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Last Updated: Wednesday, 9 November 2005, 22:59 GMT
Mexico fails to profit from Nafta deal
By Richard Collings
BBC World Business Report, in Mexico City

Diego Rivera mural at National Palace in Mexico City
Diego Rivera murals adorn the walls of the National Palace
The idea was to have a free trade area stretching from Alaska to the South Pole - but could it ever happen?

Just this week passions in the Americas have spilled over into anger about whether free trade benefits the poorest at all?

It has been 12 years since Mexico joined the United States and Canada to create a huge single market for goods and services.

Some want to go further than the North American Free Trade Agreement (Nafta) while others want to dig its grave.


There are questions over whether Nafta has delivered on its promises and lifted millions of Mexicans out of poverty.

Nafta's record has been very much under the spotlight over the past few days as Latin American heads of state have been meeting in Argentina to discuss enlarging the trade pact.

Some of the leaders want to move forward with very ambitious plans to create a massive free trade area stretching from Alaska to the South Pole.

But not everyone agrees this would be a good thing.

The Venezuelan president, Hugo Chavez, made his views known when he said: "Together we lift our spades and bury the idea of a larger free trade area once and for all."

But the Mexican government thinks differently.

In the centre of Mexico City there are a series of large murals painted by the world famous Mexican artist Diego Rivera.

They show the produce that Mexico has given to the world - things such as maize, cocoa, tobacco, pineapple and even chicle - the main ingredient of chewing gum. When these were painted in the 1930s they depicted the bright hopes of Mexico and its potential wealth.

That was a golden age for the country.

The same for 40 years

But looking around you can see that the reality is a world away from the optimism seen in those paintings.

Nearby is a line about 20 or 25 unemployed people holding pieces of paper saying what their professions are - one is a carpenter, another a plumber.

children in slum alley in Mexico City
Many Mexicans still live in poverty

They are all looking for work, hoping that somebody will come by and take them on.

One of them says: "People come to look for us here but even so, there's not much work. This is still the best place for us to find something."

Another says: "It's difficult. Sometimes we get work for four days in a month, sometimes it's a week. It's been the same for the last 40 years or so."

They may be unemployed, but at least they stand a chance of finding work, albeit not every day.

Aron plays a small barrel organ in the street to earn a living from passing tourists.

He doesn't own the instrument - he rents it for 60 pesos a week, or about $6. But, apart from the tourists, most Mexicans just don't have the money to give him.

"Life is not so good. We expected much more from the free trade agreement. The other two countries are great powers and we should be seeing more benefits from this association. None of the benefits flow down to the poor," he says.

At night Aron studies to be an electrician but plays the organ to get by, like the man playing a violin a few feet away while his children beg for money.


When I asked Larry D Rubin, the head of the American Chamber of Commerce in Mexico, why the country hadn't seen more benefits of the free trade agreement with the US and Canada, he said the western hemisphere needs to get as competitive as the European Union.

When that happens, "Aron could be highly employable in any US or Mexican firm," he says.

Many Mexicans think they have a better chance of employment if they cross the border to work in the US, but Mr Rubin advises against that.

"It's very dangerous to cross the border illegally. Crossing the border implies certain death for many Mexicans ever single day and every month," he says.

section of Diego Rivera mural
One of Rivera's best-known murals is called Pan America

But Mr Rubin concedes that if Aron was legalised, there would definitely be opportunities in America but adds: "I think there are a number of opportunities he can explore in Mexico and there is no need for him to go to a different country where there is a completely different culture."

He believes that organisations such as the American Chamber of Commerce need to influence Congress so there can be structural reforms to enable companies from America, Europe and elsewhere, to invest more in Mexico and create more opportunities.

The recent summit didn't bring the clear-cut announcement of free trade from Alaska to the South Pole that some had hoped for.

Many US companies have already invested in Mexico and the Americans want to expand the free trade area.

They want what has happened in Mexico to be replicated throughout Latin America.

But all that seems a pipe dream at the moment. It might be some time before the likes of Aron find the employment opportunities they are seeking.

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