Trinational Elites Map North American Future in "NAFTA Plus"

Articles

By Miguel Pickard, International Relations Center, August 24, 2005

http://americas.irc-online.org/am/386

“I would like you [of the press] to understand the magnitude of what this means. It is transcendent, it’s something that goes well beyond the relationship we have had up to now.” —President Vicente Fox, regarding NAFTA Plus, onboard the presidential plane returning to Mexico from George W. Bush’s Crawford ranch, March 2005.1

NAFTA (North American Free Trade Agreement) has been in effect almost 12 years and a new stage, NAFTA Plus, is in the works, referred to as “deep integration,” particularly in Canada. The elites of the three NAFTA countries (Canada, the United States, and Mexico) have been aggressively moving forward to build a new political and economic entity. A “trinational merger” is underway that leaps beyond the single market that NAFTA envisioned and, in many ways, would constitute a single state, called simply, “North America.”

Contrary to NAFTA, whose tenets were laid out in a single negotiated treaty subjected to at least cursory review by the legislatures of the participating countries, NAFTA Plus is more the elites’ shared vision of what a merged future will look like. Their ideas are being implemented through the signing of “regulations,” not subject to citizens’ review.

This vision may initially have been labeled NAFTA Plus, but the name gives a mistaken impression of what is at hand, since there will be no single treaty text, no unique label to facilitate keeping tabs. Perhaps for this reason, some civil society groups are calling the phenomenon by another name, the Security and Prosperity Partnership of North America (SPPNA) , an official sobriquet for the summits held by the three chief executives to agree on the future of “North America.”

When NAFTA was negotiated in the early 90s, civil society had little chance to provide input. In Mexico there was no public consultation. The Mexican congress at the time, still controlled by the Revolutionary Institutional Party (PRI), held perfunctory debates. Today civil society in the three countries is better informed and mobilized. In Mexico the congress no longer rubber stamps bills sent by the president. This explains in part why deeper integration is taking place through a series of regulations and executive decrees that avoid citizen watchdogs and legislative oversight. Activist civil society organizations have to work overtime to keep up.

The initial steps for the creation of a new North American space have already been taken. Mexico, in particular, will have to make the most far-reaching adjustments, and face difficult questions regarding national identity and the nation’s future. In Canada, although the issue is generally unknown, there is now lively discussion within academic settings and NGOs.2 In the United States, the issue is still off the screen.

Matters of identity and sovereignty for the United States will likely be mute, given that it has the most to gain and the least to lose. [???]

Advantages for the United States will include the right to decide on crucial matters such as “pushing out” its borders in response to regional security concerns, and access to strategic natural resources, particularly oil, gas, and fresh water. For the trade, manufacturing, and financial elites of Mexico and Canada, < strong> NAFTA Plus will likely mean a “porous” border for its products and services, and virtually unrestricted access to the United States, still the largest consumer market in the world.

The trinational elites of the private sector will accrue greater benefits in this new space, but the American government and private sector will reap the greatest gains....

After initially rejecting it, the idea of a “North American community” has come of age among U.S. government strategists and a convinced George W. Bush is now vigorously pushing it forward.

The elites’ main justification for deepened regional integration is the supposed “resounding success” of NAFTA. Even among academics it is surprising how NAFTA’s shortcomings are glossed over....

But these studies downplay or omit altogether NAFTA’s negative side. Much praise has been heard for the few “winners” that NAFTA has created, but little mention is made of the fact that the Mexican people are the deal’s big “losers.” Mexicans now face greater unemployment, poverty, and inequality than before the agreement began in 1994. With NAFTA, the Mexican economy has created few jobs for the population and Mexicans increasingly have three options to survive: migrate, mostly to the United States, join the informal economy, or turn to illegal activities. The Economist Intelligence Unit, affiliated with the British weekly The Economist, has reported that in “the first four years of President Vicente Fox’s government the economy has failed to create even one formal job in net terms.”4...

The idea of deeper trinational integration came from several sources. One of them was the American academic Robert Pastor, ex-member of the U.S. government’s National Security Council, and a close personal friend of Jorge G. Castañeda, secretary of Foreign Relations at the start of the Fox government....

In his book Toward a North American Community 6 Pastor detailed his vision. He called on the United States, Canada, and Mexico to integrate by taking advantage of the positive aspects of the transatlantic experience, yet rejecting European values that were supposedly “inappropriate” for the New World. (Pastor refers to Europe’s unwillingness to let “market forces” resolve social concerns such as employment, education, health, housing, nutrition, etc., and thus its relatively heavy bureaucracy, compared to the United States, for redistributing income.)...

