NAFTA Highway or new Silk Road?

Articles

By William Hawkins, Washington Times, September 24, 2006

http://washingtontimes.com/commentary/20060923-084008-4624r.htm

...A flurry of articles over the summer painted the SPP [Security anbd Prosperity Partnership] as a step toward a North American Union that would submerge national sovereignty and open the U.S. to mass migration and political corruption....

One focus of the articles was a planned corridor of highways and railroads from Mexico into the American Midwest dubbed the "NAFTA Highway." Some of the stories sought to revisit the debate over the North American Free Trade Agreement, but what is really behind this transportation network heralds the collapse of NAFTA and its dream of a stronger continental economy. NAFTA was supposed to combine cheap Mexican labor with U.S. capital and technology to improve competition with Asian rivals....

...Today, the massive wave of imports from Asia is clogging West Coast ports and sending shippers and retailers searching for new routes to bring even more foreign products into the United States....

The Chinese firm Hutchison Whampoa has partnered with Wal-Mart in a $300 million expansion of Lazaro Cardenas to handle perhaps 2 million containers annually by the end of the decade. The American Chamber of Commerce in Guangdong, China, has held seminars promoting this Mexican port. Punta Colonet, about 150 miles south of Tijuana, is also eyed for expansion to offload millions of additional containers filled with Asian imports. Kansas City Southern railway has bought the Mexican rail links and the State of Texas is negotiating with a Spanish firm to build a corridor of toll roads from the border heading north....

While American-based manufacturers will continue to suffer under the barrage of Chinese goods, Mexican industry will be smashed flat by what should be called a new Silk Road rather than a NAFTA highway. The economic development goals of NAFTA are being abandoned.

More than 600 of the maquiladoras assembly plants along the U.S.-Mexican border have relocated to China, leaving their Mexican workers behind. There is little chance for Mexican wages to rise if at $1.50 an hour they can be undercut by Chinese labor at 50 cents an hour. NAFTA was to be a way to lift Mexicans out of poverty and stem illegal immigration to America. A similar argument was made last year about the Central America Free Trade Agreement (CAFTA)...

The new transport plans make a mockery of these arguments, as they are aimed purely at helping China improve its competitive advantage over all North and Central American rivals. What is being built is truly a "Highway of Death" for both NAFTA and CAFTA. The resulting regional turmoil will be felt in the United States.

It is well past time to rethink the sophistry of "free trade" with China. Instead of spending billions of private and public funds aiding Chinese traders, a major effort should be launched to rebuild and expand the North American production base, and to stem the massive outflow of capital and technology to Beijing, America's ambitious geopolitical rival. A key part of that effort would be to restructure NAFTA to create a true trade bloc that would drive Chinese goods off the continent, rather than into its heartland.

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