved companies. The lack of uniformity is confusing for our clients," he continues. "Without clear guidance there is no way a company can maintain compliance. You have to know what the rules are before you can be expected to follow them."

NAFTA hurt the US economyJobs Strachan 11Staff Writer for The Huffington Post (U.S. Economy Lost Nearly 700,000 Jobs Because Of NAFTA, EPI Says, July 12, 2011,
http://www.huffingtonpost.com/2011/05/12/nafta-job-loss-trade-deficit-epi_n_859983.html)//RT

When the North American Free Trade Agreement was first signed in 1994, proponents said it would eventually create jobs for the U.S. economy. 17 years later, a new report estimates, the American worker only has hundreds of thousands of job losses to show for it. According to a report by Economic Policy Institute
economist Robert Scott, entitled "Heading South: U.S.-Mexico trade and job displacement after NAFTA," an estimated 682,900 U.S. jobs have been "lost or displaced" because of the agreement and the resulting trade deficit. The

historic agreement, signed just three years after the collapse of the Soviet Union, tore down trade barriers between the U.S., Canada and Mexico, making trade and investment easier for businesses without allowing for the cross-border movement of labor. Despite the agreement being considered a boon for Mexico, the country's economy grew only 1.6 percent per capita on average between 1992 and 2007, The New York Times reported in 2009. The EPI's calculation of 682,900 jobs lost to NAFTA takes into account jobs created as a result, too. Last year, for example, U.S. exports to Mexico supported 791,900 jobs. It's just that those jobs created pale in comparison to the 1.47 million U.S. jobs that would be necessary without the imports resulting from NAFTA, the report found. Still, the number of jobs lost to NAFTA looks minimal when placed against the havoc freaked by the financial crisis. Only in 2008, at the height of the crisis, the U.S. economy hemorrhaged 2.6 million jobs, according to CNNMoney. The U.S. is currently considering a similar trade

agreement with South Korea, called U.S.-Korea Free Trade Agreement (KORUS FTA). KORUS, like NAFTA, could similarly displace American jobs, EPI warns. Perhaps the most drastic switch post-NAFTA has been in the two country's trade deficit. In 1993, before the signing of NAFTA, the U.S. held a $1.6 billion trade surplus over their neighbor to the south, which supported 29,400 jobs. By 1997, the tides had turned, and Mexico laid claim to a much larger surplus of $16.6 billion. As of 2010, it's not even close. Mexico's trade surplus now hovers around $97.2 billion. Jobs continue to be lost to NAFTA today. In the years 2007-2010, the U.S. economy has lost 116,400 as a result of the trade deficit created by NAFTA. And last year,
the growth of Mexican auto exports to the United States alone created more Mexican jobs -- 30,400 -- than the entire U.S. auto industry. It's the U.S. manufacturing sector that has suffered most mightily from NAFTA, alone accounting for 60.8 percent -- 415,000 total -- of the jobs lost to the agreement. Specifically, those making computer of electronic parts have accounted for 22 percent of all job losses, and motor vehicle and parts workers accounted for 15 percent of job losses. Job losses haven't been limited to certain geographic regions, either, as all fifty states have lost jobs as a result. And while the states with the largest total number of job losses, California and Texas, do hug the southern border,

it's actually manufacturing-heavy states to the north, such as Michigan, Indiana and Kentucky, that have lost the largest share of jobs to Mexico.

Kills export growth and costs millions of jobs

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Services and manufacturing export growth slows under NAFTA. A key claim of supporters of NAFTA-style trade pacts is that they create jobs by promoting faster U.S. export growth. By contrast, growth of U.S. exports to countries that are not Free Trade Agreement (FTA) partners has exceeded U.S. export growth to countries that are FTA partners by 38 percent over the last decade.14 Manufacturing and services exports in particular grew slower after NAFTA took effect. Since NAFTAs enactment, U.S. manufacturing exports to Canada and Mexico have grown at less than half the rate seen in the years before NAFTA.15 Even growth in services exports, which were supposed to do especially well under the trade pact given a presumed U.S. comparative advantage in services, dropped precipitously after NAFTAs implementation. During NAFTAs first decade, the average growth rate in U.S. services exports fell by 58 percent compared to the decade before NAFTA, and has remained well below the pre- NAFTA rate through the present.16 One million American jobs lost to NAFTA. The Economic Policy Institute estimates that the rising trade deficit with Mexico and Canada since NAFTA went into effect eliminated about one million net jobs in the United States by 2004.17 EPI further calculates that the ballooning trade deficit with Mexico alone destroyed about seven hundred thousand net U.S. jobs between NAFTAs implementation and 2010.18 Moreover, official government data reveals that nearly five million U.S. manufacturing jobs have been lost overall since NAFTA took effect.19 Obviously, not all of these lost U.S. manufacturing jobs one out of every four of our manufacturing jobs is due to NAFTA. The United States entered the World Trade Organization (WTO) in 1995, China joined WTO in 2000 and the U.S. trade deficit with China soared thereafter. However, at the same time, given the methodology employed, it is also likely that the EPI estimates do not capture the full U.S. job loss associated with NAFTA. Service sector jobs have also been negatively impacted by NAFTA, as closed factories no longer demand services. EPI estimates that one third of the jobs lost due to the rising trade deficit under NAFTA were in nonmanufacturing sectors of the economy.20

NAFTA hurts US imports from Mexico kill jobs

Scott 3 (Robert E. Scott, PhD in Economics form the University of California at Berkeley and BS in Engineering from Washington University at St. Louis, The high price of free trade: NAFTAs failure has cost the United States jobs across the nation, 17 November 2003, http://www.epi.org/publication/briefingpapers_bp147/, AL)

Proponents of new trade agreements that build on NAFTA, such as the proposed Free Trade Agreement of the Americas (FTAA), have frequently claimed that such deals create jobs and raise incomes in the United States. When the Senate recently approved President Bushs request for fast-track trade negotiating authority1 for an FTAA, Bush called the bills passage a historic moment that would lead to the creation of more jobs and more sales of U.S. products abroad. Two weeks later at his economic forum in Texas, the president argued, (i)t is essential that we move aggressively [to negotiate new trade pacts+, because trade means jobs. More trade means higher incomes for American workers. The problem with these statements is that they misrepresent the real effects of trade on the U.S. economy: trade both creates and destroys jobs. Increases in U.S. exports tend to create jobs in this country, but increases in imports tend to reduce jobs because the imports displace goods that otherwise would have been made in the United States by domestic workers. President Bushs statementsand similar remarks from others in his administration and from members of both major parties in Congressare based only on the positive effects of exports, ignoring the negative effects of imports. Such arguments are an attempt to hide the costs of new trade deals, in order to boost the reported benefits. These are effectively the same tactics that led to the bankruptcies of Enron, WorldCom, and several other major corporations. The impact on employment of any change in trade is determined by its effect on the trade balance, the difference between exports and imports. Ignoring imports and counting only exports is like balancing a checkbook by counting only deposits but not withdrawals. The many officials, policy analysts, and business leaders who ignore the negative effects of imports and talk only about the benefits of exports are engaging in false accounting. NAFTA supporters frequently tout the benefits of exports while remaining silent on the effects of rapid import growth (Scott 2000). Former President George H.W. Bush, whose administration negotiated NAFTA, recently claimed that two million NAFTArelated jobs have been created in the United States since 1993 (Bush 2002). But any evaluation of the impact of trade on the domestic economy must include the impact of both imports and exports. If the United States exports 1,000 cars to Mexico, many American workers are employed in their production. If, however, the United States imports 1,000 cars from Mexico rather than building them domestically, then a similar number of Americans who would have otherwise been employed in the auto industry will have to find other work. Another critically important promise made by the promoters of NAFTA was that the United States would benefit because of increased exports to a large and growing consumer market in Mexico. This market, in turn, was to be based on an expansion of the middle class that, it was claimed, would grow rapidly due to the wealth created in Mexico by NAFTA. Thus, most U.S. exports were predicted to be consumer products destined for consumption in Mexico. In fact, most U.S. exports to Mexico are parts and components that are shipped to Mexico and assembled into final products that are then returned to the United States. The number of products that Mexico assembles and exportssuch as refrigerators, TVs, automobiles, and computershas mushroomed under the NAFTA agreement. Many of these products are produced in the Maquiladora export processing zones in Mexico, where parts enter duty free and are re-exported to the United States in assembled products, with duties paid only on the value added in Mexico. The share of total U.S. exports to Mexico that is represented by Maquiladora imports has risen from 39% of U.S. exports in 1993 to 61% in 2002.2 The number of such plants increased from 2,114 in 1993 to 3,251 in 2002 (INEGI 2003a, 2003b).

NAFTA hurts jobs and increases trade deficits

Scott 3 (Robert E. Scott, PhD in Economics form the University of California at Berkeley and BS in Engineering from Washington University at St. Louis, The high price of free trade: NAFTAs failure has cost the United States jobs across the nation, 17 November 2003, http://www.epi.org/publication/briefingpapers_bp147/, AL)

NAFTAs impact in the United States, however, has been often obscured by the boom-and-bust cycle that drove domestic consumption, investment, and speculation in the mid- and late 1990s. Between 1994 (when NAFTA was implemented) and 2000, total employment rose rapidly in the United States, causing overall unemployment to fall to record low levels. But unemployment began to rise early in 2001, and 2.4 million jobs were lost in the domestic economy between March 2001 and October 2003 (BLS 2003). These job losses have been primarily concentrated in the manufacturing sector, which has experienced a total decline of 2.4 million jobs since March 2001. As job growth has dried up in the economy, the underlying problems caused by U.S. trade deficits have become much more apparent, especially in manufacturing. The United States has experienced steadily growing global trade deficits for nearly three decades, and these deficits accelerated rapidly after NAFTA took effect on January 1, 1994. For the purposes of this report it is necessary to distinguish between exports produced domestically and foreign exports, which are goods produced in other countries but exported to the United States, and then re-exported from the United States. Foreign exports made up 11.6% of total U.S. exports to Mexico and Canada in 2002. However, because only domestically produced exports generate jobs in the United States, our trade calculations are based only on domestic exports. Our measure of the net impact of trade, which is used here to calculate the employment content of trade, is the difference between domestic exports and total imports.3 We refer to this as net exports, to distinguish it from the more commonly reported gross trade balance. However, both concepts are measures of net trade flows. Although U.S. domestic exports to its NAFTA partners have increased dramaticallywith real growth of 95.2% to Mexico and 41% to Canadagrowth in imports of 195.3% from Mexico and 61.1% from Canada overwhelmingly surpass export growth, as shown in Table 1. The resulting $30 billion U.S. net export deficit with these countries in 1993 increased by 281% to $85 billion in 2002 (all figures in inflation-adjusted 2002 dollars). As a result, NAFTA has led to job losses in all 50 states and the District of Columbia, as shown in Figure 1. Through September 2003, the U.S. goods trade deficit with Mexico and Canada has increased 12% over the same period last year (U.S. Census Bureau 2003a). Job losses for the remainder of 2003 are likely to grow at a similar rate.

Number of workers hurt by NAFTA far outweighs the tiny percent that benefitted
Scott 3 (Robert E. Scott, PhD in Economics form the University of California at Berkeley and BS in Engineering from Washington University at St. Louis, The high price of free trade: NAFTAs failure has cost the United States jobs across the nation, 17 November 2003, http://www.epi.org/publication/briefingpapers_bp147/, AL) NAFTA has also contributed to growing income inequality and to the declining relative wages of U.S. workers without college degree, who made up 72.1% of the workforce in 2001 (Mishel et al. 2003, 163). NAFTA, however, is but one contributor to a larger process of globalization and growing structural trade deficits that has shaped the U.S. economy and society over the last few decades.6 Rapid growth in U.S. trade and foreign investment as a share of U.S. gross domestic product (GDP) has played a large role in the growth of inequality in income distribution in the last 20 years. NAFTA has continued and accelerated international economic integration, and thus contributed to the growing tradeoffs that have accompanied this integration process. The growth in U.S. trade and trade deficits has put downward pressure on the wages of workers without a college degree, especially those who have no formal education beyond a high school degree. This group includes most middle- and low-wage workers, including the 68.5% of the total workforce with the lowest pay, those earning a wage that is e qual to 200% or less of poverty level wages in 2001 (Mishel et al. 2003, p. 134). In March 2000, the base year used for data, these workers earned wages of $16.93 or less per hour (See Appendix 1). These U.S. workers bear the brunt of the costs and pressures of globalization (Mishel et al. 2003, 181-89). A large

and growing body of research has demonstrated that expanding trade has reduced the price of importcompeting products and put downward pressure on the real wages of workers engaged in producing those goods. Trade, however, is also expected to increase the wages of the workers producing exports, but growing trade deficits have meant that the number of workers hurt by imports has exceeded the number who have benefited through increased exports. Because the United States tends to import goods that make intensive use of skills of less-educated workers in production, it is not surprising to find that the increasing openness of the U.S. economy to trade has reduced the wages of less-educated workers relative to other workers in the United States.7

Kills jobs and lowers wages

Scott 3 (Robert E. Scott, PhD in Economics form the University of California at Berkeley and BS in Engineering from Washington University at St. Louis, The high price of free trade: NAFTAs failure has cost the United States jobs across the nation, 17 November 2003, http://www.epi.org/publication/briefingpapers_bp147/, AL) Globalization has put downward pressure on the wages of less-educated workers for three primary reasons. First, the steady growth in U.S. trade deficits over the past two decades has eliminated millions of manufacturing jobs and job opportunities in this country. Most displaced workers find jobs in other sectors where wages are much lower, which in turn leads to lower average wages for all U.S. workers. Recent surveys have shown that, even when displaced workers are able to find new jobs in the United States, they face a reduction in wages, with earnings declining by an average of over 13% (Mishel et al. 2001, 24). These displaced workers new jobs are likely to be in the service industry, the source of 98% of net new jobs created in the United States between 1989 and 2000, and a sector in which average compensation is only 81% of the manufacturing sectors average (Mishel et al. 2003, 177). This competition also extends to export sectors, where pressures to cut product prices are often intense. Second, the effects of growing U.S. trade and trade deficits on wages goes beyond just those workers exposed directly to foreign competition. As the trade deficit limits jobs in the manufacturing sector, the new supply of workers to the service sector (from displaced workers plus young workers not able to find manufacturing jobs) depresses the wages of those already holding service jobs. The growth in import competition and capital mobility under NAFTA has also contributed to stagnant and falling wages in the United States (Bronfenbrenner 1997a). Finally, threat effects arise when firms threaten to close plants and move them abroad while bargaining with workers over wages and working conditions. Employers credible threats to relocate plants, outsource portions of their operations, and purchase intermediate goods and services directly from foreign producers can have a substantial impact on workers bargaining positions. The use of these kinds of threats is widespread. A Wall Street Journal survey in 1992 reported that one-fourth of almost 500 American corporate executives polled admitted that they were very likely or somewhat likely to use NAFTA as a bargaining chip to hold down wages (Tonelson 2000, 47). In a unique study of union organizing drives in 1993 though 1995, it was found that more than 50% of all employers made threats to close all or part of their plants during organizing drives (Bronfenbrenner 1997b). This study also found that plant closing threats in National Labor Relations Board (NLRB) union certification elections nearly doubled following the implementation of NAFTA, and that threat rates were substantially higher in mobile industries, where employers can credibly threaten to shut down or move their operations in response to union activity.

Hurts jobs more than anything else

Scott 3 (Robert E. Scott, PhD in Economics form the University of California at Berkeley and BS in Engineering from Washington University at St. Louis, The high price of free trade: NAFTAs failure has cost the United States jobs across the nation, 17 November 2003, http://www.epi.org/publication/briefingpapers_bp147/, AL) The U.S. economy created 21 million jobs between 1992 and March 2001 (Bureau of Labor Statistics 2003c). All of those gains are explained by growth in domestic consumption, investment, and government spending. The growth in the overall U.S. trade deficit eliminated production supported by three million jobs in the same period (Scott 2001). Thus, NAFTA and other sources of growing trade deficits were responsible for a change in the composition of employment, shifting workers from manufacturing to other sectors and, frequently, from good jobs to low-quality, low-pay work. Since the onset of recession in early 2001, trade-displaced workers have been especially hard hit. Workers have experienced longer unemployment spells, and they have found it much more difficult to get new jobs. Many have concluded that their jobs in manufacturing will never come back. The growth of the trade deficit since early 2001 has contributed to an absolute decline of jobs, not just a shift in jobs from manufacturing to other sectors. When trying to identify the causes behind trends such as the disappearance of manufacturing jobs, the rise in income inequality, and the decline in wages in the United States, NAFTA and growing trade deficits only provide part of the picture. Other major contributors include deregulation and privatization, declining rates of unionization, sustained high levels of unemployment, and technological change. While each of these factors has played some role, a large body of economic research has concluded that trade is responsible for at least 15% to 25% of the growth in wage inequality in the United States (U.S. Trade Deficit Review Commission 2000, 110-18). In addition, trade also has indirect effects on wage inequality by contributing to many of these other causes. For example, the decline of the manufacturing sector attributable to increased globaliza tion has resulted in a reduction in unionization rates, since unions represent a larger share of the workforce in this sector than in other sectors of the economy. Although NAFTA is not responsible for all U.S. labor market problems, it has made a significant contribution to the state of the U.S. economy, both directly and indirectly. Without major changes in NAFTA to address unequal levels of development and enforcement of labor rights and environmental standards, continued integration of North American markets will threaten the prosperity of a growing share of the U.S. workforce. Expansion of a NAFTA-style agreement, such as the proposed Free Trade Agreement of the Americas, will only worsen these problems. Past experience suggests that workers have good reasons to be concerned as NAFTA enters its second decade.