In the midst of patriotic fervor in the United States, Pastor’s “grand vision” must have seemed preposterous. His proposal that the United States integrate with foreign countries (specifically Canada and Mexico) languished on bookshelves for years. Yet today many of its ideas have reemerged as NAFTA Plus; for example, the advantages of “deepening” trilateral integration as a step towards enacting the Free Trade Area of the Americas (FTAA); or the distinction Pastor makes between defending “borders” and the “periphery;” or the advantage of holding periodic summits among the three chief executives to speed the pace of integration.7...

The idea is simple: to keep the United States from shutting its border with Canada, there should be no border. Canada would need to progressively take steps to “erase” the border by harmonizing its policies, laws, norms, procedures, techniques, methods, and, most importantly, intelligence and security measures to American standards. Above all, Canada would have to demonstrate to the United States that it was as “secure” in the face of external threats as the United States itself, in order for the latter to agree to “disappear” the border for trade traffic....

...

Security for the United States goes beyond territorial or military considerations and encompasses strategic natural resources. First on the list are oil, gas, and water. In an unusually candid moment, in response to a question by the press, Bush declared that Canada’s water was part of the United States’ energy security.29 Water is being consumed in many parts of the United States at unsustainable rates. One notable example is the Ogallala aquifer located in the mid-west, one of the biggest in the world, presently being consumed 14 times faster than it can be replenished by rain.

Consequently the United States has proposed “mega-projects” in the recent past that would permit the bulk transfer of water from Canada. One project, “Grand Canal,” would transport the plentiful water from Canadian rivers and lakes to the Great Lakes where, on the U.S. side, millions of gallons would be fed through canals and pipes to the increasingly thirsty mid-West states. Another mega-project, the North American Water and Power Authority, would redirect water from rivers in British Columbia and the Yukon to a huge crater in the Rocky Mountains where, again on the U.S. side, it would be taken for increasingly parched western and Mid-west states. 30

Under NAFTA Plus and the dismantling of borders, it would be difficult or impossible for Canada to prevent the transfer of water or other natural resources through trade transactions with the United States.

Oil too figures into American security concerns. Since NAFTA’s start, and particularly since the first American invasion of the Persian Gulf, the United States’ neighbors have become its principal suppliers of oil, natural gas, and electricity, with Canada in first place and Mexico in second....

For the United States, then, only too aware of the difficulties of controlling access to petroleum reserves in the Middle East, the notion of creating a single North American space with its neighbors and thus guaranteeing a relatively cheap flow of oil—in economic, political, and military terms—suddenly wasn’t so ludicrous.

Notwithstanding its present sizable reserves, Mexico lacks a future as an oil producer, especially when compared to Canada, and especially if, under a NAFTA Plus scenario, its oil reserves are openly or covertly privatized and subjected to U.S. security concerns....

The rapid creation of a single North America is now being charted by government strategists basically in the United States. An important contribution to the process came in a series of recommendations released in May 2005 by the Independent Task Force on the Future of North America (ITF). The ITF brought together a select group of business leaders, academics, and ex-government officials from the United States, Canada, and Mexico to strategize on the future of the three countries under deep integration, within a context of heightened American security concerns.

...

In 10 years things have worsened for 94.5 million Mexicans. The application of orthodox economic policies has benefited only 10% of the population. Actually, not even 10% have benefited. The average monthly income of this richest 10% of the population is 11,186 pesos [U.S. $ 1,000 approx.], which certainly is far from being a high salary. This demonstrates that the truly rich are those within the top one or two percent, in other words at most two million Mexicans [of a total population of 102 million]. They are the ones who truly have benefited from 24 years of neoliberalism. 41

Conclusion

The building of a new North American space is rapidly progressing, yet lacking civil society consultation and legislative oversight. By doing away with treaties or accords, the three chief executives are achieving deeper integration through NAFTA Plus by signing “regulations,” thus foregoing the bother of seeing their plans bogged down in one of the legislatures.

