‘Free trade and investment agreements are tools for the “deviation of power” away from communities and into corporate boardrooms. This is what the experience of people in Mexico teaches us.’ This is the conclusion of a new report by GRAIN, a small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems.
Main image: Day labourers harvesting celery in northwest Mexico. Photo: Jerónimo Palomares
As the Mexican government prepares to finalise the updated EU-Mexico free trade deal, a new version of the disastrous EU-Mexico FTA of 2000, it’s time to look back and reflect on the true nature of FTAs, tools that divert power and that are imposed on us, country after country, in secrecy and in disregard of the population.
The North American Free Trade Agreement (NAFTA) – signed by Canada, Mexico and the US – was the first free trade deal negotiated outside the multilateral trading system (GATT/WTO). It came into effect in 1994, and quickly became “the model” for all others.
NAFTA was devastating for Mexicans: it deepened the loss of food sovereignty to cheap imports, it aggravated the privatisation of seeds, the loss of land and livelihoods, it increased crime, migration and pollution, it undermined labour rights, and more.
In the midst of this, Mexicans learned one overarching lesson: that free trade agreements modify and dismantle laws, regulations and legal processes in order to enable corporations to operate freely. This “deviation of power” is their main function.
To enter NAFTA, Mexico offered “comparative advantages”, like the loosening of labour conditions and almost all environmental regulations. The result? The rise of the maquiladora or sweatshop economy and the expansion of transnational supply chains, which now account for 30-60% of all global trade. Despite promises of “wage convergence” and “modernisation” of labour rules under the revised NAFTA (called the United States-Mexico-Canada Agreement), the disparity of working conditions between Mexico and its neighbours to the north is enormous.
Parts of Mexico’s Constitution that defended community rights were changed through NAFTA. Laws were also changed to privatise land through individual titling and to allow foreigners to purchase collectively-held territories. Communities resisted, but migration to the US soared as a result of land grabbing by mining, farming and energy companies, and the violence that this unleashed. NAFTA-mandated changes to Mexico’s seed law turned what Indigenous and rural peoples had been doing for millennia – caring for, improving, multiplying and sharing their seeds – into a crime, just for the benefit of the global seed industry.
NAFTA also created new rights for companies to challenge Mexico’s domestic laws and regulations, while dispute settlement moved from public courts to private arbitration.
After 28 years of operation, and after dissecting NAFTA’s effects through years of collective reflections such as the 2011-2014 Permanent People’s Tribunal, there is strong evidence to confirm that trade and investment agreements are tools for the “deviation of power” away from communities and into corporate boardrooms. This is what the experience of people in Mexico teaches us.