NAFTA kills jobs

Joseph 11 (Joel D. Joseph, Founder/Chairman of the Made in the USA Foundation, Trade Insanity, PR Newswire December 30, LEXIS
//NS)

Every trade agreement that we have entered into in the past forty years has led to a destruction of American jobs. The North American Free Trade Agreement, the largest free trade agreement that we have signed, caused nearly two million jobs to shift from the United States to Mexico. Even Hillary Clinton, whose husband signed NAFTA into law, admitted during the 2008 Democratic presidential debates that NAFTA was a failure. Before NAFTA, in 1992, we had a $5 billion trade surplus with Mexico. That same year we had an $8 billion trade deficit with Canada. Before NAFTA trade with both nations was fairly equal. After NAFTA our trade deficit with Canada ballooned to $80 billion a year. Similarly, trade with Mexico exploded to a trade deficit of $75
billion. The Great Recession has brought those numbers down a bit: according to the U.S. Census Bureau, our trade deficit with Canada was "only" $28 billion in 2010 and $66 billion with Mexico, a staggering $94 billion deficit with our NAFTA partners.

Based on the

standard that each $1 billion of deficit costs 20,000 jobs, we have lost 1.88 million jobs because we entered into the North American Free Trade Agreement. Mexico is not too happy about NAFTA either.
Victor Suarez, a representative for the Democratic Revolutionary Party, or PRD, is in the Mexican House of Representatives. Suarez said, "With

NAFTA we had promises of economic prosperity, and now we have the facts," Suarez told United Press International. He emphasized that "NAFTA was a failure for the farmers and it failed to slow down the migration that was already under way." Richard Nixon opened the door to trade with China in 1972. Before 1972 we had
virtually no trade with that communist nation. Now we have a massive trade deficit with China that has cost us more jobs than NAFTA trade expansion has cost the United States. Free trade with China and Vietnam didn't create jobs in the United States. Trade with both of those Asian nations has been a one-way street to unemployment in the United States. Our trade surplus last year was $11 billion with Vietnam, and a staggering $273 billion with China. Is our trade policy insane? AFL-CIO President Richard Trumka said in a recent speech in Washington, D.C. that the Korean, Columbia and Panamanian agreements would destroy 159,000 jobs by encouraging companies to send work overseas. While these job losses pale by comparison to our job losses with Mexico and China, the new

trade agreements will not create jobs in the United States. These trade agreements have led to the vast disparity between rich and poor in the United States. Trade agreements have undermined our middle class, those working in factories, while making the rich who control international trade richer and richer. They have done the same to Mexico, driving poor farmers out of business and into the United States. Do we ever learn from our mistakes? We should get
tough with China. China has stolen our intellectual property. China manipulates its currency to favor exports over imports. We need to renegotiate NAFTA. And we need to get out of these new trade agreements before they steal more American jobs.

NAFTA trade deficits hurt job growth in the US and Mexico

Scott 11 Law Professor at Columbia Law School (Robert E, Heading South: U.S.-Mexico Trade And Job Displacement After NAFTA, EPI Briefing Paper, Economic Policy Institute, 5/3/11, Google Scholar)//ER The United States had a small $1.6 billion trade surplus with Mexico in 1993, the year before NAFTA took effect. By 1997, the United States had developed a $16.6 billion trade deficit with Mexico, which increased to $97.2 billion in 2010, as shown in Table 1. Between 1997 and 2010, the U.S. trade deficit with Mexico increased $6.2 billion per year, or 14.6% per year. This paper estimates the impact of that change in trade on employment by calculating the labor content of changes in the trade balancethe difference between exports and imports. For example, each $1 billion in U.S. auto parts exported to Mexico supports U.S. jobs, but each $1 billion in autos and trucks imported from Mexico displaces the workers who would have been making them in the United States. On balance, the net employment effect of trade flows is determined by changes in the trade balance. Growing trade deficits usually result in job displacement. The employment impacts of trade deficits are assessed using an input-output model that estimates the direct and indirect labor requirements of producing output in a given domestic industry. The model includes 202 U.S. industries, 84 of which are in the manufacturing sector.9 The model estimates the amount of labor (number of jobs) required to produce a given volume of exports and the labor displaced when a given volume of imports is substituted for domestic output. The net of these two numbers is the estimated number of jobs displaced by changes in the trade balance, holding all else equal. U.S. exports to Mexico in 2010 supported 791,900 jobs, but U.S. imports displaced production that would have supported 1,474,800 jobs, as shown in the bottom half of Table 1. Therefore, the $97.2 billion U.S. trade deficit with Mexico in 2010 displaced 682,900 jobs.10 Since the United States had a small trade surplus in 1993 (not shown), all of those jobs were displaced between 1993 and 2010.11 On average, 40,200 jobs have been lost or displaced per year since NAFTA took effect.12 U.S. jobs displaced by the trade deficit with Mexico are a net drain on employment in trade-related industries, especially those in the manufacturing sector. Even if increased demand in other sectors absorbs all the workers displaced by trade (an unlikely event), job quality is likely to suffer, as many non-trade-related industries, such as retail and home health care, pay lower wages and have less comprehensive benefits than trade-related industries.

NAFTA costs skilled labor in the US kills the economy

Sullivan 11 American Correspondent, graduate from Santa Clara University (Bartholomew, Study says NAFTA free-trade pacts cost jobs, McClatchy - Tribune Business News, 5/15/11, ProQuest)//ER But a report by the Economic Policy Institute earlier this month analyzed the terms of the agreement and concluded it would lead to displacing 159,000 American jobs in its first seven years. The same report, "Heading South: U.S.-Mexico Trade and job displacement after NAFTA," makes the case that the free-trade agreement with Mexico and Canada that went into effect in 1994 has cost 682,900 American jobs, three-fifths of them in the manufacturing sector. In the three states of the Mid-South, while some jobs were created from increased exports, far more were lost when manufacturing production lines left the region as tariff barriers fell. Tennessee, which picked up 18,600 export-related jobs from 1994 to 2010, lost 35,100, for a net job loss of 16,400. In Arkansas and Mississippi, the net job losses were 5,800 and 5,300, respectively. The five congressional districts of the Greater Memphis area lost 7,500 jobs in that period, the report indicates. Tennessee's 9th District, which includes Memphis, lost 1,000 jobs. Tennessee's 8th, which includes Millington, Covington, and Jackson, lost 1,400. Tennessee's 7th, which includes parts of Germantown, Collierville and Bartlett, lost 1,900. Mississippi's 1st, which includes DeSoto and Marshall counties, lost 1,700, and Arkansas' 1st, which includes Crittenden County, Blytheville and Jonesboro, lost 1,500, it found. As the report says, "Trade both creates and destroys jobs. While exports tend to support domestic employment, imports lead to job displacement: As imports are substituted for domestically produced goods, production that supports domestic jobs falls, displacing existing jobs and preventing new job creation..." "Like NAFTA, the (Korean Free Trade Agreement) will likely result in growing trade deficits and hence U.S. job displacement, not economywide growth," it says. The EPI, since 1986 a leading nonprofit think tank that analyzes the impact of economic policy on the middle- and lower classes, predicts in the 32-page report that domestic jobs in the motor vehicle and auto parts and computer and electronic parts industries, in particular, would be hardest hit if the Korean agreement goes through. Those are the same industries negatively affected by bilateral free trade agreements, it said. Opponents of NAFTA as it worked its way through Congress in the early 1990s predicted job losses and a race to the bottom as good-paying jobs went to export assembly plants, known as maquiladoras, across the border in Mexico. International Brotherhood of Teamsters president James P. Hoffa said in response to an inquiry by The Commercial Appeal last week that "EPI's findings come as no surprise to our membership. "We have said from the beginning that NAFTA was a job killer. We shouldn't be sending American jobs with good American benefits to countries with cheap labor and no benefits. That is not fair trade," Hoffa said.

NAFTA causes trade deficits and job losses

Sullivan 11 American Correspondent, graduate from Santa Clara University (Bartholomew, Study says NAFTA free-trade pacts cost jobs, McClatchy - Tribune Business News, 5/15/11, ProQuest)//ER The U.S. Trade Representative's website indicates the U.S. has been running a trade deficit with Mexico and Canada amounting to $41 billion in 2009 and $95 billion last year. The EPI report says that the North American Free Trade Agreement made it attractive to companies all over the world to invest in Mexico to get duty-free access to the U.S. market. Foreign direct investment in Mexico tripled after the agreement was signed. Tennessee tied with New Hampshire, Kentucky and Ohio for third place in the percentage of jobs lost because of the free-trade agreement, the report indicates. Only Michigan and Indiana, which saw the automobile industry decimated, fared worse as a percentage of their overall labor forces. Another effect of NAFTA has been that wages have not kept pace with labor productivity,

resulting in rising income inequality, and putting more pressure on the American manufacturing base, according to Edward Alden, a senior fellow at the Council on Foreign Relations.

Kills US jobs
Strachan 11 (Maxwell Strachan, Maxwell Strachan is the Business Editor at The Huffington Post. He has previously worked at Salon.com, the Center for Governmental Studies, and PBS-affiliate KCET.org, U.S. Economy Lost Nearly 700,000 Jobs Because of NAFTA, EPI Says, 12 July 2011, http://www.huffingtonpost.com/2011/05/12/nafta-job-loss-trade-deficit-epi_n_859983.html, AL) The historic agreement, signed just three years after the collapse of the Soviet Union, tore down trade barriers between the U.S., Canada and Mexico, making trade and investment easier for businesses without allowing for the cross-border movement of labor. Despite the agreement being considered a boon for Mexico, the country's economy grew only 1.6 percent per capita on average between 1992 and 2007, The New York Times reported in 2009. The EPI's calculation of 682,900 jobs lost to NAFTA takes into account jobs created as a result, too. Last year, for example, U.S. exports to Mexico supported 791,900 jobs. It's just that those jobs created pale in comparison to the 1.47 million U.S. jobs that would be necessary without the imports resulting from NAFTA, the report found. Still, the number of jobs lost to NAFTA looks minimal when placed against the havoc freaked by the financial crisis. Only in 2008, at the height of the crisis, the U.S. economy hemorrhaged 2.6 million jobs, according to CNNMoney. The U.S. is currently considering a similar trade agreement with South Korea, called U.S.-Korea Free Trade Agreement (KORUS FTA). KORUS, like NAFTA, could similarly displace American jobs, EPI warns. Perhaps the most drastic switch post-NAFTA has been in the two country's trade deficit. In 1993, before the signing of NAFTA, the U.S. held a $1.6 billion trade surplus over their neighbor to the south, which supported 29,400 jobs. By 1997, the tides had turned, and Mexico laid claim to a much larger surplus of $16.6 billion. As of 2010, it's not even close. Mexico's trade surplus now hovers around $97.2 billion. Jobs continue to be lost to NAFTA today. In the years 2007-2010, the U.S. economy has lost 116,400 as a result of the trade deficit created by NAFTA. And last year, the growth of Mexican auto exports to the United States alone created more Mexican jobs -- 30,400 -- than the entire U.S. auto industry. It's the U.S. manufacturing sector that has suffered most mightily from NAFTA, alone accounting for 60.8 percent -- 415,000 total -- of the jobs lost to the agreement. Specifically, those making computer of electronic parts have accounted for 22 percent of all job losses, and motor vehicle and parts workers accounted for 15 percent of job losses.

Threatens green jobs

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) 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 NAFTAs 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

Increases trade deficit and costs jobs

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Projections on trade balance, jobs prove wrong. In 1993, Gary Hufbauer and Jeffrey Schott of the Peterson Institute for International Economics (PIIE) projected that NAFTA would lead to a rising U.S. trade surplus with Mexico, which would create 170,000 net new jobs in the United States.8 This figure was trumpeted by the Clinton administration and other NAFTA proponents. Hufbauer and Schott based their projection on the observation that when export growth outpaces the growth of imports, more jobs are created by trade than are destroyed by trade.9 Instead of an improved trade balance with Canada and Mexico, however, NAFTA resulted in an explosion of imports from Mexico and Canada that led to huge U.S. trade deficits. According to Hufbauer and Schotts own methodology, these deficits meant major job loss. Less than two years after NAFTAs implementation, even before the depth of the NAFTA deficit became evident, Hufbauer recognized that his jobs prediction was incongruent with the facts, telling the Wall Street Journal, The best figure for the jobs effect of NAFTA is approximately zero...the lesson for me is to stay away from job forecasting.10 Huge new NAFTA trade deficit emerges. The U.S. trade deficit with Canada of $29.1 billion and the $2.5 billion surplus with Mexico in 1993 (the year before NAFTA took effect) turned into a combined NAFTA trade deficit of $181 billion by 2012.11 This represents an increase in the NAFTA deficit of 580 percent. These are inflation-adjusted numbers, meaning the difference is not due to inflation, but an increase in the deficit in real terms. The U.S. deficit with NAFTA partners Mexico and Canada has worsened considerably more than the U.S. deficit with countries with which we have not signed NAFTA- style deals. Since NAFTA, the average annual growth of the U.S. trade deficit has been 45 percent higher with Mexico and Canada than with countries that are not party to a NAFTA-style trade pact.12 Defenders of NAFTA argue that the NAFTA deficit is really only oil imports. Although oil accounts for a substantial portion of the trade deficit with Canada and Mexico, the oil share of the trade deficit with Canada and Mexico actually declined from 77 percent in 1993 to 55 percent in 2012.13

TAA data proves job loss

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Trade Adjustment Assistance data tracks the NAFTA jobs devastation. While EPIs estimates of the job losses resulting from NAFTA summarize the overall effect of the trade deficit, the government itself tracks some of the layoffs known to have specifically occurred due to imports or offshoring through a government program called Trade Adjustment Assistance (TAA). The TAA program is quite narrow, only covering a subset of jobs lost at manufacturing facilities, while excluding a portion of the jobs that have directly relocated to Mexico or Canada. The program is also difficult to qualify for, which has led some unions to direct workers to other assistance programs. Thus the NAFTA TAA numbers significantly undercount NAFTA job loss. Still, under TAA, over 720,000 workers were certified by 2010 (the most

recent date for which public information is available) as having lost their jobs due to trade with Canada and Mexico or the shift in factories to those countries.21 A report produced by PIIE estimates that fewer than 10 percent of workers who lose their jobs in industries facing heavy import competition receive assistance under TAA.22 Thus, even the pro-NAFTA PIIE believes that TAA vastly underestimates the number of jobs lost due to trade-related displacement. The federal government also tried to determine specific jobs created by NAFTA rather than destroyed. The Department of Commerce established such a program, but after finding fewer than 1,500 specific jobs that could be attributed to NAFTA, the program was shut down because its findings were so bleak.23

Promotes offshoring which further devastates unemployment rates

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Corporate promises of job creation are broken. In addition to NAFTA supporters unfulfilled promises of overall job creation, specific companies also lobbied for NAFTA by claiming that the deal would boost their own hiring and reduce the need to move jobs to Mexico and Canada. In reality, the vast majority of their promises of job creation failed to materialize and many of these companies have actually moved operations to Mexico and Canada since NAFTAs passage.24 For example, Caterpillar, Inc. said that NAFTA would eliminate the incentive to move jobs to Mexico and that it would export more equipment.25 However, in 2008 Caterpillar laid off 338 workers at its Mapleton, Illinois facility as it shifted production to Mexico, while 105 workers were laid off from its Pendergrass, Georgia facility due to rising imports from Mexico in the same year.26 Siemens made claims similar to Caterpillars, and yet it has eliminated over 1,500 U.S. jobs while shifting production to Mexico.27 Johnson and Johnson promised that it would hire hundreds of U.S. workers if NAFTA was approved, but it has ended up offshoring over 800 U.S. jobs to Mexico and Canada since NAFTA went into effect.28 Special investor privileges promote offshoring of American jobs. NAFTAs special new rights and privileges for foreign investors eliminated many of the risks and costs that had been associated with relocating production to a low-wage venue. The incentives these rules offered for offshoring included a guaranteed minimum standard of treatment that Mexico had to provide to relocating U.S. firms, which went above and beyond the treatment provided to domestic firms. This included the right for foreign investors to directly challenge the Mexican government in United Nations and World Bank tribunals, demanding compensation for environmental, zoning, health and other government regulatory actions of general application that investors claimed as undermining their expected profits. (Some of these cases are described below.) By providing foreign investors access to foreign tribunals, NAFTA also eliminated the risk of having to rely on Mexicos domestic court system. The protections granted to corporations

NAFTA hurts the economy jobs Strachan 11Staff Writer for The Huffington Post (U.S. Economy Lost Nearly 700,000 Jobs Because Of NAFTA, EPI Says, July 12, 2011,
http://www.huffingtonpost.com/2011/05/12/nafta-job-loss-trade-deficit-epi_n_859983.html)//RT

When the North American Free Trade Agreement was first signed in 1994, proponents said it would eventually create jobs for the U.S. economy. 17 years later, a new report estimates, the American worker only has hundreds of thousands of job losses to show for it. According to a report by Economic Policy Institute
economist Robert Scott, entitled "Heading South: U.S.-Mexico trade and job displacement after NAFTA," an estimated 682,900 U.S. jobs have been "lost or displaced" because of the agreement and the resulting trade deficit. The

historic agreement, signed just three years after the collapse of the Soviet Union, tore down trade barriers between the U.S., Canada and Mexico, making trade and investment easier for businesses without allowing for the cross-border movement of labor. Despite the agreement being considered a boon for Mexico, the country's economy

grew only 1.6 percent per capita on average between 1992 and 2007, The New York Times reported in 2009. The EPI's calculation of 682,900 jobs lost to NAFTA takes into account jobs created as a result, too. Last year, for example, U.S. exports to Mexico supported 791,900 jobs. It's just that those jobs created pale in comparison to the 1.47 million U.S. jobs that would be necessary without the imports resulting from NAFTA, the report found. Still, the number of jobs lost to NAFTA looks minimal when placed against the havoc freaked by the financial crisis. Only in 2008, at the height of the crisis, the U.S. economy hemorrhaged 2.6 million jobs, according to CNNMoney. The U.S. is currently considering a similar trade agreement with South Korea, called U.S.-Korea Free Trade Agreement (KORUS FTA). KORUS, like NAFTA, could similarly displace American jobs, EPI warns. Perhaps the most drastic switch post-NAFTA has been in the two country's trade deficit. In 1993, before the signing of NAFTA, the U.S. held a $1.6 billion trade surplus over their neighbor to the south, which supported 29,400 jobs. By 1997, the tides had turned, and Mexico laid claim to a much larger surplus of $16.6 billion. As of 2010, it's not even close. Mexico's trade surplus now hovers around $97.2 billion. Jobs continue to be lost to NAFTA today. In the years 2007-2010, the U.S. economy has lost 116,400 as a result of the trade deficit created by NAFTA. And last year,
the growth of Mexican auto exports to the United States alone created more Mexican jobs -- 30,400 -- than the entire U.S. auto industry. It's the U.S. manufacturing sector that has suffered most mightily from NAFTA, alone accounting for 60.8 percent -- 415,000 total -- of the jobs lost to the agreement. Specifically, those making computer of electronic parts have accounted for 22 percent of all job losses, and motor vehicle and parts workers accounted for 15 percent of job losses. Job losses haven't been limited to certain geographic regions, either, as all fifty states have lost jobs as a result. And while the states with the largest total number of job losses, California and Texas, do hug the southern border,

it's actually manufacturing-heavy states to the north, such as Michigan, Indiana and Kentucky, that have lost the largest share of jobs to Mexico.