The primary objective, a trinational security perimeter, is being consolidated. Future steps include the construction of a new economic space, beginning with a customs union, then a common market (further liberalizing labor mobility between Canada and the United States, but restricted from Mexico), and finally, a monetary and economic union.42

The final step will bring deeper changes in the long term, such as adopting a single currency—already baptized the “amero” by Pastor—but undoubtedly equivalent to the U.S. dollar.43 A single currency would destroy one of the last shreds of sovereignty in the hands of Mexican and Canadian economic authorities, i.e., monetary and fiscal policy. Although officials from Canada and Mexico might be invited to the Federal Reserve for management of the “amero,” such a presence would hardly be more than symbolic. A common currency would give American authorities complete control over the economy of its lesser partners, a scenario that, at least for Mexico, would “cap off a truly colonial absorption,” according to investigator Alejandro Alvarez Béjar of Mexico’s National Autonomous University.44

Costs would be enormous in terms of sovereignty and identity for the lesser partners. Deep integration would mean foregoing an independent future. For Mexico it would forever cancel the Bolivarist dream of a united Latin America, with Mexico spurning its historic relationship with the rest of Latin America. The North American identity to be forged would be spurious and forced. Unsurprisingly, this key aspect has been foreseen. The confidential memo of the ITF’s Toronto meeting talks of a “shared North American identity,” of the need to develop a “North American brand name—a discourse and a set of symbols designed to distinguish the region from the rest of the world.” The document insists that efforts will be required

within the educational system and the mass media. One Member suggested launching a trinational education project that would develop internet-based learning modules on topics such as North American history. These supplements to the standard curriculum in each country could be reinforced through contests and events aimed at building relationships among young leaders across North America, and through a series of North American Centers in all three countries. [...] Robert Pastor [...] offered to develop this proposal further.45

The right of Mexicans to decide the future of the Mexican nation is at stake. This is not an effort, such as the European Union, to join together the good will of countries which, to a greater or lesser extent, accept the principle of equality. Mexico and Canada are rapidly integrating with a country that is in practice opposed to negotiating fundamental differences, particularly with weaker countries. How are the inevitable differences of perspective, concomitant with asymmetry, to be handled with a country that views not only terrorists but also those “who employ a strategy of the weak using international fora [and] judicial processes” as a threat to its “security and strength as a nation state?” 46

The task before civil society in all three countries is enormous. Citizen organizations must begin a concerted effort to understand the regulations signed to date and their implications, in order to fight for their suspension. Still, motives for optimism exist. Actions implemented under the guise of NAFTA Plus by means of regulations have proceeded unchallenged thus far, but their validity lacks treaty status. As such, modifying or canceling these undemocratic regulations would seem to be within reach of an informed, organized, and mobilized civil society and, hopefully, a united trinational civil society.

In the sixth month of 2005, the Zapatistas of Chiapas decreed a “red alert” to call attention to the need to reflect on a domestic reality in which “our elected officials are destroying our Nation, our Mexican homeland.”47 Given the swiftness of unfolding changes with no public oversight, another “red alert” must be sounded to detain NAFTA Plus. As Alvarez Béjar insists, “The North American Community will be Mexico’s most important challenge in the twenty-first century.”48

End Notes

1. Vargas, Rosa Elvira, La Jornada, Mexico City, March 24, 2005.

2. In October 2003, the Center for Research on Latin America and the Caribbean (CERLAC) of the University of Toronto and the Canadian Centre for Alternative Policies held a public forum on “Canada, Free Trade and Deep Integration in North America: Revitalizing Democracy, Defending the Public Good,” at the University of York in Toronto. Contact Professor Ricardo Grinspun ( ricardo@yorku.ca) to obtain papers presented therein. See also Kairos (Canadian Ecumenical Justice Initiatives), “Must We Keep the U.S. Elephant Fed and Happy?” Global Economic Justice Report, Vol. 4, No. 1, April 2005, (http://www.kairoscanada.org,) as well as the web sites of the Polaris Institute, (http://www.polaris.org,) the Council of Canadians, (http://www.canadians.org,) the Canadian Centre for Policy Alternatives, (http://www.policyalternatives.ca,) and Common Frontiers, (http://www.commonfrontiers.ca.)

3. The essays of Mexican, Canadian, and American academics compiled in Andreas, Peter and Thomas J. Biersteker, The Rebordering of North America, Routledge, New York and London, 2001, are a good example of the myopic vision regarding NAFTA’s social and environmental shortcomings.

4. Quote taken from La Jornada’s coverage of the Economist Intelligence Unit’s report, May 21, 2005, cover story. The exact figures: “The average total [employment] figure in 2000 was 12,546,000 as registered in the IMSS [Mexican Social Security Institute] and in December 2004 the figure was 12,509,000, or 37 thousand less.” Taken from Delgado Selley, Orlando, “La economía mexicana a un año de las elecciones,” La Jornada, Masiosare supplement, July 10, 2005.

