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Free Trade vs. Fair Trade: Teaching NAFTA 19 Years Later

If we can’t logically explain why life isn’t fair, or why nothing in life is free, then how do we educate kids on the complex issues that makeup NAFTA?

This best practices guide is a resource for teachers and parents tasked with educating students on NAFTA-related concepts, global relations and other corresponding issues. The point is to show students both negative and positive perspectives on NAFTA.

Ratified on December 8th, 1993 and enacted January 1st, 1994, the tripartite treaty between the US, Canada and Mexico was designed to open up the North American borders and create a free trade region that would benefit all parties. NAFTA was a controversial topic during the initial negotiations and remains so today.

Opponents then feared that the agreement would eliminate jobs and threaten the environment, among other issues. NAFTA supporters contended that the agreement would create new jobs, spark economic growth, and improve environmental conditions and living standards in all three countries.

The Logic: Making Participating Countries More Competitive

The primary motive behind NAFTA was to invigorate economic growth in North America and boost conditions for fair competition. The free trade model promised each country market advantage, as the market itself would determine the producers and the consumers.

In this scenario, already-developed U.S. and Canada would buy tariff-free, goods from lesser-developed Mexico who could manufacture them cheaper. Economically unburdened by the elimination of tariffs and import quotas, U.S. and Canada could focus more on producing high-tech goods and innovation and invest in a more highly developed infrastructure.

In turn, Mexico would also benefit from these free trade relations. As the term ‘free trade’ specifies, Mexico would receive globalization in the form of investment and technology from Canada and the US. In this manner, Mexico would eventually realize success along the lines of its North American counterparts.

NAFTA includes impartial rules-based dispute mechanisms to safeguard the fairness and stability required for the agreement to function. When a dispute first arises, NAFTA asks the concerned parties to try to resolve their disagreements through committees. If no solution is agreed upon, they must follow the mechanisms defined by the NAFTA Secretariat, the tripartite body in charge of NAFTA-related disputes.

Guide for Teaching NAFTA

The consequences of NAFTA over the last decade are convoluted. More specifically, economists, politicians, unions, consumer advocacy groups and citizens interpret the outcomes differently. For some, the free trade agreement was very unfair, indeed.

The following issues will all serve as good starting points for a discussion, essay assignment, or group presentation. Point out the paradoxes and ambiguities and have students discrete and research the issues that interest them most.

Tricky Topics

  • Economic Benefit:

Member countries did benefit from a multi-trillion-dollar cumulative gross domestic product a recent New York Times article indicates. The same article states that, “The pact has benefited all three members.” However, other sources argue that Mexico was unable to utilize this benefit because of the country’s political instability and internal economic policies.

  • Employment

NAFTA is said to have effectively deindustrialized the U.S. because many manufacturing jobs are displaced to Mexico. Interestingly, NAFTA has also created millions of jobs in the US. Other sources like NAFTANOW.ORG point out that in 2008, U.S. manufacturing exports, reached an all-time high of US$1.0 trillion.

It’s worth noting that the U.S. expanded the maquiladora program so that they could take advantage of cheap Mexican labor for export to the US. While this effort increased employment in Mexico, it had a negative effect on working conditions. Maquiladora workers had no rights, health or pension benefits and were often required to work 12 or more hour days.

Another expectation on behalf of the NAFTA members was that by creating more Mexican jobs, immigration from Mexico to the United States would substantially decrease. This has not been the case, with over 500,000 Mexican immigrants entering the U.S. every year.

  • Increased Dependency on Imports

Tariffs and quotas are used by nations worldwide to protect themselves against foreign competition. Some parties assert that while industrialized countries, like the U.S., benefited from freeing the market by making it easier and cheaper to export their products and services, doing so still had unfavorable consequences on developing countries like Mexico.

The free market, they argue, crushed agricultural nations depending on quotas to secure food and living conditions for their rural populations. Without tariffs these countries lose their main income source as well as access to their own food production. Suddenly poorer countries are dependent on imports that they can’t afford from the U.S., Canada, and other industrialized nations.

Activities

  1. Define Globalization- Have students write an essay in which they define the concept and then share their ideas in a classroom discussion. Analyze their answers in a group. If the students show that they are very engaged and opinionated, break the group in two. One will argue the pros, the other the cons of globalization. Begin or conclude by presenting an overview of the concept to guide and inform students’ understandings.

  2. Consumer Knowledge- Ask each student to select a favorite personal item as the basis for a six minute presentation. They will research the object and identify where the item was made. As preparation for their presentation, have each student locate the country on a map. They will research the country, identifying its primary exports and imports, education, economy, living conditions and so on. Have them outline potential positive and negative aspects of their findings. Ask how the knowledge they’ve gained would affect their decision to buy the product again. The presenter will also provide one or two methods for increasing consumer knowledge.

  3. NAFTA Preamble- Provide copies of the Trade Preamble to each student. First, divide the classroom into groups of four to discuss the pros and cons of the treaty. Ask each group to share with the classroom their list of pros and cons. Write a pro/con chart on the board and record the contributions. Discuss as a larger group.

  4. NAFTA Member Debate- Divide the classroom into three groups. Assign each group a NAFTA country. Have them begin by brainstorming their country’s position(s) on the agreement. Each group will identify key topics to cover such as the economy, employment rates, and so on. Then have them divide the research responsibilities among themselves. Once the groups are fully prepared, orchestrate a classroom debate.

  5. What about Canada and the Environment?- One must dig deep to find resource material on Canada’s part in NAFTA. Depending on the grade level you are working with, challenge students to write an essay, give a presentation or lead a discussion on Canada’s role in the agreement, along with how they have or haven’t benefited.

  6. When looking for material on the environment, direct them to NAFTANOW.ORG’s Myths vs. Reality and the Commission For Environmental Cooperation as starting points. Most importantly, emphasize that NAFTA, like other political issues throughout history, is not transparent but complex and dynamic. What matters is to gain knowledge on the issues and develop an empowering awareness that will translate to better decision making and relationships in their lives.

Additional Resources for Teachers, Parents and their Students

Websites:

Accessible resources for facts on NAFTA:

Films:

Books- Nonfiction:

  • “The Children of NAFTA: Labor Wars on the U.S./Mexican Border” by David Bacon

  • “NAFTA Revisited: Achievements and Challenges” by Gary Clyde Hufbauer and Jeffrey J. Schott

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