NAFTA hurt wages and growth and caused income inequalitydemand couldnt meet the amount of consumption, caused the financial crisis
Correa and Seccareccia 2009Mario Seccareccia has been teaching at the University of Ottawa since 1978. He has authored/co-authored or co-edited some eight books or monographs, and has published some 75 articles or chapters of books. He is also editor of the New York-based International Journal of Political Economy. His principal research interests are in the areas of monetary economics, history of economic thought and methodology, labour economics, and Canadian economic history. Eugenia Correa is a professor at the National Autonomous University of Mexico. ["The United States Financial Crisis and Its NAFTA Linkages." International Journal Of Political Economy 38.2 (2009): 70-99. Political Science Complete. JSTOR. 27 July 2013]//MM The Underlying Cause of the Subprime Crisis and the NAFTA Linkage From the initial pressures under NAFTA, and with the implementation of a competitiveness strategy resting on rigorous anti-inflationary monetary and fiscal policies in both Canada and Mexico, this growing trade and financial liberalization imparted a deflationary bias on the evolution of money and real wages as well as prices in the respective countries on the North American continent while widening the share of profit (see Baragar and Seccareccia 2008; Seccareccia 2007). On the other hand, for the NAFTA model to actually succeed, high consumption (and therefore high wages), especially in the United States, is needed to sustain aggregate demand and their ELG strategies, not only for Canadas and Mexicos economies but also for the rest of the world economy. This pattern of growth for North Americabased on high consumption growth for the United States and a low-inflation environment (because of austere macroeconomic policy, low labor costs in Mexico, and low energy and raw materials prices from Canada)did occur, and the ELG model quickly extended its tentacles beyond North America as growing industrial giants, such as China, began to replace Mexico as a source of labor-intensive manufactured products (see Blecker and Seccareccia forthcoming). However, the impact this had on real wage growth on each of the three NAFTA countries is of great interest. As evidenced from the series provided by the U.S. Bureau of Labor Statistics, real wages (at least for the manufacturing sector) grew somewhat in the United States, grew rather marginally in Canada, and actually declined during the early years of NAFTA in Mexico, only to reach a

level in 2006 that was just marginally above its 1996 level! Interestingly, all three countries showed practically no growth and, in one case, there was a significant decline in real wages until the turn of the millennium. Real wages showed some upward trend in the United States, reaching a plateau between 2003 and 2005, but grew only by an average of less than 1 percent annually for the decade between 1996 and 2007 as a whole, which was well below the trend of growth in productivity for that same period. Although one could not argue outright that the growing U.S. trade deficit (which was partly a byproduct of this reconfiguration of both the North American and world economy based on outwardlooking measures to stimulate growth) was actually a source of impoverishment for the rest of the world (see Scott 2007), the experience of Mexico in the NAFTA context confirms that real wages collapsed during the early NAFTA era and have not grown much beyond their pre-NAFTA levels even during the first decade of the twenty-first century. This labor market state of anemic real wage growth led to another undesirable consequence when looked at from the angle of income inequality, primarily in Canada and the United States. Although the evidence for Mexico does suggest some improved, yet fluctuating pattern of income distribution, throughout the NAFTA era both the United States and Canada witnessed a significant growth in income inequality; and therefore, contrary to what the supporters of NAFTA marketed, the rising tide of trade did not lift all boats! The ratio of the share of the highest income quintile to that of the lowest income quintile for the three NAFTA countries was a simple measure of income disparity adopted for the purpose (Figure 2). Starting with the FTA, from 1989 onward, income inequality grew a great deal in Canada until this ratio reached a plateau by the turn of the twenty-first century. In the case of the United States, the ratio rose consistently since the early 1990s to 2006 and, by 2005/6, actually surpassed that of Mexico according to our simple measure of income inequality. Undoubtedly other factors affecting income distribution were also at work, reflecting such tendencies as the long-term pattern of deindustrialization and growth of the service sector; but, as the shaded area for the FTA and then the NAFTA period suggests, trade liberalization must have contributed by accelerating this trend toward greater income inequality in both Canada and the United States. With a relatively flat real wage movement in the United States and Canada that was accompanied by growing income disparities, how then could domestic consumption grow quickly enough to absorb the rising quantity of raw materials and manufactured goods being produced in Canada, Mexico, and elsewhere to supply what became a growing U.S. consumption binge? The answer of course is that it was the fairly loose monetary policy during the Greenspan era coupled with a plethora of financial innovations made possible in an age of financial deregulation that promoted a significant rise in consumer spending. The rising inequality accompanied by growing accessibility to credit promoted household indebtedness on a scale not hitherto seen. As shown in the left-hand panel of Figure 3, ratios of household debt to disposable personal income exploded beginning in the mid1990s and peaked as house prices reached a plateau by 2006/7. The plummeting of house prices brought about by significant monetary tightening (as the effective federal funds rate rose from an average of 1.13 to 5.02 percent between 2003 and 2007) was the coup de grce that ended what was otherwise a typical housing bubble and triggered the subprime debacle starting in the summer of 2007. In fact, even though all forms of consumer credit expanded during the pre-2007 era, the more interestsensitive residential mortgages dominated over all other forms of household debt. Despite the rising problem of effective demand engendered by flat real wages and increasing income inequality, this growing household indebtedness and plummeting saving rate initially spurred growth forward (either domestically or via exports) in the three NAFTA economies. But, as predicted by such distinguished scholars as Wynne Godley since the late 1990s, it was only a matter of time before the United States, together with its trading partners, would face a severe collapse when looked at from the angle of the net financial imbalances across the wide sectors of the U.S. economy (see Godley 1999; Godley and Izurieta 2001). Securitization made it easier for the financial sector to spread, as well as to hide, the high risk associated with ballooning household debt. Eventually, as evidenced by the subprime crisis,

growing securitization merely ensured that the speed and breadth of the financial collapses propagation across the financial sector would be all the more severe as these subprime mortgages were repackaged into various kinds of financial derivativesthe so-called collateralized debt obligations held by investment banks and other financial institutions both in the United States and internationally. However, the seed of the financial collapse was the underlying imbalance between debt and income. The high consumer spending that was pushing forward household debt ratios throughout the NAFTA era (see Figure 3) simply could not be sustained without a significant rise in real incomes for those lowincome households accumulating ever more debt during the pre-2007 period.

NAFTA hurts wages

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Wages decline due to NAFTA. Trade affects the composition of jobs available in an economy. The United States has lost millions of manufacturing jobs during the NAFTA era, but overall unemployment has been stable (excluding recessions) as new low-paying service sector jobs have been created. Proponents of NAFTA raise the quantity of jobs to claim that NAFTA has not hurt American workers. But what they do not mention is that the quality of jobs available, and the wages most American workers can earn, have been degraded. According to the Brookings Institution, the average worker displaced from manufacturing went from earning $40,154 to $32,123 when re-employed, a 20 percent drop in earnings.30 According to the Bureau of Labor Statistics, two out of every five displaced manufacturing workers who were rehired in 2012 experienced a wage reduction of even greater than 20 percent.31 Such displacement not only spells wage reductions for former manufacturing workers, but also for existing service sector workers. As increasing numbers of workers displaced from manufacturing jobs have joined the glut of workers competing for non-offshorable, low-skill jobs in sectors such as hospitality and food service, real wages have also fallen in these sectors under NAFTA.32 The shift in employment from high-paying manufacturing jobs to low-paying service jobs has thus contributed to overall wage stagnation. The average U.S. wage has grown less than one percent annually in real terms in the 19 years since NAFTA was enacted even as worker productivity has risen at more than three times that pace.33 Given rising inequality, the median U.S. wage has fared even worse and today remains at the same level seen in 1979.34

Increases economic inequality

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Economic inequality reaches new extremes. The richest 10 percent of Americans are now taking nearly half of the economic pie, while the top 1 percent is taking one fifth. Since NAFTAs implementation, the share of national income collected by the richest 10 percent has risen by 18 percent, while the top 1 percents share has shot up by nearly 40 percent.35 NAFTA-style trade helps explain the soaring inequality. NAFTA has placed downward pressure on wages for the middle and lower economic classes by forcing decently-paid U.S. manufacturing workers to compete with imports made by poorly-paid workers abroad. The resulting displacement of those decently-paid U.S. workers has further depressed middle class wages by adding to the surplus of workers seeking service sector jobs. NAFTA also contributes to rising inequality by enabling employers to threaten to move their companies overseas

during wage bargaining with workers. For instance, a Cornell University study commissioned by the NAFTA Labor Commission found that after the passage of NAFTA, as many as 62 percent of U.S. union drives faced employer threats to relocate abroad, and the factory shut-down rate following successful union certifications tripled.36 NAFTA-style deals also dampen middle class wages by forbidding federal and state governments from requiring that U.S. workers perform the jobs created by the outsourcing of government work. Anti-off-shoring policies, Buy American procurement provisions and prevailing wage laws (designed to ensure goods wages for construction work) are subject to challenge in foreign tribunals for violating trade agreement rules. Even proponents of NAFTA admit that such trade pressures have likely contributed to todays historic degree of inequality. The pro-NAFTA PIIE has estimated that as much as 39 percent of the observed growth in U.S. wage inequality is attributable to trade trends.37

Wage loses outweigh cheaper prices

Public Citizen 13 (Public Citizen, nonprofit advocacy group with offices in Washington and Austin, NAFTAs Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement, 2013, http://www.citizen.org/documents/NAFTAs-Broken-Promises.pdf, AL) Wage losses outweigh cheaper prices under NAFTA. Many proponents of NAFTA-style trade acknowledge that it will cause the loss of some American jobs, but argue that U.S. workers still win overall by being able to purchase cheaper goods imported from abroad. First, this promise has failed to materialize for many critical consumer items, such as food. Despite a 188 percent rise in food imports from Canada and Mexico under NAFTA,38 the average nominal price of food in the United States has jumped 63 percent since the deal went into effect.39 Second, even those reductions in consumer goods prices that have materialized have not been sufficient to offset the losses to wages under NAFTA. The Center for Economic and Policy Research discovered that when comparing the lower prices of cheaper goods to the income lost from low-wage competition under current trade policy, the trade-related losses in wages outweigh the gains in cheaper goods for the vast majority of U.S. workers. U.S. workers without college degrees (over 65 percent of the workforce) have likely lost an amount equal to 12.2 percent of their wages under NAFTA-style trade even after accounting for the benefits of cheaper goods, meaning a net loss of almost $3,300 per year for a worker earning the median annual wage of $27,000.40

Mexican Scenario

NAFTA GOOD, Dont Reform

NAFTA is key to the Mexican Economyassumes all of their alt cause claims
Irwin 9 professor of economics at Dartmouth College and the author of Against the Tide: An Intellectual History of Free Trade (Douglas A, Free Trade under Fire, 2009, Princeton University Press)//ER Unfortunately, not all countries that have liberalized their trade policies have enjoyed such dramatic successes. For example, Mexico significantly reduced tariffs and other trade barriers when it joined the GATT in 1985 and signed free trade agreements with the United States and Canada (NAFTA) in 1994 and the European Union in 2000. As a result, Mexicos trade and foreign investment increased significantly. The share of trade (average of exports and imports) in GDP rose from 13 percent in 1985 to 52 percent in 2002. These reforms improved productivity in industries exposed to international competition, as described in chapter 2. However, Mexicos overall macroeconomic performance has been disappointing since NAFTA. Economic growth has been lackluster. Employment is only slightly higher than before the agreement took effect, and real wages are actually lower. NAFTA opponents blame open trade for Mexicos problems. These critics say that NAFTA has harmed farmers and is responsible for the lack of improvement in the standard of living of workers. The real source of Mexicos malaise is macroeconomic, In December 1994, about a year alter NAFTA went into effect, and for reasons not related to the trade agreement, Mexico faced a speculative attack on the peso and was forced to devalue its currency. The peso crisis stemmed from an inconsistency between Mexicos monetary policy and its commitment to maintain at a fixed exchange rate. The peso devaluation was a severe setback that slashed real wages overnight and sent the economy into a deep recession. By keeping trade flows moving, NAFTA helped the Mexican economy through a difficult period. The continued expansion of trade promoted the countrys recovery from this traumatic shock. Yet since the initial rebound, the Mexican economy has been weak. The reason for this disappointing performance is not trade related, but a persistent and severe credit crunch, including a deterioration in contract enforceability and an increase in nonperforming bank loans. Indeed, Mexicos credit-to-GDP ratio fell from 49 percent in 1994 to 17 percent in 2002, preventing any broad-based economic recovery?"

Mexican growth is key to the US economy. Marczak 4/18 - director of policy at Americas Society and Council of the Americas, senior editor of the AS/COA policy journal,
Americas Quarterly, and managing editor of AQ Online (Jason, Immigration Reform get U.S. in on Mexicos Boom, 4/18/13; < http://www.cnn.com/2013/04/18/opinion/marczak-immigration-the-new-mexico>)//Beddow As Congress crafts comprehensive immigration legislation, Democrats and Republicans must keep in mind that Mexico

is changing rapidly, and policies crafted to reflect yesterday's Mexico will not help the U.S. make the most of the potential of today's and tomorrow's Mexico. Mexico's future is bright, and tapping into this growth and economic prosperity is vital to U.S. competitiveness.
But the U.S. needs immigration reform to build on its huge bilateral trade with Mexico -- more than $1 billion in goods and services each day, or $45 million an hour. Mexico's President Enrique Pea Nieto has achieved in less than five months in office what eluded previous administrations for six years. In the second half of 2013, he hopes to add energy to the improvements in education and telecommunications that are sailing through under the umbrella of the Pact for Mexico political agreement.

Economic decline breaks down cooperation and leads to war heg decline, falling trade, rising protectionism, and diversionary tactics.
Royal 10 Director of Cooperative Threat Reduction Policy, US-Department of Defense, policy advisor (Jedidiah, Economics of War and Peace: Economic, Legal, and Political Perspectives, pg. 212-214; Print.)//Beddow The counterargument to contagion is the risk-sharing argument. It suggests that while trade and financial linkages may spread a crisis, this creates a cushioning effect that, overall, minimizes the effects on any individual state. In other words, interdependence creates shock-absorbing linkages that soften a states vulnerability to dramatic economic downturns (see, e.g., Kelemli-Ozcan, Sorensen, & Yosha, 2003). Gallegati, Greenwald, Richiardi, and Stiglitz (2008) have made a convincing observation that would appear to clarify this debate. They have provided statistical modeling indicating that risk-sharing and contagion are in fact two sides of the same coin. When economic times are good, inter-linkages provide mechanisms for the diffusion of individual agents that face a liquidity crisis. A leader can request a creditor defer payment, whereas a creditor can then transfer this cost on to other agents. As such the system would absorb the crisis. When liquidity is relatively more scarce during down times, a sufficiently large negative shock will use those very same inter-linkages to transmit that shock to other agents in the system. As a result, risk sharing is beneficial only when the overall economic environment is favourable, while in harsh times it might be better to stay alone *linkage during market downturns+ becomes socially detrimental; not only is it that the expected number of defaults is higher when the economic agents are connected, but defaults
become a systemic failure (Gallegati et al., 2008. Pp.5. 16). Kose, Prasad, and Terrones (2009) considered the same question and found only mild support for risk-sharing and only among developed, industrial economies. They found no evidence that developing, non-industrial countries are able to share risk. The authors break relatively new ground in suggesting why this is the case for non-industrial states: One possibility is that these countries rely more on less stable capital such as bank loans and other forms of debt that may not allow for efficient risk sharing. Indeed, we break up stocks of external assets and liabilities into different categories FDI, portfolio equity, portfolio debt, etc. we find that the underlying composition of capital flows influences the ability of developing countries to share risk. In particular, external debt appears to hinder the ability of emerging market economies to share their consumption risk. (Kose, Prasad, & Terrones, 2009. P. 259) One reason why interdependent states may not be well-suited to share risk is due to the fact that interdependence leads to economic specialization and reliance on external financing. Gande, John, and Senbet (2008) and Corsetii et al. (1999) provide conceptual and analytical links between specialization, moral hazard, and contagion. Thus, the answer to the first question set out at the beginning of this section, whether economic integration and economic crises are linked, seems reasonably well-established. Substantial recent scholarship indicates a positive association between economic interdependence and economic crises. What then about the second question? Is there a positive correlation between economic crises and armed conflict? The impacts at an individual level and on a state level are intuitive and well-documented (See, e.g.,

the instability in the global economic system contributes to social disintegration and political conflict. Social unrest, regime changes, and even civil war have directly resulted from the vagaries of economic integration. Less intuitive is how periods of economic
Richards & Gelleny, 2006). Rodrik (1997a, 197b), among others, argues that 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 behavior 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 Thompsons (1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a 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 user in a redistribution of relative power (see also Gilpin, 1981) 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). Separately, Pollins (1996) 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, Copelands (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 expectations 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 fabricate external military conflicts to create a rally around 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 Kisangani 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. In summary, recent economic scholarship positively correlates economic integration with an increase in
the frequency of economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels. This implied connection between integration, crises, and armed conflict has not featured prominently in the economic-security debate and deserves more attention.