5. Daniel Lederman, World Bank economist and principal author of Lessons from NAFTA for Latin America and the Caribbean Countries: A Summary of Research Findings, published in December 2003 by the WB. Lederman’s words appear in an interview titled “NAFTA is Not Enough,” on the World Bank’s web site, (http://www.worldbank.org.) Lederman also states that the WB is “currently preparing another report on the topic of deepening NAFTA for economic convergence in North America, which focuses on identifying a post-NAFTA agenda for Mexico.”

6. Pastor, Robert, Toward a North American Community: Lessons from the Old World for the New, Institute for International Economics, Washington, DC, August, 2001.

7. See, in particular, chapters 5 and 8 from Pastor’s book, Op.cit.

8. For an analysis of the 23-year dispute among the two countries regarding Canadian exports of softwood lumber, see Campbell, Bruce, “Everything You Need to Know about the Softwood Lumber Dispute (but will Never Find in the Mainstream Media),” The CCPA Monitor, Ottawa, Volume 12, No. 1, May 2005.

9. Dobson, Wendy, “Shaping the Future of the North American Economic Space,” C.D Howe Institute Commentary, No. 162, April, 2002, (http://www.cdhowe.org) , p. 20.

10. This is to be achieved through a customs union among the two countries, which would stipulate a common tariff for imports from third countries to any of the participants in the customs union. It would also establish a “free-trade area” within the union. See, for example, Jackson, Andrew, “Why the Big Idea is a Bad Idea: A Critical Perspective on Deeper Integration with the United States,” Canadian Centre for Policy Alternatives, Ottawa, June, 2003, p.6. Researcher Wendy Dobson notes, “In the past decade, as Canada’s living standards and economic performance have lagged behind those in the United States, more voices are heard calling for deeper integration.,” Op.cit., p.2. See also Pastor, Op. cit., p. 143.

11. The 11-plant figure is given by R. Pastor in a colloquium, “America and the World: Challenges Facing the Next Administration—The United States and the Americas,” held Oct. 13, 2004, by the Council on Foreign Relations. A transcript appears on its web page, (http://www.cfr.org.) See also Chairmen’s Statement, “Creating a North American Community: Independent Task Force on the Future of North America,” also available at the Council on Foreign Relations’ web site, (http://www.cfr.org.) For trade figures between the two countries, see Andreas, p. 68, and for the automobile industry and border delays, Andreas, p.10-11 and p. 60-133.

12. Crossing the border became a nightmare. For various examples see Andreas, Op.cit., p. 60, 68. A cargo truck that used to take 1-2 minutes to cross the border took 10-15 hours after 9/11 (p.10-11). Nine months after 9/11, vehicle traffic from Canada still took seven times as long to cross into the United States then what had been the case before (140 minutes versus 20) (p.60). Similar delays took place on the Mexican side, but it was not possible to locate figures that measured the impact similar to the Canadian case.

13. 87% of Canadian exports go to the United States (Hristoulas, Athanasios, “Trading Places: Canada, Mexico, and North American Security,” in Andreas, Op.cit., p.34), and 71% of its imports come from the United States (Clarkson, Stephen, “The View from the Attic: Toward a Gated Continental Community,” in Andreas, Op.cit., p. 69)

14. Dobson, Op.cit.

15. Clarke Tony, et.al, “National Insecurity: Bowing to U.S. ‘Security’ Demands Will Make Canadians Less Secure,” CCPA, Toronto, January, 2005, (http://www.policyalternatives.ca.)

16. Schwanen, Daniel, “Let’s Not Cut Corners: Unbundling the Canada-U.S. Relationship,” Policy Options, Institute for Research on Policy Options, Montreal, April 2003.

17. Sanger, David E., “Mexico’s President Rewrites the Rules,” New York Times, September 8, 2001.

18. See Pickard, Miguel, “In the Crossfire: Mesoamerican Migrants Journey North,” CIEPAC bulletin no. 454, available at (http://www.ciepac.org/bulletins/ingles/ing454.htm.)

19. “The system has broken down,” Bush would declare years later. Curl, Joseph, “Bush Vows Push on Immigration,” The Washington Times, January 12, 2005.

