FOR IMMEDIATE RELEASE: November 19, 2003

As trade ministers from throughout the hemisphere meet to further negotiations for the Free Trade Area of the Americas in Miami this week, the Carnegie Endowment for International Peace’s Trade, Equity, and Development Project released a new report, NAFTA’s Promise and Reality: Lessons from Mexico for the Hemisphere. The report uses the upcoming ten-year anniversary of NAFTA’s enactment to sort through myth and reality of NAFTA threats and promises as they relate to jobs, migration, and the environment. Access the report online at www.carnegieendowment.org/NAFTA.

NAFTA’s Promise & Reality: Lessons for the Hemisphere from Mexico examines how the quality of life in North America, particularly in Mexico, has fared as a result of trade liberalization. The authors’ analysis focuses on people, their communities, and the choices they make as they attempt to negotiate their social and economic environments. The document reports on NAFTA’s effect on household income, paychecks and productivity, rural employment, agricultural production and land use, and the overall effect of these changes on migration and environmental quality. Conclusions from the report include:

• NAFTA has not helped the Mexican economy keep pace with growing demand for jobs.
• NAFTA-led productivity growth in the past decade has not translated into increased wages.
• NAFTA has not stemmed the flow of Mexican emigration to the United States.
• The fear of a “race to the bottom” in environmental regulation has proved unfounded.
• Mexico’s evolution toward a modern, export-oriented agricultural sector has failed to deliver the anticipated environmental benefits of reduced deforestation and tillage.
  The report makes clear that NAFTA has been neither the disaster its opponents predicted nor the savior hailed by its supporters. But while the trade agreement’s overall impact is muddled, for Mexico’s rural households the picture is clear?and bleak. NAFTA accelerated Mexico’s transition to a liberalized economy without creating the necessary conditions for its citizens to respond to the shocks of trading with two of the biggest economies in the world.

John Audley is senior associate and director of Carnegie's Trade, Equity, and Development Project. Sandra Polaski is senior associate with the Project. Demetrios G. Papademetriou is co-director and co-founder of the Migration Policy Institute. Scott Vaughan, formerly a visiting scholar at Carnegie is director of the Unit for Sustainable Development and Environment at the Organization of American States.