Free trade solves corruption

Reyes-Heroles 4 president of Structura, a Mexican consulting firm, cofounder and executive president of the Grupo de Economistas y Asociados, was ambassador of Mexico to the United States from October 1997 to November 2000, was secretary of energy in President Ernesto Zedillos Cabinet (Jesus F, North American Integration: A Spontaneous or a Driven Enterprise? from chapter 15 of NAFTAs Impact on North America: The First Decade, edited by Sidney Weintraub, published 2004, CSIS)//ER To an extent, global trade stimulates accountability and therefore can contribute to the reduction of one of the most damaging problems for economic growth and public morale: corruption. The interconnection of markets and enhanced transparency, which comes with trade liberal- ization, can become critical elements for reducing discretionary powers and economic rent seeking, both of which are well-known sources of corruption. Free trade has also contributed directly to a lessening of corruption. As multiple firms from various nations compete to get access to domes- tic markets, both for investment opportunities and trade deals, free trade contributes to make the procedures of international transactions more transparent and homogeneous. The room for bribery and cor- ruption can diminish to a certain extent when traders do not have t0 obtain import licenses or to negotiate the terms of FDI with govern- ment officials.

Corruption kills the Mexican Economy Zabludovsky, 2013-24 Horas Anchor---*Karla Zabludovsky, Starting to Come to Light, New York Times, 6-23-13,
http://www.nytimes.com/2013/06/24/world/americas/official-corruption-in-mexico-once-rarely-exposed-is-starting-to-come-tolight.html?pagewanted=all&_r=0] MEXICO CITY Andrs Granier has a sumptuous wardrobe and lifestyle. He has bragged about owning 400 pairs of shoes, 300 suits and 1,000 shirts, collected from luxury stores in New York and Los Angeles. His purchases barely fit in his several properties, scattered throughout Mexico and abroad. Enlarge This Image Bernardo Montoya/Reuters Tapes of Andrs Granier, center, the former governor of Tabasco State,

boasting of his lifestyle were leaked to a radio station. America Rocio/Associated Press Cash that was found on a property linked to Jos Manuel Saiz, Mr. Graniers treasurer. Mr. Saiz was arrested this month. A tape recording of Mr. Graniers boasts, making him sound like a highflying corporate executive, was leaked to a local radio station last month. But his job title, until December, was governor of a midsize southeastern Mexican state, a position that currently pays about $92,000 a year after taxes. We go to Fifth Avenue and buy a pair of shoes; $600, Mr. Granier is heard saying about one of his trips abroad. I took clothes to Miami, I took clothes to Cancn, I took clothes to my house, and I have leftovers, he added, saying, Im going to auction them off. (The day after the recording was made public, he said that he had been inebriated while making those statements in October.) But just as eye-opening as the extravagances of a public official now under investigation after Mr. Graniers

successor discovered that about $190 million in state funds was unaccounted for, the state government said this month is that they came to light at all in a country where state and local corruption, a serious drag on Mexicos development, run deep and are rarely exposed. The case of Mr. Granier, who was taken into
custody on June 14 at a Mexico City hospital where he is being treated for a heart ailment, is just the latest among several former governors and public officials who have recently found themselves under investigation or facing public scorn. Watchdog groups are gaining strength, opposition parties are challenging and exposing the faults of the status quo, and social and traditional news media organizations are increasingly seeking to hold officials accountable. There will be more of these because the issue has taken off, said Ricardo Corona, a public finance expert at the Mexican Institute for Competitiveness, a research group in Mexico City. There is encouragement on the issues of transparency, accountability, access to information. Mr. Graniers case is one of the more closely followed political spectacles here in recent years. By January, when the new government in his state, Tabasco, found holes in the budget, Mr. Granier, 65, had retreated into obscurity. This month, after public shock and outrage over the recording reached a fever pitch, he suddenly resurfaced on television, saying he was in Miami. Im going back to Mexico, he declared in an interview on one of Mexicos most-watched morning shows, Primero Noticias. I dont owe absolutely anything. Upon his arrival at the airport in the capital the following day, a chaotic news media swarm engulfed Mr. Granier at one point he stumbled before the cameras before he was whisked away in a white S.U.V., with camera crews on motorcycles giving chase. Three days later, the Tabasco state attorneys office issued an arraignment order for Mr. Granier on suspicion of embezzlement and improper exercise of public service. His treasurer, Jos Manuel Saiz, already

had been arrested this month on suspicion of embezzlement as he tried to cross the border into the United States, after boxes containing nearly $7 million in unexplained cash were
discovered on a property linked to him. A decade ago, such suspicious accounting would have most likely been kept under wraps, as Mexican officials tended to protect one another and the public took their malfeasance for granted. During the uninterrupted 71-year rule of the Institutional Revolutionary Party, or PRI, governors, who often secured their appointments based on friendly ties with the autocratic presidents, were almost expected to pillage state treasuries. When the party lost the 2000 presidential election, it left a political vacuum across the states. Governors around the country acquired unprecedented autonomy and almost no oversight, said Alfonso Zrate, the president of Grupo

State debt rose to $30 billion in 2012 from about $15 billion in 2008, according to the Ministry of Finance and Public Credit. Accounting for inflation, that was a 70.4 percent increase, according to an article in the online publication Animal Poltico by Marco Cancino, a political analyst in Mexico City. Governments
Consultor Interdisciplinario, a political consulting firm in Mexico. have reported scant details of how they have spent the money from these loans. But with governors from opposing political parties succeeding one another and doing away with the unspoken pact of the PRI years, in which incoming leaders protected departing ones, a system of checks and balances some have called it political retribution is emerging. Freedom of information laws, recent legislative overhauls demanding more accountability from state governments and an increasingly technologically engaged society have been more successful at preventing murky finances from going unquestioned. As a result, tales of disgraced former governors are becoming a staple of the news here, and are part of what Mr. Zrate calls an incipient democracy. In 2011, the federal attorney generals office opened an investigation into a $3 billion debt in the state of Coahuila, acquired mostly during the administration of Humberto Moreira, a former president of the PRI, which recovered the presidency in December. The former governor of the state of Aguascalientes, Luis Armando Reynoso,

is being investigated over improper exercise of public service, news organizations have reported. Last year, Mario Ernesto Villanueva Madrid, the former governor of the state of Quintana Roo who was extradited to the United States in 2010, pleaded guilty to conspiring to launder millions of dollars in bribes he received from the powerful Jurez drug organization, to ensure that its cocaine moved safely through his state, undisturbed by law enforcement. Inroads in
transparency, however, have yet to change the culture and mentality of El que no tranza, no avanza, or He who does not cheat, does not get ahead, a popular motto here. And these victories have yet to transform the countrys image abroad: Mexico fell in Transparency Internationals corruption perception index to 105th place in 2012 from 57th in 2002, with a lower ranking indicating that the country is seen as more corrupt. We still dont have accountability, said Mr. Cancino, the political analyst, who warned that progress in transparency practices at the federal level would slowly make their way down to the local and state levels. There are still 32 battles that we have to wage, he said, referring to Mexicos 31 states and one federal district. Small gains in transparency, seen through scandals like the one enveloping Mr. Granier, have not translated into justice served, experts say. Governors are investigated but rarely charged. We know what is going on, said Sergio Aguayo, a political analyst at the Colegio de Mxico. But no measures are being taken. Mexicans who are active on Twitter discuss these scandals for days and sometimes weeks, shaming politicians and pressing traditional news media to cover them extensively. But political analysts argue that there are no effective mechanisms yet to translate citizen participation into structural change. What do we do so that society goes from indignation to action? Mr. Cancino asked. In the meantime, former politicians who endure public scrutiny and a dose of humiliation often come out of these scandals largely unscathed. In April, the newspaper Reforma reported that Mr. Moreira, the repudiated former Coahuila governor, was living with his family in an upscale neighborhood in Barcelona, Spain, while attending a local university.

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 Mexicos 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 benefits Mexican economyimports

Porter 8 (Eduardo Porter, Eduardo Porter writes the Economic Scene column for The New York Times. Formerly he was a member of The
Times editorial board, where he wrote about business, economics, and a mix of other matters, 2/11/8, NAFTA is a sweet deal, so why are they sour, http://www.nytimes.com/2008/02/11/opinion/11mon4.html?_r=0)

Last week, tens of thousands of poor Mexican farmers marched down Mexico Citys fancy Paseo de la Reforma demanding that Nafta be reversed, their cows and donkeys occasionally taking a nibble from the grass along the median strip. Floridas sugar barons sent their lobbyists to Capitol Hill. This shared outrage underscores how egalitarian free trade is: undermining inefficient producers who survive behind protective barriers, be they fabulously wealthy sugar producers in Florida or campesinos on tiny plots in Michoacn. But despite their shared fears, the two sides of this divide will be affected by Nafta in very different ways. American sugar barons are right to be afraid. Free trade in sugar within North America will allow cheaper Mexican sugar to flood in, undercutting the government system of sugar supports, which guarantees farmers high prices and costs consumers about $1.5 billion a year. Mexicos rural poor, even if they dont believe it now, are likely to come out ahead. Mexican farmers fear that a flood of cheap agricultural imports from the United States will take away their meager livelihoods, and end a centuries-old way of life revolving around small-scale farming of corn. Nafta has already shaken up Mexican farming mostly for the better. The value of agricultural imports from the United States has doubled since 1994, when tariffs started to gradually decline. Imports of corn have more than doubled by volume. But this isnt displacing Mexicos small-scale farmers. Most corn from the United States is used for feed and doesnt compete with white corn farmed in Mexico. Mexican corn production is about a third higher than before Nafta came into effect. And cheap American corn is providing cheap feed to Mexicos livestock farmers. Mexico confronts a daunting challenge in dealing with rural poverty. One in five Mexicans depends on agriculture, and of those, a third live in extreme poverty. But farming corn on tiny plots will not provide the solution. The Mexican government must revamp its own system of supports that now favors mainly big farmers, and provide small farmers with access to credit and knowhow. Rural Mexico needs investment to increase yields and move out of corn and into more lucrative crops that are better suited to the countrys arid and mountainous terrain. And Nafta will help, providing a market for Mexican agricultural exports. Americas sugar barons have been pressing hard to stop the opening of Naftas sugar trade. They first cut a deal with Mexicos sugar barons that would have created a new system limiting trade in sugar and other sweeteners a direct refutation of Naftas spirit and

rules. Last week, the sugar lobby announced that it was dropping that idea. Yet the sugar support system is still in place in the United States which means the government may have to start picking up the tab and the fight isnt over. Opening up the sugar trade with Mexico will be good news for Americans: it will lead to lower sugar prices for everybody, from confectionary manufacturers to regular consumers. And Nafta will be good news for Mexicos consumers and many of its farmers. The political fight in Mexico isnt over either. While the government will have to help some of its farmers adapt to a more competitive world, its main agricultural challenge is to keep food prices low to feed a growing urban population. It will also need to help more rural Mexicans find jobs outside agriculture. On all these fronts, Nafta is likely to help.

NAFTA drives Mexicos economy skilled labor and a growing middle class
Taylor 12 State Department Correspondent at The Washington Times, Editor at World Politics Review (Guy, NAFTA key to economic, social growth in Mexico, The Washington Times, 5/15/12, ProQuest)//ER 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. Poverty rate nearly halved 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.

Mexico loves NAFTA- helped them become a global trade competitor Valdez 12 (Diana Washington Valdez, Senior reporter for the El Paso Times, NAFTA helped Mexico, February 8th El Paso Times in news
section, LEXIS //NS)

Mexico pursued passage of the North American Free Trade Agreement to increase foreign investment and create jobs -- something that has worked -- said Herminio Blanco, his country's chief negotiator for the landmark accord with the United States and Canada. "It all started in 1990 when President Carlos Salinas raised the idea for this," Blanco said Tuesday. "We began the negotiations in 1991, and the point was to bring investment to Mexico to create more jobs." The former minister of commerce and industry said the overall impact of NAFTA on Mexico has been positive. He said Mexico conducts $2 billion in trade each day with the world in great part because of NAFTA. He added that free trade also transformed Mexico into a global economic competitor. Since NAFTA was passed nearly 20 years ago, Mexico has done $160 billion worth of trade and Mexican companies have set up operations coast to coast in the United States.

NAFTA key to Mexicos manufacturing industry

Sabatini 1/8 (Christopher Sabatini, Professor at Columbia and Director for Latin America at the National Endowment for Democracy with a PhD in Comparative Government and International Relations from the University of Virginia and a BS in Political Science and Government from Syracuse University, In Latin America, Creative Focus Could Pay Off, 8 January 2013, http://www.worldpoliticsreview.com/articles/12609/in-latin-america-creative-focus-could-pay-off, AL) Since it came into force in 1994, the North American Free Trade Agreement has become a centerpiece of U.S. policy toward the region, even though many of its original ambitions have been left unmet. Trade among the United States, Mexico and Canada, which has risen threefold since the agreement came into force, is currently estimated to support 14 million U.S. jobs. The free trade zone was also critical to Mexicos development and its recent recovery after the 2007 crisis. In 2012, Mexicos economic growth outpaced the one-time economic darling of the hemisphere, Brazil. Even more propitiously, Mexico exports more manufactured products, and not just to the U.S., than all other Latin American countries combined. Mexicos access to the U.S. market has allowed Mexican manufacturers to build competencies in value-added production that they are now exploiting on the global market. But there is still much to do to deepen and improve NAFTA so that it can serve as a catalyst for broader development, such as spurring greater infrastructure investment along the border and throughout Mexico, and expanding and improving the energy networks among all three members. Deepening NAFTA will require presidential initiative. NAFTA has languished from suspicions over the agreement left over from before it was approved as well as lack of understanding of its potential. It has also fallen victim to the bureaucratic inertia of frequent technical meetings and summits that lack the necessary vision and executive commitment to really effect change. Now is the time to make the push to seize the economic and regional diplomatic potential of 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 meet- ings those where interest rate decisions are madeon 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 con- text. 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

NAFTA is currently key to Mexicos 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-growth-inmexico/?page=all]//GH CHIHUAHUA CITY, Mexico The North American Free Trade Agreement, which went into effect in 1994, has been the key driver of Mexicos 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 Mexicos 31 states. What were 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, were talking about automobiles and aerospace, Mr. Wilson said. Mexico is now graduating more engineers than Germany every year. A 40 percent jump in Mexicos 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 Mexicos 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, NAFTAs reputation remains a topic of heated debate. From the onset, when 1992 U.S. presidential candida te 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 Mexicos agricultural trade rules through NAFTA, sa id 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 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 creates displace ment, and then on the other, Mexico is put in a bind in terms of how its government can try to navigate social and economic problem s created by the agreement.

Apart from such concerns, others assert the increasingly globalized nature of Mexicos 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 its 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 Mexicos 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. Were 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 dont head south.

NAFTA has helped Mexicos 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 Mexicos 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 and its aftermath, U.S. agricultural exports dropped by 23 percent that year, but have since surged back setting new annual records.

of the peso devaluation 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 has drastically helped Mexicos 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 Mexicos 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. Mexicos 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 Mexicos 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

Mexican prosperty is key to the US economy consumption. ONeill 1/14 Senior Fellow for Latin America Studies, contributor to the Council on Foreign Relations
and the Wilson Institute (Shannon K., U.S. Depends on Mexico for Exports, 1/14/13; http://www.huffingtonpost.com/2013/01/14/us-depends-on-mexico-for-_n_2471961.html)//Beddow Surprising to many Americans is the importance of the United States trade with Mexico. While Asia captures the headlines, U.S. exports to Mexico are double those to China, and second only to Canada. And while many of these goods come from border states -- Texas, Arizona, New Mexico and California -Mexico matters for much more of the union. Seventeen states send more than 10 percent of their exports to Mexico, and it is the number one or two destination for U.S. goods for nearly half the country. The graph below shows those states most economically dependent on our southern neighbor -notice that South Dakota and Nebraska outpace New Mexico and California. These flows are only accelerating. During the first ten months of 2012 exports heading south grew by $17 billion (or 10 percent) compared to 2011, reaching a total of $181 billion. They include petroleum products (some $17 billion worth) and intermediate goods such as vehicle parts, electrical apparatuses, industrial supplies, metals, and chemicals (over $40 billion combined). Spurred on by deep supply chains, these pieces and parts move fluidly back and forth across the border (often quite a few times) before ending up as finished goods on store shelves in both countries. U.S. exports and Mexico The uptick should be seen as a good thing. According to economic studies, these exports support some six million American jobs (directly and indirectly). But to continue this dynamism, the United States and Mexico need to improve border infrastructure and facilitate flows. This means expanding border crossings and highways, and harmonizing regulations and customs to make the process easier and faster. Prioritizing and investing in bilateral trade will provide greater opportunity and securityfor U.S. companies and workers alike.

Mexican growth is key to the US economy manufacturing. ONeill 13 Senior Fellow for Latin America Studies, contributor to the Council on Foreign Relations
and the Wilson Institute (Shannon K., Mexico Makes It, March/April 2013; < http://www.foreignaffairs.com/articles/138818/shannon-k-oneil/mexico-makes-it>)//Beddow Since NAFTA was passed, U.S.-Mexican trade has more than tripled. Well over $1 billion worth of goods crosses the U.S.-Mexican border every day, as do 3,000 people, 12,000 trucks, and 1,200 railcars. Mexico is second only to Canada as a destination for U.S. goods, and sales to Mexico support an estimated six million American jobs, according to a report published by the Woodrow Wilson International Center's Mexico Institute. The composition of that bilateral trade has also changed in recent decades. Approximately 40 percent of the products made in Mexico today have parts that come from the United States. Many consumer goods, including cars, televisions, and computers, cross the border more than once during their production. Admittedly, this process has sent some U.S. jobs south, but overall, crossborder production is good for U.S. employment. There is evidence that U.S. companies with overseas operations are more likely to create domestic jobs than those based solely in the United States. Using data collected confidentially from thousands of large U.S. manufacturing firms, the scholars Mihir Desai, C. Fritz Foley, and James Hines upended the conventional wisdom in a 2008 study, which found that when companies ramp up their investment and employment internationally, they invest more and hire more people at home, too. Overseas operations make companies more productive and competitive, and with improved products, lower prices, and higher sales, they are able to create new jobs everywhere. Washington should welcome the expansion of U.S. companies in Mexico because increasing crossborder production and trade between the two countries would boost U.S. employment and growth. Mexico is a ready, willing, and able economic partner, with which the United States has closer ties than it does with any other emerging-market country.