20. Flynn, Michael, “U.S. Anti-Migration Efforts Move South,” Americas Program, International Relations Center, New Mexico, July 8, 2002, p.4, available at (http://americas.irc-online.org/articles/2002/0207migra.html.)

21. Symptomatic in this regard are the statements of Luis Ernesto Derbez, Castañeda’s replacement at the Secretary of Foreign Relations, regarding migratory topics. See Pickard, Op.cit.

22. Jackson, Op.cit. (referenced in end note no. 10) writing as late as June 2003, points to a “distinct lack of interest in Washington,” in Canadian private sector flirtations to establish a customs union, p. 5.

23. Department of Defense of the USA, “The National Defense Strategy of the United States of America,” March 2005, p. 1 and 6.

24. Dept. of Defense, Ibid, p. 9.

25. Serrano, Mónica, “Bordering on the Impossible: U.S.-Mexico Security Relations After 9-11,” in Andreas, Op.cit., p. 60-62

26. In one of the first essays on NAFTA Plus in Mexico, Alejandro Alvarez Béjar drew a connection between militarization and migration: “… Mexico’s inclusion in the North American Command demonstrates [...] not only the tendency of increased militarization, but also its tremendous potential for use against Mexican [migrant] workers: the ‘enemy within’ in the United States are the millions of impoverished, unemployed, and frustrated workers, who struggle in Mexico and the United States for their most basic rights.” See “México en el siglo XXI: ¿hacia una comunidad de Norteamérica?,” Memoria, Mexico, No. 162, August 2002, p.8.

27. Esquivel, J. Jesús, “Agentes de Bush en México,” Proceso, Mexico, No. 1483, April 3, 2005, p.67.

28. Telephone interviews, July 4, 2005.

29. Barlow, Maude, “The Canada We Want,” The Council of Canadians, Ottawa, n/d, p.18, available at (http://www.canadians.org) .

30. Clarke, Op.cit., p. 16.

31. Polaris Institute, “Living and Working in the Shadow of the Empire,” Power Point presentation, (http://www.polaris.org.)

32. Ross, John, “Collateral Damage: Mexico, Impacts of the U.S. Aggression in Iraq upon Mexico,” Blindman’s Buff, No. 78, July 2-8, 2005, published by Weekly News Updateon the Americas, Nicaragua Solidarity Network of NY, wnu@igc.org.

33. Pastor, in the Colloquium referred to in note 11, Op.cit., p.12.

34. Independent Task Force on the Future of North America, “Building a North American Community,” Council on Foreign Relations, Washington, DC, 2005, p.36, available at (http://www.cfr.org.)

35. [Independent] Task Force on the Future of North America, “Summary of the Toronto Meeting,” n/d, available at (http://www.ciepac.org/otras%20temas/nafta-plus/index.htm.)

36. Independent Task Force on the Future of North America, Chairmen’s Statement, “Creating a North American Community,” Council on Foreign Relations, Washington, DC, 2005, p.10-13, available at (http://www.cfr.org) .

37. Ibid., p.10.

38. Petrich, Blanche, “Seguridad común acuerda México, EU y Canadá,” La Jornada, June 28, 2005, cover; and Den Tandt, Michael, “Ottawa Unveils New Security Plan,” The Globe and Mail, Toronto, p. A4.

39. Gutiérrez Vega, Mario, “Andrés Rozental: la seguridad amenaza al TLC,” Reforma, Mexico, July 3, 2005.

40. See Pickard, Op.cit.

41. Delgado Selley, Op.cit., see end note no. 4.

42. Pastor, Op.cit., p. 9. But this is not necessarily the only possible sequence of events. A shared currency could be instituted before the free movement of labor.

43. Ibid , p. 114-115.

44. Alvarez Béjar, Op.cit., p. 12.

45. Independent Task Force, “Summary of the Toronto Meeting,” Op.cit., p. 7.

46. Dept. of Defense, Op.cit., p. 5.

47. EZLN, “Sexta Declaración de la Selva Lacandona,” section IV, June 2005, (http://www.ezln.org) .

48. Alvarez Béjar, Op.cit., p. 12.

Translated for the IRC Americas Program by Nick Henry.

Miguel Pickard is an economist and researcher, co-founder of CIEPAC (Centro de Investigaciones Económicas y Políticas de Acción Comunitaria (http://www.ciepac.org)) in San Cristóbal de Las Casas, Chiapas, Mexico and an analyst with the IRC Americas Program (online at (http://www.americaspolicy.org).)

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