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Wednesday, 18 April, 2001, 14:40 GMT 15:40 UK
Mexico: Trade in the shadow of Big Brother
Mexico City skyline
Critics say Nafta has led to more exploitation
By the BBC's Mexico and Central America Correspondent, Peter Grest.

Mexican truck drivers are angered that despite numerous rulings by the World Trade Organisation against the United States, American restrictions still deny the Mexicans from crossing the border to deliver the benefits of global trade direct to the vast North American market.

The US-Mexico relationship is a bit like the elephant and the flea

Mexican economist Jonathan Heath
The dispute is one of the sorest points in relations between Mexico and the United States since the North American Free Trade Agreement (Nafta) came into effect in 1994.

The agreement commits the two neighbours and Canada to eliminate tariff barriers completely over several years, and allows a virtually uninterrupted flow of goods and services across the border.

And it is now seen as a model for a broader Free Trade Agreement in the Americas which could open up trade from Alaska to Tierra del Fuego.

But opposition from US drivers has effectively blocked small operators like Juan Pablo from fulfilling the spirit of the agreement.

"They talk about free trade and open borders," Juan Pablo spits with barely concealed anger. "But that's just as long as it benefits them."

Unbalanced partnership

US unions like the Teamsters argue that Mexico has lower standards for its drivers and trucks, and that it would be dangerous to allow them to drive through the US.

Zapatista Subcomandante Marcos
Subcommandante Marcos accused the Mexican government of being "money obsessed"

The Mexicans insist that is just plain old US protectionism - that Uncle Sam cannot stomach genuine competition when it undercuts its own industries.

"You've got to realise that the US-Mexico relationship is a bit like the elephant and the flea," said Mexico City economist Jonathan Heath.

"They matter hugely to us - the US swallows 90% of our exports. But although we're now the second most important trading partner behind Canada, we're just a blip on their horizon in overall terms."

That unbalanced partnership has made Washington often seem like a big bully to Mexicans, throwing its disproportionate weight around to bend the rules in its favour.

But Heath insists Nafta has worked to Mexico's benefit.

"It is still frustrating dealing with the bully, but it was more difficult prior to Nafta. We've now got a trade dispute mechanism which isn't perfect and which still could be improved, but its something that is much better than anything we had before," he said.

And the Mexican government agrees. It insists that the country has benefited hugely from Nafta - both exports and imports have increased more than 300% over the past ten years, and almost all that is thanks to the deal.

It has encouraged unprecedented development along the border regions; unemployment is down, exports are up and the macro-economic figures look good.

Rebel objection

That alone has made many of Mexico's neighbours look enviously on the deal, but it has its fierce critics.

Among them are the Zapatista rebels who launched their uprising on New Year's Day in 1994 - the day the Nafta agreement went into effect.

The Zapatistas argue that the focus on statistics ignores the fact that the agreement has fundamentally changed Mexican culture.

The guerrilla movement says it began its rebellion to fight for greater rights for the nation's indigenous people, who've been marginalised by an increasingly globalised economy.

The rebel commander Subcommandante Marcos accused the Mexican government of being "money obsessed" and of wanting to turn the jungles of Chiapas into a homogenous world of strip malls and plastic play parks.

"In a country run by economists with only figures in their eyes, how can indigenous cultures survive without a money value?" asked one Zapatista supporter.

Exporting exploitation

Other critics say NAFTA might have helped reduce unemployment, but its forced millions of poor Mexicans to work in US-owned sweatshops.

The Americans, they say, have simply exported exploitation.

"Part of the process of opening up your economy is coming to terms with these problems," say Jonathan Heath.

"You simply can't expose your local industries to a giant like the United States without getting the local legislation right in the first instance. Unless you can create the right legal framework, entire industries will vanish and your country could be swamped by the bigger economy."

"But I think that on balance, we've done pretty well out of the United States," he said.

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