Any attempt to reform NAFTA will lead to a collapse of Mexican economy turns advantage
Hurts Mexican economy
Aziz 7 (Nikhil Aziz, Nikhil Aziz has been Executive Director of Grassroots International since 2005. Before joining Grassroots, Nikhil was Associate Director at Political Research Associates, where he led a team that studied the conservative movement and the political right in the United States, NAFTA is Killing Tradition of Corn in Mexico, 9 November 2007, http://www.grassrootsonline.org/news/articles/naftakilling-tradition-corn-mexico) The urgent nature of this campaign is clear as we near January 1, 2008, when the last remaining protections that Mexican peasants and indigenous peoples have preventing the flooding of their country with subsidized U.S. corn and beans, the two staples of the Mexican diet, will be erased. And so, on November 18, 2007 they will undertake a national mobilization to call attention to this looming disaster. When the North American Free Trade Agreement (NAFTA) was signed by the United States, Canada and Mexico in 1994 over the widespread opposition of Mexicos rural poor and indigenous peoples, some time-limited tariff protections were put in place to prevent U.S. exports of these two foods from deluging Mexico and causing economic upheaval. The immediate and long term impact of such a deluge might well be much larger than the recent floods caused by Hurricane Noel in Tabasco and Chiapas states. Since the implementation of NAFTA, and even with these limited protections, millions of Mexicans, particularly from rural communities, have been hard hit. More than 2 million rural people have been displaced from the countryside and forced to emigrate to cities or to the North in search of a means for survivalan endless supply of cheap labor for maquiladoras on the border or low wage jobs in the United States. The stage for this massive social and economic upheaval was set even before NAFTA when in 1982 the Mexican government began putting in place a neoliberal economic program that aimed at the privatization and deregulation of agriculture and food systems, closely tying it to similar moves in industry. In 1992, the Salinas government pushed through a constitutional amendment privatizing the traditional Mexican ejido and indigenous communal landholdingsland rights that were won after enormous peasant and indigenous struggles and sacrifices culminating in the 1910 Mexican revolution.

Mexican growth is key to the US economy. Marczak 4/18 - director of policy at Americas Society and Council of the Americas, senior editor of the AS/COA policy journal,
Americas Quarterly, and managing editor of AQ Online (Jason, Immigration Reform get U.S. in on Mexicos Boom, 4/18/13; < http://www.cnn.com/2013/04/18/opinion/marczak-immigration-the-new-mexico>)//Beddow As Congress crafts comprehensive immigration legislation, Democrats and Republicans must keep in mind that Mexico

is changing

rapidly, and policies crafted to reflect yesterday's Mexico will not help the U.S. make the most of the potential of today's and tomorrow's Mexico. Mexico's future is bright, and tapping into this growth and economic prosperity is vital to U.S. competitiveness.
But the U.S. needs immigration reform to build on its huge bilateral trade with Mexico -- more than $1 billion in goods and services each day, or $45 million an hour. Mexico's President Enrique Pea Nieto has achieved in less than five months in office what eluded previous administrations for six years. In the second half of 2013, he hopes to add energy to the improvements in education and telecommunications that are sailing through under the umbrella of the Pact for Mexico political agreement.

Economic decline breaks down cooperation and leads to war heg decline, falling trade, rising protectionism, and diversionary tactics.
Royal 10 Director of Cooperative Threat Reduction Policy, US-Department of Defense, policy advisor (Jedidiah, Economics of War and Peace: Economic, Legal, and Political Perspectives, pg. 212-214; Print.)//Beddow The counterargument to contagion is the risk-sharing argument. It suggests that while trade and financial linkages may spread a crisis, this creates a cushioning effect that, overall, minimizes the effects on any individual state. In other words, interdependence creates shock-absorbing linkages that soften a states vulnerability to dramatic economic downturns (see, e.g., Kelemli-Ozcan, Sorensen, & Yosha, 2003). Gallegati, Greenwald, Richiardi, and Stiglitz (2008) have made a convincing observation that would appear to clarify this debate. They have provided statistical modeling indicating that risk-sharing and contagion are in fact two sides of the same coin. When economic times are good, inter-linkages provide mechanisms for the diffusion of individual agents that face a liquidity crisis. A leader can request a creditor defer payment, whereas a creditor can then transfer this cost on to other agents. As such the system would absorb the crisis. When liquidity is relatively more scarce during down times, a sufficiently large negative shock will use those very same inter-linkages to transmit that shock to other agents in the system. As a result, risk sharing is beneficial only when the overall economic environment is favourable, while in harsh times it might be better to stay alone *linkage during market downturns+ becomes socially detrimental; not only is it that the expected number of defaults is higher when the economic agents are connected, but defaults
become a systemic failure (Gallegati et al., 2008. Pp.5. 16). Kose, Prasad, and Terrones (2009) considered the same question and found only mild support for risk-sharing and only among developed, industrial economies. They found no evidence that developing, non-industrial countries are able to share risk. The authors break relatively new ground in suggesting why this is the case for non-industrial states: One possibility is that these countries rely more on less stable capital such as bank loans and other forms of debt that may not allow for efficient risk sharing. Indeed, we break up stocks of external assets and liabilities into different categories FDI, portfolio equity, portfolio debt, etc. we find that the underlying composition of capital flows influences the ability of developing countries to share risk. In particular, external debt appears to hinder the ability of emerging market economies to share their consumption risk. (Kose, Prasad, & Terrones, 2009. P. 259) One reason why interdependent states may not be well-suited to share risk is due to the fact that interdependence leads to economic specialization and reliance on external financing. Gande, John, and Senbet (2008) and Corsetii et al. (1999) provide conceptual and analytical links between specialization, moral hazard, and contagion. Thus, the answer to the first question set out at the beginning of this section, whether economic integration and economic crises are linked, seems reasonably well-established. Substantial recent scholarship indicates a positive association between economic interdependence and economic crises. What then about the second question? Is there a positive correlation between economic crises and armed conflict? The impacts at an individual level and on a state level are intuitive and well-documented (See, e.g.,

the instability in the global economic system contributes to social disintegration and political conflict. Social unrest, regime changes, and even civil war have directly resulted from the vagaries of economic integration. Less intuitive is how periods of economic
Richards & Gelleny, 2006). Rodrik (1997a, 197b), among others, argues that 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 behavior 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 Thompsons (1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a 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 user in a redistribution of relative power (see also Gilpin, 1981) 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). Separately, Pollins (1996) 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, Copelands (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 expectations 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 fabricate external military conflicts to create a rally around 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 Kisangani 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. In summary, recent economic scholarship positively correlates economic integration with an increase in
the frequency of economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels. This implied connection between integration, crises, and armed conflict has not featured prominently in the economic-security debate and deserves more attention.

NAFTA created poor Mexican schooling and a brain drain

Wise and Cypher 2007Dr. Ral Delgado Wise is president of the International Network on Migration and Development; UNESCO Chair on Migration, Development and Human Rights; and Professor of the Doctoral Programme in Development Studies at the Autonomous University of Zacatecas, Mexico. Dr. James M. Cypher received his Ph.D. degree in economics from the University of California, Riverside in 1973. His B.A. and M.A. degrees were awarded by University of California, Santa Barbara. His early research interests were focused on the macroeconomic impacts of US military spending, and he has published numerous articles in this area. Since the late 1980s he has concentrated on the Mexican Economy and issues of internationalization and economic development of poor nations. His book, State and Capital in Mexico (Westview, 1990) was published in Mexico by Siglo XXI publishers. He has taught or worked at several universities in Latin America, and is currently engaged in a large project to assess the pattern of industrialization in Chile. The senior member of the Departments faculty, Dr. Cypher has devoted his career to undergraduate teaching for over three decades. With James Dietz he co-authored a text, The Process of Economic Development (Routledge) the second edition of which will appear in 2003. *The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current Economic Integration. Annals of the American Academy of Political and Social Science , Vol. 610, NAFTA and Beyond: Alternative Perspectives in the Study of Global Trade and Development (Mar., 2007), pp. 120142]//MM In terms of schooling, 39 percent of the population aged fifteen years and older born in Mexico and residing in the United States have attained a level higher than a high school diploma. This figure rises to 52 percent if the full spectrum of the population of Mexican origin in the United States is taken into consideration. By contrast, the average figure for Mexico is 28 percent, which means that in general, and in contrast to what is commonly believed, more qualified workers are leaving than remaining in the

country. In other words, there is a clear selective trend, in line with the underlying rationale behind international migrations. It should also be noted, however, that in comparison to other immigrant groups in the United States, the Mexican contingent is the one with the lowest average levels of schooling. One high-profile form of migration that does not fall in with the stereotypes involves Mexican residents in the United States who have university degrees or postgraduate qualifications. This population includes slightly more than 385,000 individuals born in Mexico. Of those, 86,000 have postgraduate studies, and 10,000 have doctorates (Current Population Survey, http://www.census.gov/cps). This indicates that "brain drain" is beginning to emerge as a major problem.

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 19932002, 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).

NAFTA hurts Mexico

Wharton 3/20 (Wharton, Public Policy and Management, NAFTAs Uninvited Guest: Why Chinas Path to U.S. manufacturing Runs Through Mexico, 20 March 2013, http://www.wharton.universia.net/index.cfm?fa=viewArticle&id=2324&language=english) For his part, Enrique Dussel Peters, professor of economics at UNAM, the Mexican National University, highlights unique sources of tension in the China-Mexico relationship. First, he notes, Mexican elites began their integration with NAFTA way back in 1994, when NAFTA was established. That was long before the leading South American countries deregulated their trade regimes. As a result, Mexican trade is very integrated into specific trade flows with the U.S. and Canada. Second, Dussel Peters says, Mexico prefers to settle its trade disputes via multilateral panels at the World Trade Organization, rather than settle disputes bilaterally. This is highly disliked by the Chinese, who prefer to settle disputes bilaterally. This difference in mindset has fostered distrust and misunderstanding between Mexico and China. Third, although China has been Mexicos second-biggest trading partner (behind only the U.S.) ever since 2003, Mexican policymakers have yet to develop a clear and coherent strategy toward China. Dussel Peters argues that despite Chinas rising importance for NAFTA nations, China remains NAFTAs uninvited guest. China is of critical importance to the region, but NAFTA has not been able to formalize relationships between the NAFTA countries and China. Felipe Monteiro, a senior fellow at Whartons Mack Center for Technological Innovation, stresses that China-Mexico ties have been complicated by the fact that China is a direct competitor of Mexico in the United States. There was a time, notes Monteiro, when Mexico could afford to relegate its relationship with China to the back burner, but Mexican policy makers have realized that you need a bilateral strategy with China. China is too big a country *not to do so+. Short term, Mexicos competitive disadvantage vis--vis China has been tempered in the last year, notes Gallagher, for two key reasons. On the one hand, the Chinese yuan has risen in value, making Chinese exports a bit more expensive. On the other hand, while Chinese wages have risen versus the peso or the dollar, Mexican wages have been largely stagnant -thus, cutting into Chinas wage-rate advantage. For years, Gallagher notes, China benefitted from having both an undervalued yen, and manufacturing wages of about 73 U.S. cents per hour. Since NAFTA, Mexican wages have risen at an annual rate of only 1.5%. While that sounds like something positive for Mexican workers, most Mexican manufacturing takes place in maquiladora enclaves into which 70% to 90% of all inputs are imported from outside Mexico, and then re-exported to the U.S. and Canada with little impact on the rest of Mexico, says Gallagher.

Hurts Mexicos economy

Valdez 12 (Diana Washington Valdez, Senior reporter for the El Paso Times, NAFTA protesters raise awareness around economic injustices
in Mexico, U.S, News section of El Paso Times- January 1st, LEXIS //NS)

About 30 people protested this afternoon at the entrance of the Paso delNorte bridge to raise awareness of what they say are economic injustices in Mexico and the United States associated with free trade. Joe Heyman, a border expert at the University of Texas at El Paso andspokesman for the event, said the group represents the "99 percent" that got left out of the economic prosperity that Wall Street and several big U.S. corporations gained since the North American Free Trade Agreement went into effect. "We're here to let people
know about the economic injustices in Mexico andthe United States," Heyman said. "This is not a U.S. versus Mexico issue. Weare all in this together. NAFTA cost El Paso 35,000 jobs, and is responsiblefor 15 to 25 percent of the wage inequality in the U.S. "About 500,000 workers enter the United States each year as economicrefugees, and about 500,000 children on the U.S.-Mexico border live inpoverty." The protesters held up signs that said "NAFTA favors corporations," "work,justice and dignity," and "NAFTA creates poverty." The group chose the 19th anniversary of NAFTA to conduct the protest. The free trade accord between the United States, Canada and Mexico went intoeffect Jan. 1, 1994, and was designed to increase trade by eliminatingtariffs or import taxes between the three countries.

NAFTA has no effect on maquiladoras

Gruben 98 Assistant Vice President, Director, Center for Latin American Economics, Federal Reserve Bank of Dallas (William C, NAFTA Revisited: The Impact of the North American Free Trade Agreement on Maquiladora Employment, Texas Business Review, December 1998, Google Scholar)//ER Using these measures, I analyzed the effects of NAFTA on the growth of maquiladoras. The final results of this econometric analysis indicate that a negative correlation exists between maquiladora employment and the wage variables with a positive correlation between maquiladora employment and demand. What is most interesting about the results, however, is the persistently negative and insignificant role of NAFTA in the recent growth in maquiladora employment. This finding runs contrary certainly to the allegations of NAFTA opponents such as H. Ross Perot and others.4 While no one can deny that the rate of growth in maquiladora employment has been remarkably rapid since the implementation of the North American Free Trade Agreement in 1994, the expansion apparently has little to do with the agreement itself.

NAFTA resulted in uneven financial integration, hurting Mexicos economy in the long run
Correa and Seccareccia 2009Mario Seccareccia has been teaching at the University of Ottawa since 1978. He has authored/co-authored or co-edited some eight books or monographs, and has published some 75 articles or chapters of books. He is also editor of the New York-based International Journal of Political Economy. His principal research interests are in the areas of monetary economics, history of economic thought and methodology, labour economics, and Canadian economic history. Eugenia Correa is a professor at the National Autonomous University of Mexico. ["The United States Financial Crisis and Its NAFTA Linkages." International Journal Of Political Economy 38.2 (2009): 70-99. Political Science Complete. JSTOR. 27 July 2013]//MM The founders of NAFTA did not consider the possibility of a financial crisis in the United States; nor did they imagine that the headquarters of international banks with subsidiaries in Mexico could face bankruptcy or nationalization. In reality, this sui generis process of financial integration between Mexico and the United States has left the country with a neocolonial financial system controlled by absentee owners, which is based on rent-seeking activities, particularly those related to international arbitrage. Financial authorities have been complacent, lacking independence and legal instruments to act with. In the course of the financial crisis period of 20078, the local subsidiaries of global banks have been rapidly reducing their credit portfolios, although their capture of deposits continues to increase unabated. They are quickly increasing their cash holdings in foreign accounts, and their profits have repatriated to headquarters during successive quarters (Mexico Securities and Banking Commission 2008). At the same time, economic activity fell abruptly in the last months of 2008, along with the export sector and related economic actors. Particularly hard hit have been the automobile and auto parts industries. The financial conditions of the country continue to deteriorate day by day as its economic model is sustained by a constant inflow of dollars (as has happened in other instances of dollarization in Latin America). All the principal sources of dollars have been contracting abruptly, including the export of crude oil, worker remittances, and foreign direct and portfolio investment. Meanwhile, all the obligations that imply capital outflows have continued or sharpened, including the import of food and energy, the payment of dividends and earnings of subsidiaries of global corporations (including banks), the outflow of portfolio investment, and the interest on external debt, both public and private. The domestic currency depreciated in relation to the U.S. dollar by almost 50 percent from September 2008 to March 2009 but then was propped up and stabilized at about two-thirds of its 2008 value until May 2009. Mexicos central bank has spent more than $18 billion (equivalent to 21

percent of its international reserves) to sustain the exchange rate. To understand the magnitude of the problem, one only has to consider that the size of short-term private debt has surpassed $20 billion, and interest payments on external debt are estimated at $14 billion in 2009. Portfolio investment in government bonds of foreign residents is estimated at $27 billion in the third quarter of 2008. None of this takes into consideration the large dollar requirements that an abrupt seizure of positions in the derivatives market would demand. The global crisis of the originatedistribute financial model also represents an endogenous financial crisis in Mexico, of a still undetermined size. As often happens with banking crises, the amount of losses becomes known only once they are all brought to light. However, the consequences can be clearly seen on the horizon: contraction in employment, salaries, and levels of well-being; lower levels of economic activity; and a growing deterioration in the fundamental functions of the government, including ensuring security and territorial integrity, among other factors. These considerations are highlighted by the growing fears that Mexico could become a failed state or at least a failed government (Brogan, Dolan, Helman, and Vardi 2008; Enfoque 2009; Kurtzman 2009). The financial and trade opening, the commitments derived from NAFTA, and the balanced budget law severely limit the ability of the government authorities to address the economic crisis with a welldirected and sufficiently large countercyclical program. However, the same authorities broadly endorse the policies of the IMF, and as such they have no intention of committing themselves to even minimal countercyclical measures. At least for the moment, even the large domestic corporations are being left with no support. Such is the case of the Vitro group, one of the ten largest groups in the country and in operation for over one hundred years, which recently declared a moratorium on several bonds, is selling assets at fire-sale prices and, barring unforeseen developments, could declare bankruptcy in the coming months. NAFTA might be seen as an innocuous part of the global financial crisis, but it is not. NAFTA created an unequal financial integration between Mexico and the United States, and that must be changed to build more equal economic relations within the North American economic region.

