Considering the Short Run of NAFTA

By Thomas Espeshade
Published in The Social Contract
Volume 4, Number 1 (Fall 1993)
Issue theme: "NAFTA and immigration"

When Bill Clinton picked William M. Daley to lead the effort to sell Congress on the North American Free Trade Agreement, he plugged NAFTA as a way to reduce illegal immigration from Mexico.

The argument is either disingenuous or uninformed during his tenure int he White House, NAFTA is likely to result in more illegal immigration, not less.

This is no reason to oppose the trade pact. In the long run, NAFTA should curb undocumented migration. But if the short-term effects of the agreement aren't acknowledged, NAFTA's opponents are likely to sue a rise in illegal immigration as a reason to overturn it. What has been lost in the debate over NAFTA is a crucial distinction between development for migration between Mexico and the U.S. In the long run, economic development in Mexico is likely to weaken pressures for illegal migration to the U.S. But in the short run, NAFTA could have just the opposite effect.

Most immigration experts agree that greater parity in living standards between Mexico and the U.S. is the only long-term solution to illegal migration.

But in the short term -- the next 5 to 10 years -- NAFTA could increase the number of undocumented workers migrating into the U.S.

Economic development in Mexico's agricultural sector will probably promote greater privatization and consolidation of land holdings, which will displace rural workers from traditional sources of employment. These dislocated workers are most likely to migrate to urban areas in Mexico or to the U.S.

Corn is Mexico's most important crop, in both acreage and rural employment, and is especially vulnerable to trade liberalization. Corn now benefits from a price support to growers that is 70% above the world price. IF NAFTA is approved, the elimination of this price support. combined with the greater efficiency of U.S. corn production, is likely to increase unemployment in Mexico's corn industry, leading to greater pressure for migration.

NAFTA will probably stimulate the creation of jobs int he Mexican fresh fruit and vegetable sector, in which Mexico has a comparative advantage over the U.S. While this may offset the job losses in the grain sector, illegal immigration could still increase. In some states in northern Mexico, more than half the labor force in export agriculture comes from states farther south. Poorer workers form these states are given a job and free transportation to within 200 miles of the U.S. border, and from there they are able to make contacts and find work illegally inside the U.S.

We estimate that doubling Mexican wages and halving unemployment rates will lower undocumented U.S. migration by nearly 40 percent. ;

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