NAFTA led to a subordinated integration of Mexico, laundry list of effects

Wise and Cypher 2007Dr. Ral Delgado Wise is president of the International Network on Migration and Development; UNESCO Chair on Migration, Development and Human Rights; and Professor of the Doctoral Programme in Development Studies at the Autonomous University of Zacatecas, Mexico. Dr. James M. Cypher received his Ph.D. degree in economics from the University of California, Riverside in 1973. His B.A. and M.A. degrees were awarded by University of California, Santa Barbara. His early research interests were focused on the macroeconomic impacts of US military spending, and he has published numerous articles in this area. Since the late 1980s he has concentrated on the Mexican Economy and issues of internationalization and economic development of poor nations. His book, State and Capital in Mexico (Westview, 1990) was published in Mexico by Siglo XXI publishers. He has taught or worked at several universities in Latin America, and is currently engaged in a large project to assess the pattern of industrialization in Chile. The senior member of the Departments faculty, Dr. Cypher has devoted his career to undergraduate teaching for over three decades. With James Dietz he co-authored a text, The Process of Economic Development (Routledge) the second edition of which will appear in 2003. *The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current Economic Integration. Annals of the American Academy of Political and Social Science , Vol. 610, NAFTA and Beyond: Alternative Perspectives in the Study of Global Trade and Development (Mar., 2007), pp. 120142]//MM Implications for Mexico In its essence, the labor export-led model gives rise to a process of disaccumulation as the economic surplus is transferred abroad, depriving Mexico of potential multiplier and spread effects through forward and backward linkages. Surplus transference has taken many forms, including net reallocation of profits, interest income, licensing fees, and disguised profits through

transfer pricing and intrafirm transactions in the maquiladora and disguised maquila firms. Net transference also entails the derived benefits from education, health care, and the nurturance of children to maturity. An impressively large fund of social capital created in Mexico is then reassigned to the United States as emigrants produce there while the costs of their training are paid in Mexico. Substantial levels of spending by the Mexican State on education and health care are essentially subsidized inputs into the U.S. transnational production system. To the above transfers should be added the subsidies and lost tax revenues that the Mexican government has permitted to continue up to the present. Firms operating in the maquila and disguised maquila sector pay no tariff charges, are exempt from the value added tax, and pay no income tax. For the maquila sector in 2000, the value of subsidies received exceeded taxes paid to the degree that these firms had a net profit tax rate of -7.2 percent (Dussel Peters 2003, 334; Schatan 2002). Inside Mexico, the labor export-led model has involved collateral costs in terms of deindustrialization and rising unemployment, along with deskilling as industrial workers are forced to shift to the informal sector or to underemploymentin effect dismantling much of the productive apparatus of Mexico. Making matters worse, neoliberal policy makers have imposed very restrictive monetary policies in their single-minded effort to contain inflationary pressures. The result has been a long-term overvaluation of the pesoestimated to be 30 percentwhich has undercut the export market for Mexican producers, particularly medium-sized producers who might otherwise be able to generate employment through the export of Mexican-made products. For these Mexican producers, a second impact is that imported inputs are essentially subsidized, making it extremely difficult for these firms to play the role of domestic suppliers to either the transnational or the Mexican conglomerates (Dussel Peters 2006a).16 Furthermore, these firms, as well as numerous small firms, have every incentive to buy imported inputs, further strengthening the vicious circle. All this points to a process of asymmetric and subordinated integration in Mexicoa process to a great degree accelerated by NAFTA and the neoliberal policies that created the framework for the NAFTA accord. At the same time, the process captures the passivity and emptiness of state policy making in Mexicothe adoption of a neoliberal horizontal stance where there will be no intervention to attempt to direct production by way of the creation of new forms of dynamic competitive advantage, or to forestall processes that are clearly undermining Mexico's production base. Instead, the Mexican state has adopted a posture wherein it is assumed that the dynamic external effects of new forms of production directed toward the foreign market will bring automaticallythrough the forces of the marketa positive restructuring of Mexico's economy. State policy has been limited to a series of opportunistic maneuvers: seeking more maquilas, pursuing more foreign direct investment, using the boom in oil prices to cover the public sectors' debt and boost the economy through government spending that generally will not build vital skills or infrastructure, and relying upon massive inflows of foreign remittances from emigrants to create an informal social welfare system.

NAFTA resulted in uneven financial integrationfree flow of capital, opening of domestic financial market, dollarization
Correa and Seccareccia 2009Mario Seccareccia has been teaching at the University of Ottawa since 1978. He has authored/coauthored or co-edited some eight books or monographs, and has published some 75 articles or chapters of books. He is also editor of the New York-based International Journal of Political Economy. His principal research interests are in the areas of monetary economics, history of economic thought and methodology, labour economics, and Canadian economic history. Eugenia Correa is a professor at the National Autonomous University of Mexico. ["The United States Financial Crisis and Its NAFTA Linkages." International Journal Of Political Economy 38.2 (2009): 70-99. Political Science Complete. JSTOR. 27 July 2013]//MM Financial Liberalization in Mexico and NAFTA Financial Liberalization and Integration The original designers of NAFTA conceived of an economic and financial structure that did not take into account the possibility of financial crises. In any case,

such crises were assumed to result merely from errors of economic policy and would generate fluctuations that would eventually be self-correcting. The recurring tendency for Mexico to run a current account deficit was

taken into consideration under NAFTA, and the establishment of a credit line of $6 billion from the U.S. Federal Reserve and the
Bank of Canada was envisioned. When NAFTA began in 1994, this amount was the equivalent of only three months of external debt payment and was used for the first time in April 1994. Months later, this amount proved to be absurdly small in the face of the large financial commitments that were put in evidence by the rescue package of $50 billion offered by the Fed, Bank for International Settlements, IMF, Citibank, and JPMorgan in January 1995 and that covered the amortization of part of the public and private short-term external debt for several months. This package of loans was fundamental in avoiding a default, which among other things would have jeopardized the financial investments of Goldman Sachs, Merrill Lynch, and other investment funds such as Fidelity, Scudder, Oppenheimer, and Putman (Girn et al. 1995). This

is the size of the hole in the NAFTA financial chapter that nobody wants to face, until the financial crisis explodes. Indeed, as recently as February 2009, the Fed extended $30 billion on its line of credit to the Mexican central bank. Although debates on and analyses of the financial aspects of NAFTA during the past fifteen years have been abundant and diverse, in this paper we consider only three of its fundamental components. First, NAFTA requires and forces the maintenance of the free movement of capital. No restriction can be imposed unless it is general and temporary and is accompanied by an immediate negotiation with the IMF to return to this original state. This obligation is naturally of the greatest interest, not for the expansion of direct and portfolio investment but rather for the free flow of footloose financial capital and for the outflow of earnings, dividends, and profits of all types. Such a guarantee at the level of an international commercial treaty is difficult to justify under any circumstances, but, in the case of Mexico, it also subordinates monetary and fiscal policy to the maintenance of macroeconomic stability (balanced budgets or surpluses), growing external indebtedness (private and public), and the permanent desirability of external capital inflows (foreign direct and portfolio investments). Second, NAFTA committed Mexico to the opening up of its domestic financial market, or rather to the participation of foreign bank subsidiaries through their association with local banks or via the acquisition of established banks. Original provisions created a transitional period to protect the national ownership of banks.
However, the reality of the 1995 banking crisis modified the time frames and accelerated the entrance of foreign banks. At the same time, the governments bailout of banks through capitalization and the purchase of assets increased foreign banks interest in a greater positioning in the domestic banking sector, whose balances had just been restored to health via public funds. The first to arrive were the Spanish banks, which sought wider markets in the face of the new competition envisioned with the creation of the European Economic and Monetary Union. Later,

the large global players such as Citibank and HSBC came into the domestic market, by buying large local banks, along with the Canadian bank (Scotiabank). This change of ownership among the largest Mexican banks increased foreign ownership of the local financial system to around 80 percent over the course of some six years, bypassing the clauses for the protection of the payments system in the original NAFTA (Correa 2004). Third, NAFTA consolidated the dual monetary system, making the dollar the dominant currency, and thereby shaped the perspectives and dynamics of business profit generated in the local currency. This dual currency system also provides an important control over the payment of wages and the level of earnings of medium- to low-income sectors in local currency. This type of control cannot be achieved under the modalities of dollarization as it existed in Argentina or currently exists in Ecuador. Therefore, NAFTA was an instrument of financial integration between Mexico and the United States, with very specific characteristics that were not necessarily planned or agreed upon. But due to this process of integration, the financial system in Mexico has now become part of the geoeconomic territory of the current financial crisis and not simply a victim of current circumstances. This is a relevant issue that we will consider further.

CASE

Nafta is too corrupt for any change, plan will not be able to reform
NAFTA failures kills Its credibility
Cypher 11 (James, economics professor at Fresno State and author of Mexico Since NAFTA: Elite Delusions and the Reality of Decline,
Mexico Since NAFTA: Elite Delusions and the Reality of Decline- page 60//NS)

Far from helping to overcome Mexicos economic backwardness, NAFTA has permanently tied Mexico to a low-wage export strategy. In spite of the export boom, real manufacturing wages in 2002 were 12 percent below the 1994 level, while maquiladora wages only rose by 3 percent.2 In the same period, manufacturing sector employment growth dropped by forty-four thousand jobs while maquiladora employment growth rose by 493,000 jobsroughly equal to one years worth of migration in the first half-decade of the twenty-first century. NAFTA increased exports and foreign investment but it failed to generate significant employment growth because of policy-based wage repression that constrained the domestic market. Labor productivity failed to
improve and from 1994 through 2009 employment growth in the formal economy averaged 387,000 jobs per yearabsorbing only 38 percent of Mexican youth leaving school for the labor market.3 Furthermore, Mexico

deindustrialized under NAFTA because transnational firms began to import more of their inputs and suppliers, almost exclusively relying on a combination of imported components and cheap Mexican labor to process and assemble products for re-export. Approximately 80 percent of Mexicos exports were for the U.S. market, with foreign -owned firms accounting for 80 percent of
total exports. Although Mexico had a $93 billion trade surplus with the U.S. in 2010, overall it suffered a trade deficit. 4 It fell from the twelfth largest exporter in 2000 to the fifteenth largest exporter in 2010, with its share of global exports dropping from 2.61 percent to 1.96 percent.5

Cheaper imported consumer and intermediate goods (inputs) also undermined the domestic industrial base. Stagnation, falling wages, a growing jobs deficit, and surging migration from 2001 through 2008 demonstrated the failure of NAFTAs export-led strategy.

NAFTA failsborder infrastructure insufficient Bronk and Payan 2009Dr. Christopher Bronk is a Fellow in Society, Technology and Public Policy
and the James A. Baker III Institute For Public Policy at Rice University. Dr. Tony Payan is the Assistant Professor of Political Science at the University of Texas at El Paso. *Developing the U.S.-Mexico Border Region for a Prosperous and Secure Relationship. Managing the U.S.-Mexico Border: Human Security and Technology. April 1, 2009. http://bakerinstitute.org/publications/LAI-pub-BorderSecBronkPayan040109.pdf]//MM
Infrastructure The

impact of the growth of cross-border economic integration on border infrastructure has been colossal, as has been the increased inspection protocols by U.S. border officials, as dictated by the Department of Homeland Security after September 11. Economic integration has strained the existing infrastructure because economic activity has grown at a faster pace than investment in infrastructure. In addition, border security measures implemented after September 11 have been found to impede the transborder flow of goods and people. A study by El Colegio de la Frontera Norte shows that the efficiency of cross-border infrastructure has decreased over time. Some general findings are that nearly 46 percent of all roads and highways leading to border stations are in poor condition. Fifty-five percent of the municipal roads by which passenger vehicles access border crossings are insufficient for the volume of traffic. Commercial routes also face serious obstacles: 50
percent have excessive traffic, 17 percent have limited road access, and l2 percent have long queues to pass through the port. In regard to pedestrian crossings, there are too few inspection booths at 74 percent of' all U.S.-Mexico border crossings and too few U.S. Customs and

86 percent of the border-related national transportation system needs to be improved so that export goods can reach their destination in a timely
Border Protection (CBP) inspectors at 80 percent of all ports of' entry. Finally,

manner. 16 the current infrastructure is simply insufficient to handle the volume of traffic, and the result is
long queues, excessive traffic, and increased vehicular pollution.

NAFTA failsborder security Cottam 2005Martha L. Cottam is Professor of Political Science and Director of the Washington State
University Institute for the Study of Intercommunal conflict. *The Management of Border Security in NAFTA: Imagery, Nationalism and the War on Drugs. International Criminal Justice Review, May 2005.]//MM NAFTA is the Western Hemispheres 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

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 CUS and M-US borders. Specifically, we ask whether law enforcement cooperation at the internal borders of NAFTA will follow similar paths at
of greater opportunities for transnational criminal activities. 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. Canada-United States (C-US) and Mexico-United States (M-US) border relations have long yet very different histories The C-US border is often proclaimed, by both sides, as the longest, peaceful, undefended border in the world. In

the M-US border region has experienced a contentious and often violent history; it has been, in Schmidts (1997: 300) succinct summation, an ecosystem for violence as a consequence of being removed form direct governmental supervision and a lack of law enforcement by the centers of power. The creation of NAFTA incorporated two bi-lateral borders which have faced and will face distinctly different problems for police cooperation, and created a political, organizational and perceptual overlay on former bilateral relations which
contrast, have had a profoundly different character (Zagaris, 1995-96, 1996).

NAFTA fails nowUnderfunding and internal problems

Hufbauer and Schott 05 Hufbauer is Reginald Jones Senior Fellow since 1992, Marcus Wallenberg Professor of International Finance Diplomacy at Georgetown University, deputy assistant secretary for international trade and investment policy of the US Treasury; Schott is a senior fellow since 1983, was senior associate at the Carnegie Endowment for International Peace and international economist at the US treasury (Gary Clyde and Jeffrey J, NAFTA Revisited: Achievements and Challenges, Chapter 9: Recommendations for North American Economic Integration, Institute for International Economics, October 2005)//ER First, we would consolidate the three national NAFTA sections into a single staff, which should be jointly funded. The current system of na- tional staffs has resulted in funding disparity with the US section chroni- cally underfunded. The joint funding model should also be used to pay for panelists and other expenses relating to the operation of dispute set- tlement mechanisms. To raise the profile of NAFTA institutions, the uni- fied staff should be housed in a single NAFTA headquarters building, where NAFTA disputes could be heard. Second, in chapter 4, we recom- mend that the dispute settlement provisions of NAFTA be both strength- ened and simplified. Currently NAFTA disputes are addressed in a de- centralized system governed by four chapters (in addition to the two side agreements on labor and

environment). Decentralization has caused some controversy over which chapter should be applied to a given dispute. To avoid this, we suggest consolidation of the processes. Rather than four separate methods for selecting panelists, a single roster should be selected for six-year terms. Panelists should have a broad background in interna- tional economic law and be capable of hearing cases under any chapter. In addition to panel consolidation, the hearing processes and evidentiary standards should be fine-tuned. Second, the NAFTA partners need to reexamine both the dispute settle- ment provisions and how they are used. Chapter 11-on investor-state disputes-has attracted the most criticism. We note above how it should be clarified and updated. Chapters 19 and 20 also merit attention.

NAFTA weak in the squoLabor and environmental policies

Hufbauer and Schott 05 Hufbauer is Reginald Jones Senior Fellow since 1992, Marcus Wallenberg Professor of International Finance Diplomacy at Georgetown University, deputy assistant secretary for international trade and investment policy of the US Treasury; Schott is a senior fellow since 1983, was senior associate at the Carnegie Endowment for International Peace and international economist at the US treasury (Gary Clyde and Jeffrey J, NAFTA Revisited: Achievements and Challenges, Chapter 9: Recommendations for North American Economic Integration, Institute for International Economics, October 2005)//ER The NAFTA labor and environmental side agreements were never de signed to make substantial progress in addressing labor and environ- mental problems. Negotiated primarily to provide political cover for Democratic members of the US Congress to support NAFTA, the side agreements were far from ambitious and were never funded at the level necessary to effectively deal with labor and environmental problems. The labor side agreement is largely hortatory. The environmental side agree- ment is somewhat stronger, but no NAFTA country, least of all the United States, wants intrusive surveillance of its domestic environmental poli- cies. Instead, the side agreements have managed to spotlight selective labor and environmental abuses. Labor unions and some nongovernmen- tal organizations have seized on these shortcomings as a broad rallying cry against "NAFTA failures.

NAFTA weakno financial cooperation

Hufbauer and Schott 05 Hufbauer is Reginald Jones Senior Fellow since 1992, Marcus Wallenberg Professor of International Finance Diplomacy at Georgetown University, deputy assistant secretary for international trade and investment policy of the US Treasury; Schott is a senior fellow since 1983, was senior associate at the Carnegie Endowment for International Peace and international economist at the US treasury (Gary Clyde and Jeffrey J, NAFTA Revisited: Achievements and Challenges, Chapter 9: Recommendations for North American Economic Integration, Institute for International Economics, October 2005)//ER 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 meet- ingsthose 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." Mexico and the United States are both well along on their own cleanup acts, but more

could be clone in a North American con- text. In Canada, the trend toward harmonized securities regulation among the provinces is long overdue. A single national system would help even more."

Trade disputes within NAFTA are currently handled by ad hoc tribunals, which undermine the agreements 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 Chapter 11 of NAFTA provides assurances that a firms 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
Permanent Tribunal for Trade and Investment Disputes. to deal with problems related to investments, trade remedies, finance, and higher-level trade issues. 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. protectionist

Chapter 19 was intended to prevent arbitrary,

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 soft-wood 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

The current ad hoc dispute-settlement mechanisms rely on temporary panelists that are 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 regions confidence in NAFTA. The World Trade Organization (WTO) has established such a permanent court, and it is functioning very effectively. Its time to apply it to North America.
Canadians. increasingly

NAFTA integration risks failure now hurts US and Mexican economic competitiveness
Peters, 09 Enrique Dussel, professor at the Graduate School of Economics, Universidad Nacional Autnoma de Mxico (Manufacturing Compet itiveness:
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, Mexicos 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 conditions have been harsher:

from 1994 to March 2009 manufacturings 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 2009or 25 percent. In the recent economic crisis, manufacturing has been hit particularly hard, suffering 59 percent of the countrys 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 Mexicos 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 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 importanceyarntextile-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 Fordwill survive the crisis. Mexicos 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 19942000, 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 Mexicos 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 Mexicos tight monetary policy, and low tariffs under NAFTA. NAFTAs investment and intellectual property rules also made it difficult to pursue East Asian -like policies to enhance industrial competitiveness (though it is not clear th e Mexican government would have used such policies if they had the space to do so). Chinas accession to the WTO accentuated these forces. Mexicos exchange rate became even more overvalued relative to competitors (China) in the U.S. mark et. 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

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.
from 1994 to 2000 began to lose competitiveness in the U.S. market with respect to China.5

Economic disintegration is hollowing NAFTA now

Peters, 09 Enrique Dussel, professor at the Graduate School of Economics, Universidad Nacional Autn oma de Mxico (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 governments 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, apparel, and

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 longterm 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 19942000, which saw increasing regional integration in a highly competitive global market, from 20002009 (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.
electronics, among others. Yet this apparent success masks fundamental weaknesses, as

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 co-sponsors 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.

NAFTA doesnt 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 NAFTAs 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 wont be enough. NAFTA wasnt the beginning of

North Americas 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 dont 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 Americas 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 topdown government plans or decisions. This bottom-up 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 didnt 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 modestbilateral 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 Americas 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 chainsand, 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 centuryhow 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 naturalnot unusualto 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 pan-national 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. NAFTAs lack of immigration policy makes implementation impossible there are differences in provisions for Canadian and Mexican immigrants McGehee 2 (Melinda, JD from Dedman School of Law, Using Immigration as a Protectionist Mechanism While Promoting Free Trade, Using Immigration as a Protectionist Mechanism While Promoting Free Trade, 8 Law & Bus. Rev. Am. 667, Fall, Lexis) Thus, unfortunately, the negotiators' "careful tactics" of ignoring the issue have created more of a divide between immigration in the United States and NAFTA. n12 Id. at 366. n13 Alan C. Nelson, NAFTA: Immigration Issues Must Be Addressed, 27 U.C. DAVIS L. REV. 987, 987 (1994). When looking at the overall effect of U.S. immigration in NAFTA, one can see that it is quite limited. "NAFTA does not address permanent immigration. All entries under its provisions are determined to be temporary, and business persons entering under NAFTA are presumed to return to their home countries." n14 In looking at the opposite side of the spectrum, NAFTA does not address illegal immigration either. n15 It is interesting to note that although NAFTA never addressed these issues, the controversy of illegal immigration was a

point of issue for the supporters and detractors of NAFTA. n16 "NAFTA supporters argued that the trade agreement would reduce the illegal immigration in the long run by stimulating the Mexican economy and thereby creating jobs, increasing wages and raising the standard of living for Mexicans." n17 The argument appears somewhat logical except [*670] for the fact that immigration and complexities were not a focus in drafting NAFTA. Post-drafting, however, it turns out to be an objective of NAFTA. n14 Schoonover, supra note 3, at 4. n15 Id. n16 Id. n17 Id. II. Annex to Chapter 16--Immigration Provisions The majority of the volume of information within chapter 16 is found in annex 1603 on "Temporary Entry for Business Persons." n18 Annex 1603 is composed of four parts: section A on business visitors, section B on traders and investors, section C on intra-company transferees, and section D on professionals. n19 n18 Gal-Or, supra note 6, at 380. n19, at annex 1603. "Section A ... requires the UNITED STATES, Canada and Mexico to grant temporary entry to a business person from another NAFTA party who is otherwise qualified and who seeks to engage in an occupation or profession within one of the seven categories of business activities listed in Appendix 1603.1." n20 The categories consist of the following: research and design; growth, manufacture and production; marketing; sales; distribution; after-sales service; and general service. n21 This list is nonexclusive. Thus, a business visitor may be allowed to enter for the purpose of a business not listed in appendix 1603.1 "as long as the activity is consistent with existing immigration measures applicable to temporary entry to that country." n22 n20 Schoonover, supra note 3, at 5. n21 Id. n22 Id. Although section A appears to be rather selfexplanatory, there are hidden differences within regarding treatment to Canadians and Mexicans. "Prior to the NAFTA, Canadian citizens were not required to obtain a visa for entry into the United States, not even to present a passport at the border." n23 Even today with the implementation under NAFTA, the procedures allowing Canadians to enter the United States are still relatively relaxed. n24 This is due to the fact that the provisions for Canadians under NAFTA are quite similar to the ones under the U.S.Canadian Free Trade Agreement (CFTA) regarding the movement of people. n25 In fact, "Canadians will be treated no less favorably under NAFTA than they have been treated under the FTA." n26 n23 Gal-Or, supra note 6, at 381. n24 Id. n25 United States-Canada Free Trade Agreement, Jan. 2, 1988, U.S.-Can., 27 I.L.M. 281 (1988); Ellen G. Yost, NAFTA--Temporary Entry Provisions--Immigration Dimensions, 22 CAN-U.S. L.J. 211, 215 (1996). n26 Id. Alternatively, for as far as Mexicans entering the United States, the same procedures of requiring a valid passport or visa are still strongly enforced. n27 In addition, when a professional enters the United States under NAFTA he must show that he is a citizen of either Canada or Mexico. n28 "Mexican citizens are persons who have Mexican nationality, [*671] have reached the age of 18, and have an honest means of livelihood." n29 Interestingly enough, "no definition of what constitutes a Canadian citizen appears in NAFTA." n30 Thus, the drafters made more than obvious the difference in treatment of Canadians over Mexicans. "Although the NAFTA includes Mexico in the preferential trading relationship established by the FTA, Chapter 16 does not offer Mexican citizens as easy entry to the United States as it offers Canadians." n31 One possible explanation for this inconsistency is that the U.S. negotiators were concerned about the accession clause in NAFTA, "and that any advantages given Mexicans would be available without further negotiations to citizens of countries acceding to the NAFTA in the future." n32 Another explanation scholars have mentioned is that the 1990 enactment of the amended Immigration and Nationality Act that changed U.S. immigration law makes some entries much more difficult. n33 Thus, with the implementation of the new law there was no choice for the drafters but to follow these new measures of U.S. immigration law. n27 Gal-Or, supra note 6, at 381. n28 David B. Etherington & Donna Lea Hawley, Hiring Professionals under NAFTA, IMMIGR. BRIEFINGS Feb. 1997, at 1. n29 Id. at 3. n30 Id. n31 IMMIGRATION PRACTICE AND PROCEDURE UNDER THE NORTH AMERICAN FREE TRADE AGREEMENT 2 (Janet H. Cheetham et al. eds., American Immigration Lawyers Association 1995). n32 Id. n33 Id. These differences in treatment between Mexicans and Canadians under NAFTA regarding immigration are found in various sections under annex 1603, but they do not appear to be consistent with the goals of

NAFTA according to the provisions concerning national treatment. n34 Article 301 states the following: 1. Each Party shall accord national treatment to the goods of another party ... 2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded by such state or province to any like, directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part. n35 n34 NAFTA, supra note 1, at art. 301. n35 Id. Thus, if the parties are to accord national treatment to the goods of another, then how can this be plausible if they are not according national treatment from an immigration perspective? Goods are often transported by particularly skilled people, so if the countries do not have reciprocal requirements involving the movement of people, then clearly, national treatment is not being followed. By implication, one would think this standard of treatment also applies to services since they can be seen as the goods of a country. Therefore, the provisions of chapter 16 appear to be the exception to this standard. Section B, Traders and Investors, provisions in NAFTA differ from the reference in the CFTA between Canada and the United States. The provisions in NAFTA "broaden this reference to entries to establish, develop, administer, or provide advice or key technical services to the operation of an investment to which the business person or the business person's enterprise has committed, or is in the process of committing, a substantial [*672] amount of capital." n36 A visa requirement is allowed under this section and "it is the only category which treats Canadians and Mexicans alike." n37 n36 Schoonover, supra note 14, at 1. n37 Gal-Or, supra note 6, at 381. Section C, Intra-Company Transferees, deals with individuals who are transferred within the same enterprise or its affiliate from one Party to another. n38 A Party may require that such business person shall have been employed continuously by the enterprise for one year within the three-year period immediately preceeding the date of the application for admission." n39 The United States maintains this requirement, but Canada and Mexico have chosen to drop it, n40 which focuses on the national treatment concept mentioned previously. In addition, there is an optional visa requirement, but both Canadian and Mexican employers must file a petition. However, "the Canadians are spared one step in the processing procedure compared to the steps required from a Mexican applicant." n41 Canadians are allowed to present their petition at a Class A port of entry with their own intra-company transferee application. n42 "This one-step processing greatly expedites the procedure for the petitioning employer." n43 In contrast, a Mexican national must process his employer's petition "through one of the four INS regional service centers [where it] typically takes three to four weeks." n44 Thus, the theme in moving people by not abiding by national treatment continues in section C. n38 Id. n39, supra note 1, at art. 1. n40 Gal-Or, supra note 6, at 373. n41 Id. n42 Gerald A. Wunsch, Why NAFTA's Immigration Provisions Discriminate Against Mexican Nationals, 5 IND. INT'L & COMP. L. REV. 127, 133 (1994). n43 Id. n44 Id. Section D consists of professionals known as the TN ("Trade NAFTA") category. n45 The appendix contains a list of sixty-three professions with minimum educational credentials and "only persons coming to work 'in' one of these enumerated professions may be accommodated under the TN category." n46 Section D states that no Party to NAFTA may require prior approval procedures, petitions, labor certification tests, or other procedures, or impose or maintain any numerical restriction relating to the temporary entry of Section D professionals under NAFTA. n47 "However, Section D [as with other Sections] preserves the right of a Party to impose a visa requirement on professionals of another Party," ... in addition, "unlike the other sections of Annex 1603 ... Section D allows a Party to establish an annual numerical limit with regard to professionals of another NAFTA Party." n48 n45 Schoonover, supra note 3, at 4. n46 Vasquez-Azpiri, supra note 2, at 809. n47 Wunsch, supra note 42, at 134. n48 Id. One can easily note the obvious contradictions just within this section. Canadians can apply for this status when entering the country "without any prior petition or visa approval" just as they could under the CFTA. n49 Mexicans, on the other hand, have [*673] to meet the same requirements as other professionals under the H - 1B status, such as obtaining a labor certification from the DOL and following routine INS procedures. n50 Canadians entering under TN status can work

for a U.S. employer or entity or a foreign employer that provides "prearranged services to a U.S. entity." n51 However for Mexicans entering under TN status, they may enter for work with a U.S. employer. n52 In addition, "NAFTA establishes an annual numerical cap on Mexican TN admissions ... [such that] only 5,500 Mexican TN's will be admitted each year for a ten-year period, although the number may be increased by agreement of the U.S. and Mexican governments." n53 These contradictions are stated within an order to "allow" this disparate treatment between Canadians and Mexicans. "The TN application process for Mexican professionals is far more complex and costly than for Canadian professionals, creating a chilling effect that has held down the number of TN petitions filed by Mexican citizens." n54 n49 Schoonover, supra note 3, at 4. n50 Id. n51 Etherington, supra note 28. n52 Id. n53 1 Immigr. Law & Bus. 2.76 (2001). n54 Etherington, supra note 28. Scholars comment that this difference in treatment of Canadians and Mexicans throughout annex 1603 is a result of the tightening needed on Mexican immigration to the United States. n55 For example, the premise underlying NAFTA's annual approval limit of 5,500 petitions for Mexican TN nationals is that this quota is needed to prevent a flood of cheap labor from entering the United States to compete with degreed professionals ... NAFTA's contrary premise is that labor conditions in Canada are so favorable compared to the United States that we need not concern ourselves about the entry of a horde of degreed professionals from the North. n56 n55 See Schoonover, supra note 3, at 4. n56 Wunsch, supra note 42, at 141. Both of these premises appear to be false. During the first six months of NAFTA zero applications for Mexican nationals for TN status were approved, and when looking at the acceleration rate of Canadians under the CFTA, "there is every reason to expect that they will continue an accelerating exodus to the United States under NAFTA." n57 But even if these premises are not exactly accurate, a need to tighten Mexican immigration remains a likely influence. However, this difference does not follow the national treatment standard as expressed so clearly in NAFTA. n57 Id. Besides the differences in treatment within each category, the TN category encounters various problems of its own in NAFTA. The TN category's purpose was to facilitate cross-border movement of people between the NAFTA countries; however, the "TN category is not functioning as effectively as it could or should." n58 "The unqualified boon to cross-border labor mobility between the U.S. and Canada promised at the inception of the NAFTA has never materialized, and what we have today is a needlessly complicated admission system that is fraught with pitfalls, and often arbitrarily implemented, and continues to produce an unacceptably high number of denials of application by [*674] admissible professionals." n59 One of the difficulties lies in that the INS has trouble recognizing software engineers as "engineers" under the TN category. n60 The INS believes that the degree or license held by the applicant for admission must be identical to the field "or even relevant to the profession in which admission is sought." n61 INS officials seem to insist on matching up degree to profession almost exactly, which in turn inhibits the movement of people and trade under NAFTA. n62 For example, one can see the problems that arise for a computer software engineer holding a degree in computer science when previous versions of the Occupational Outlook Handbook correlated degrees in computer or electrical engineering for computer engineers and degrees in computer science for computer scientists. n63 There have been positive changes made correcting this confusion concerning software engineers with computer science degrees, n64 but recently "a trend among INS offices at the Canadian border to deny TN applications for software engineers with computer engineering degrees has emerged." n65 The reason for these denials appears to be an opinion of multiple INS officers that, "in accordance with the prescriptions of the Occupational Outlook Handbook, persons with computer engineering degrees are more appropriately classified under NAFTA as Hardware Engineers or Computer Systems Analysts than as Software Engineers." n66 As one can see, there are various problems between the rigid immigration rules and the push to allow free movement of people for labor-mobility. n58 Vasquez-Azpiri, supra note 2, at 818. n59 Id. n60 Id. at 810. n61 Id. at 811. n62 Id. at 811-12. n63 Id. at 812. n64 Id. n65 Id. n66 Id. Clearly, these tensions between U.S. immigration and NAFTA are not welcomed by the other NAFTA countries. An author in

THE ECONOMIST in 2000 noted the following: The contradictions in America's immigration laws are becoming increasingly awkward to live with. Canada is getting cross with a partner who insists on ever freer trade but keeps on erecting barriers at its frontier. Some people ask whether a trade block need necessarily involve the free movement of labor as well as that of capital and goods. n67 n67 Id. at 81819. Regarding the TN entry problem, some believe the fault lies with the INS officers "who lack adequate training, and whose principal motivation, arguably in violation of Article 1602 of NAFTA, is not to promote the free flow of services, but misunderstanding or ignoring NAFTA's basic function of providing temporary labor mobility rather than facilitating immigration to protect the U.S. work force." n68 n68 Id. at 820. Finally, what is another country to do in reaction to such "trade barriers?" Unfortunately, there is not a specific dispute resolution provision within Chapter 16 of NAFTA. n69 "When faced with a Party's refusal to grant temporary entry, another Party may not [*675] invoke the NAFTA's overall dispute settlement provisions unless it can demonstrate that the denial arises out of a pattern of repeated practices and that the business person has exhausted available administrative remedies." n70 Therefore, it is not easy to resolve these tensions and contradictions within the rules of NAFTA. n69 Ellen Ginsberg Yost, Immigration Provisions of the North American Free Trade Agreement, 515 PLI/LIT 9, 39 (1994). n70 Id. at 39-40. When these tensions of national treatment and contradictory actions taking place at the border rise to the surface, many people brush them aside and reiterate that NAFTA "did not seek to harmonize their immigration regimes or to create a common labor market or passport union" n71 such as the European Union did. This argument is an easy way to dismiss the inconsistencies and problems with immigration under NAFTA. Although NAFTA does not have the same goals as a common labor market, the goals it states within the agreement must be clear and recognized in practice. Even if the actual immigration procedures were never meant to be harmonized, one would think that the basic goals among the NAFTA countries should be harmonized. Canada is more interested in, and hence committed to, using immigration as a strategy to invite human capital and attract talent. Unlike the UNITED STATES, where size and prosperity foster a sense of economic self-sufficiency, Canada realizes that, in an increasingly competitive global economy, it is impossible to have free trade without the companion movement of people. n72 n71 IMMIGRATION PRACTICE AND PROCEDURE UNDER THE NORTH AMERICAN FREE TRADE AGREEMENT, supra note 31, at 3. n72 Asher Frankel & Gary Endelman, Go North Young Man, Go North: Working Temporarily in Canada from an American Perspective, 77 No. 3 INTERPRETER RELEASES 73, 87 (2000). The United States does not appear to need this influx of people as much as Canada, but they are both part of a free trade agreement and thus need to find a way where the restrictions on the movement of people do not become a barrier to trade. For example, "while accepting employment-based immigration, the UNITED STATES does not seek to encourage it or endow it with the integrity that is its only enduring justification ... [but] Canada needs, even invites, temporary employment from abroad to a far greater extent than the UNITED STATES" n73 NAFTA is a free trade agreement and differences are allowed. But differences that inhibit trade should be addressed. United States Immigration discussions were not a focus during the negotiations of NAFTA and, although they are a material part of NAFTA's everyday existence, they still do not seem to be a focus. Reforming the TN visa is critical its the only way to ensure an effective free trade regime McGehee 2 (Melinda, JD from Dedman School of Law, Using Immigration as a Protectionist Mechanism While Promoting Free Trade, Using Immigration as a Protectionist Mechanism While Promoting Free Trade, 8 Law & Bus. Rev. Am. 667, Fall, Lexis) So where is the solution? It appears from the various agreements trying to extend the borders in the EU, in the hopes of economic and social integration, that the Member States have found many more problems than expected. Thus, from using their experience, open and free borders within the NAFTA countries are not a reasonable solution to address the underlying differences between those countries. Rather, NAFTA itself is a reasonable solution. The Treaties of the EU have established an open system

allowing for the free movement of people, while NAFTA has been much more restrictive in its approach, but much more effective for the purposes of free trade including the movement of people. NAFTA and its conservative approach is a useful tool in "addressing" immigration (even if implicitly), as long as it is used correctly. As stated previously, many believe that NAFTA has been used to stop, or at least reduce, the flood of illegal Mexican immigrants into the United States. Therefore, such motives would explain the discrepancies that exist within NAFTA between Canada and Mexico. But NAFTA needs to start being used as a more persuasive tool. NAFTA is already such a strong and powerful instrument within other areas of trade that in chapter 16 it needs to carry this attitude as well. For example, article 1601 of chapter 16 notes the importance of ensuring border security and protecting the domestic labor force-along with promoting free trade. n129 Therefore, instead of furthering this contradiction throughout the rest of the chapter and annexes, NAFTA should be consistent and fair in order to justify it. n129, supra note 1, at chap. 16, art. 1601. Annex 1603 addresses the four categories of people who are qualified to move between the borders under NAFTA. As mentioned previously, there are constant contradictions between the treatment of Canadians and Mexicans. Now that the issue of [*683] immigration has become even more prevalent and NAFTA has already been passed, representatives from the NAFTA countries should meet to resolve these discrepancies. The answer need not be in the form of the EU's provisions, but it should be clear and uniform. These ambiguities and inconsistencies not only hurt the strength and effectiveness of chapter 16, but also further the social divide between Mexicans and Americans, n130 which in turn only contributes to the problems such as illegal immigration that NAFTA is trying to reduce. n130 Johnson, supra note 117, at 126. In detail, NAFTA should reevaluate the provisions located in annex 1603 in a fair and uniform manner. As long as restrictions are consistent, free trade can be effective and uninhibited by immigration obstacles. Since Mexico is presumably a part of this preferential trading relationship under NAFTA, the process for Mexicans to enter the United States under NAFTA needs to be more parallel with the process Canadians endure. As long as the restrictions are upheld and the guidelines for each qualified section within annex 1603 are met, then the inherent goal of chapter 16 to protect the sovereign would remain intact and free trade would actually be furthered under the National Treatment standard used throughout NAFTA. "Congress recognized the difficulty of trying to stem the flow of illegal migration through unilateral action and concluded that close consultation and cooperation with Mexico and Canada were essential." n131 Such close consultation and cooperation are needed in NAFTA. n131 Yost, supra note 25, at 222. Therefore, NAFTA is in need of many modifications in order to be used effectively for the movement of people. Additional visa requirements for Mexicans under sections A and D should be amended similar to those in place for the Canadians. If the Mexican national meets the requirements to enter under the particular category, why is there an additional obstacle? At this level, the person is a Mexican professional, not one that can be generally equated with the stereotypical illegal immigration problem. And the numerical cap within the TN category also involves Mexican professionals. If the Canadian professionals and the Mexican professionals are judged by the same standards, then why should there be a cap on one and not on the other? The additional processing requirement for Mexicans under section C also seems excessive. At this point the Mexican and the Canadian alike both have their petition signed by their employer to be transferred within the company. The Canadian is able to process the petition right there at the border while the Mexican has to wait weeks while it is processed in a regional INS Center. Additional procedures such as this one do not seem to have any purpose, but for delaying the Mexican national. When such restrictions are in effect, then free trade is inhibited. These are examples of when protective restrictions are used incorrectly. Continuing with section D, clearly, in order for the TN category to work effectively, INS inspectors at border crossings need to be informed of the latest group of professionals considered to be a part of the category. The problems Canadians have been facing with their degrees not exactly matching with their qualified jobs should not be occurring. Computer software engineers not being admitted because their profession is questionable as an engineer is ridiculous. Once

again, this is an example of a restriction, imposed for the purpose of granting entry to a limited category, which is not being used correctly and thus inhibits trade. [*684] V. Conclusion Therefore, what this paper proposes is an enhanced NAFTA. It does not appear that the EU knows the best way to handle the movement of people. The Treaties of the EU have granted almost absolute freedom of the movement of people, which looks ideal, but causes many problems that have been discussed within. Some amount of control needs to be maintained, but the ultimate question is how much and how evenly spread should the control be among the various parties. "In an era when states are ever more eager to cooperate with each other to achieve economic integration by lowering trade barriers and relaxing controls over crossborder economic exchange, some are intensifying their efforts to police cross-border flows of persons." n132 Such efforts to guard or police borders do not have to inhibit trade as long as the methods are used correctly with the purpose of protecting borders and allowing professionals to cross the various borders in order to further the goal of free trade under NAFTA.

Mexicans dont like NAFTAthey 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, "Anti-immigration 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 then-President 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

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
held by Americans." 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

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
to the PRI.

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 Jurez, 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 one-eighth 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

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
House pique will fade. -- 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 quasi-governmental 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

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
would require, among other things, a dramatic democratic reform of Mexico's corrupt and inefficient public sector. 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 dont like NAFTAmaize prices rising Bury 04 [Scott Bury. Teacher and writer. Maize farmers unhappy with NAFTAs price. Winter of 2004. http://www.cec.org/Page.asp?PageID=122&ContentID=2522&SiteNodeID=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 Inter-Hemispheric 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 othersmaize in particularhave 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 saysit also signifies the preservation of the rural cultural identity of Mexico.

Nafta Good
Your NAFTA bad evidence is wrong: six reasons
Becker 11Thomas H. Becker is an economic development authority and management trainer specializing in Latin America. He has lived,
operated businesses, or worked in 16 Latin American countries, and currently serves as advisor to government agencies, private businesses, universities, and NGOs. His academic background includes degrees in Latin American American Studies and a Ph.D. in International Business. He has served on the Business faculty of five universities in the U.S. and Latin America, has written over 100 articles and book chapters in English and Spanish, and is a former President and Managing Director of the Business Association of Latin American Studies. [Becker, Thomas H.Doing Business in the New Latin America: Keys to Profit in Americas Next-Door Markets2nd Edition. Pg. 50-52]//MM

NAFTA Entering into effect in 1994, by 2002 the North American Free Trade Agreement had almost tripled U.S.-Mexico trade, had made both countries more competitive internationally,19 and had propelled Mexico's economy into a world-class manufacturing and assembly powerhouse. By 2008, more than $1 billion of duty-free exports and imports were crossing the Mexico-U.S. border every single day. Still, NAFTA sparked controversies in both countries,20 spawning countless myths in the process. But some of the more widespread myths are contradicted by facts that are too plain to be misunderstood: Myth No. 1: NAFTA has cost the United States jobs. Fact: U.S. employment rose from 110.8 million people in 1993 to 137.6 million in 2007, an increase of 24 percent. The average unemployment rate was 5.1 percent during the post-NAFTA period 1994-2007, compared to 7.1 percent during the pre-NAFTA period 1980-1993.21 Myth No. 2: NAFTA has hurt the U.S. manufacturing base. Fact: U.S. manufacturing output rose by 58 percent between 1993 and 2006, as compared to 42 percent between 1980 and 1993.22 Myth No. 3: NAFTA has suppressed U.S. wages. Fact: U.S. business sector real (i.e., adjusted for inflation) hourly compensation rose by 1.5 percent each year between 1993 and 2007, for a total of 23.6 percent over the full period. During 1979-1993, the annual rate of real hourly compensation rose by 0.7 percent each year, or 11 percent over the full 14-year period.23 Myth No. 4: NAFTA has reduced wages in Mexico. Fact: Mexican wages grew steadily after the 1994 peso crisis, reached precrisis levels in 1997, and have increased each year since. Several studies conclude that Mexican industries that export or that are in regions with a higher concentration of foreign investment and trade also have higher wages.24 Myth No. 5: NAFTA has done nothing to improve the environment. Fact: NAFTA created two binational institutions that certify and finance environmental infrastructure projects to provide a clean and healthy environment for residents along the U.S.-Mexico border. To date, they have provided nearly $1 billion for 135 environmental infrastructure projects with a total estimated cost of $2.89 billion and allocated $55.1 million in assistance and grants for over 450 other border environmental projects. The Mexican government has also made substantial new investments in environmental protection, increasing the federal budget for the environmental sector by 81 percent between 2003 and 2008.25 Myth No. 6: NAFTA has made Mexico's poor farmers poorer. Fact: Based on three independent studies, the World Bank concludes that the decline of Mexican corn prices was a long term trend that preceded NAFTA, andgovernment producer-price subsidies actually kept such prices above what would have been the case under NAFTA without domestic price subsidies.26

NAFTA is fine nowall three countries are benefiting

Kapenda 09

[Simon Kapenda. Economist and entrepreneur. NAFTA, the Good, the Best, and the Ugly for the Americas.

Each of the NAFTAs 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
http://princesimon.wordpress.com/2009/02/05/nafta-the-good-the-best-and-the-ugly-of-the-free-trade/. February 5, 2009.//SRSL]

has transformed and modernized Mexicos vibrant economy by successfully boosting trade and investment flows. Within just a few years, Mexicos 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 Canadas 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 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 Amricas-Puebla, 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 NAFTA countries has 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 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.

Their indicts are wrong and more integration solves Pastor, 04 Robert A., Robert A., Professor at and Founding Director of the Center for North American Studies at American University (No rth America's
Second Decade, Foreign Affairs, Jan/Feb 2004) A FIRST DRAFT The North American Free Trade Agreement (NAFTA)

went into effect on January 1, 1994, amid fears of job loss in the United States and cries of revolution in the south of Mexico. Yet, in a single decade, the three nations of North America have built a market larger than, and almost as integrated as, the 15-nation European Union. Trade and investment have nearly tripled, and the United States, Mexico, and Canada have experienced an unprecedented degree of social and economic
integration. For the first time, "North America" is more than just a geographical expression. In 2000, the election victories of George W. Bush, Vicente Fox, and Jean Chretien raised hopes still further that the promise of a trilateral partnership might be fulfilled. Four years later, however, relations among the three governments have deteriorated. No leader refers to "North America" in the way that Europeans speak of their continent. Indeed, anti-NAFTA name-calling has surfaced again in debates among U.S. presidential candidates. After ten years, it is time to evaluate what NAFTA has accomplished and where it has failed and to determine where it

should go from here. What should be the goals for North America's second decade, and what must North American leaders do to achieve them? NAFTA

was merely the first draft of an economic constitution for North America. It was a deliberately lean document, intended only to dismantle barriers to trade and investment. Its architects planned neither for its success nor for the crises that would confront it. Although NAFTA fueled the train of continental integration, it did not provide conductors to guide it. As a result, two setbacks -- the Mexican peso crisis of 1995 and the terrorist attacks of September 11, 2001 -- have threatened to derail the integration experiment. The peso crisis was a blow to the Mexican economy and to U.S. and Canadian faith in
integration. NAFTA's authors had assumed that eliminating restrictions on the movement of capital and goods would, by dint of the market's magic, lead to unalloyed prosperity. No clause in the agreement established a mechanism to anticipate or respond to market failures. Whereas the EU had created too many intrusive institutions, North America made the opposite mistake: it created almost none. The second shock to the North American body politic occurred on September 11, 2001. If a true partnership had existed, the leaders of the United States, Mexico, and Canada would have met in Washington in the days after the tragedy to declare that the attack was aimed at all of North America and that they would respond as one. Instead, in the absence of common institutions, the governments reverted to old habits. Acting unilaterally, Washington virtually closed its borders; Mexican and Canadian leaders responded ambivalently, afraid of how the angry superpower would react. Both events signify missed opportunities. The establishment of the U.S. Department of Homeland Security places North America once again at a crossroads. One course -- the more likely one -- would strengthen border enforcement and impede movement, even by friends. Trade and investment would decline, tensions would rise, and the myriad benefits of integration would begin to recede. In an alternative course, however, security fears would serve as a catalyst for deeper integration. That would require new structures to assure mutual security, promote trade, and bring Mexico closer to the First World economies of its neighbors. Progress can occur only with true leadership, new cooperative institutions, and a redefinition of security that puts the United

From its outset, NAFTA was subjected to blistering criticism, often based on outlandish predictions. U.S. presidential candidate Ross Perot warned of a
States, Mexico, and Canada inside a continental perimeter, working together as partners. EVALUATING NAFTA "giant sucking sound" -- jobs leaving the United States for Mexico. Mexicans and Canadians, meanwhile, feared that their economies would be taken over by U.S.

Few of these prophecies have been borne out. The United States experienced the largest job expansion in its history in the 1990s. Although both Mexico and Canada attracted considerable new U.S. investment (since NAFTA gave them privileged access to the U.S. market), the percentage of U.S.-owned companies in each country did not increase. (In fact, Canadian investment in the United States grew even faster than did U.S. investment in Canada.) In Mexico, income disparity did worsen, but only because those regions that do not trade with the United States grew much more slowly than those that do; the problem was not NAFTA, but its absence. Environmental standards in Mexico have actually improved faster
companies. Opponents predicted that free trade would erode environmental and labor standards in the United States and Canada. than those in Canada and the United States, and Mexico's 2000 election was universally hailed as free and fair. And although Mexico and Canada became more dependent on the U.S. market, as opponents of integration warned, the reverse also happened: U.S. trade with its neighbors grew roughly twice as fast as did its trade with the rest of the world. By 2000, in fact, the United States imported 36 percent of its energy from its most important trading partners -- Canada and Mexico -- and exports to its neighbors were 350 percent greater than exports to Japan and China and 75 percent greater than exports to the EU. So much has been

it is easy to forget that it was simply an agreement to dismantle most restrictions on trade and investment over the course of ten years. With a few notable exceptions -- such as trucking, softwood, lumber, and sugar -- where U.S. economic interests have prevented compliance, the agreement largely succeeded in what it was intended to do : barriers were eliminated, and trade and investment soared. In the 1990s, U.S. exports to Mexico grew fourfold, from $28 billion to $111 billion, and exports to Canada more than doubled, increasing from $84 billion to $179 billion. Annual flows of U.S. direct investment to Mexico, meanwhile, went from $1.3 billion in 1992 to $15 billion in 2001. U.S. investment in Canada increased from $2 billion in 1994 to $16 billion in 2000; Canadian investment flows to the United States grew from $4.6 billion to $27 billion over the same period. Travel and immigration among the three countries also increased dramatically. In 2000 alone, people
attributed to NAFTA that crossed the two borders 500 million times. The most profound impact came from those people who crossed and stayed. The 2000 census estimated that there were 22 million people of Mexican origin in the United States, about 5 million of whom were undocumented workers. Nearly two-thirds of these have arrived in the last two decades. North America is larger than Europe in population and territory, and its gross product of $11.4 trillion not only eclipses that of the EU (and will even after the EU expands to 25 nations in May 2004) but also represents one-third of the world's economic output. Intraregional exports as a percentage of total exports climbed from around 30 percent in 1982 to 56 percent in 2001 (compared to 61 percent for the EU). As in the auto industry -- which makes up nearly 40 percent of

Both industries and companies have become truly North American. But although NAFTA has successfully increased trade and investment, it has failed to confront some of the major challenges of integration. This failure has not only harmed the three countries, it has also seriously undermined support for the agreement, thus preventing North America from seizing opportunities for further progress. First, NAFTA was silent on the development gap between Mexico and its two northern neighbors, and that gap has widened. Second, NAFTA did not plan for success: inadequate roads and infrastructure cannot cope with increased traffic. The resulting delays have raised the transaction costs of regional trade more than the elimination of tariffs has lowered them. Third, NAFTA did not address immigration, and the number of undocumented workers in the United States jumped in the 1990s from
North American trade -- much of this exchange is either intraindustry or intrafirm. 3 million to 9 million (55 percent of whom came from Mexico). Fourth, NAFTA did not address energy issues, a failure highlighted by the catastrophic blackout that Canada and the northeastern United States suffered last August. Fifth, NAFTA made no attempt to coordinate macroeconomic policy, leaving North American governments with no way to prevent market catastrophes such as the Mexican peso crisis. Finally, NAFTA did nothing to address security -- and as a result, the fallout from September 11 threatens to cripple North American integration.

NAFTA doesnt hurt agribusiness exports have increased more than imports
Weintraub 4 holds the William E. Simon Chair in Political Economy at CSIS and is simultaneously director of the Americas Program at the
center (Sidney, Trade, Investment, and Economic Growth, from chapter 1 of NAFTAs Impact on North America: The First Decade, edited by Sidney Weintraub, published 2004, CSIS)//ER

"The problem of rural poverty cannot be attributed to NAFTA but must be attacked in the very structure of Mexico's agricultural sector. In fact, Mexicos agricultural exports, including processed foods, within NAFTA grew by 9.4 percent a year between 1994 and 2001, whereas agr0-food imports grew by a lower amount of 6.9 percent a year. The composition of the export and import growth has not had the same effect on different products and on the various regions of the country where the products are grown and cultivated; some regions have benefited, others have suffered.

Their problems werent caused by NAFTA

Becker 11Thomas H. Becker is an economic development authority and management trainer specializing in Latin America. He has lived,
operated businesses, or worked in 16 Latin American countries, and currently serves as advisor to government agencies, private businesses, universities, and NGOs. His academic background includes degrees in Latin American American Studies and a Ph.D. in International Business. He has served on the Business faculty of five universities in the U.S. and Latin America, has written over 100 articles and book chapters in English and Spanish, and is a former President and Managing Director of the Business Association of Latin American Studies. *Becker, Thomas H.Doing Business in the New Latin America: Keys to Profit in Americas Next-Door Markets2nd Edition. Pg 52]//MM

Myth No. 6: NAFTA has made Mexico's poor farmers poorer. Fact: Based on three independent studies, the World Bank concludes that the decline of Mexican corn prices was a long term trend that preceded NAFTA, andgovernment producer-price subsidies actually kept such prices above what would have been the case under NAFTA without domestic price subsidies.26