When the Clintonites and the Wall Street types pushed the trade agreement with Mexico last year, called NAFTA, they did not tell you taxpayers that your tax dollars would be used to prop up the falling Mexican peso and its Mexican oligarchy.
But that is what started to happen just before Christmas when suddenly, and contrary to official assurances, the Mexican government devalued the peso, setting off a further plunge in the peso and the Mexican stock market.
The dictatorial Mexican regime cheapens the peso relative to the dollar to make their exports to the U.S. cheaper and our exports to Mexico more expensive. This move also lowers Mexican wages thereby tempting more factories in the U.S. to move south of the border. With lower wages relative to the dollar, Mexican workers have less money to buy any U.S. products exported south. Advantage the Mexican ruling classes!
Then, with ample gall, the Mexican regime, having caused the peso to drop by about one third since January, turns to Uncle Sam (Sucker) for a bailout. Uncle Sucker starts drawing on a $6 billion line of credit to exchange dollars for pesos to prop up the peso. Did you know your tax dollars were to be used this way–those same tax dollars that Washington tells you are insufficient for assuring safer drinking water standards, repairing public works and other domestic needs?
Not a peep is heard from the newest blowhard on the Congressional block–Newt Gingrich, the incoming Speaker of the House. He is occupied trying to cut the $300 million that annually goes to public television and public radio to worry about some $6 billion going to play Mexican roulette.
Suddenly, all those Clintonites who couldn’t wait to be quoted by name boosting NAFTA last year, like the President’s trade representative, Mickey Kantor, asked to be anonymous when they gave their guarded quotes to the press last week, following the peso’s sudden fall.
All along, NAFTA was really an investment guarantee deal, backed by American taxpayers, for U.S. companies in Mexico. These companies, leaving America and unemployed workers behind, wanted assurances that their investments would be secured under Uncle Sam’s trade zone umbrella and that their profits could be repatriated to their home offices in the U.S. They wanted NAFTA far more to facilitate their capital flight than to build exports to Mexico.
NAFTA boosters kept saying that lowering average Mexican tariffs by 10% would facilitate U.S. exports to Mexico and create more jobs in the U.S. But the peso’s one-third drop in value cancels far more than a 10% tariff and makes U.S. exports far more expensive after NAFTA than before NAFTA. Estimates are that the U.S. will sell Mexico 35,000 motor vehicles this year, while importing from Mexico 350,000 motor vehicles built mostly by U.S. companies that shifted production from the States to Mexico.
This $6 billion fund to bolster the peso was concluded in a secret deal between Treasury Secretary Lloyd Bentsen and his Mexican counterparts, about two weeks before NAFTA was pushed, on slabs of pork, through Congress late last year. Interesting, isn’t it, that the new Mexican President waited until just after the December 14 GATT vote in Congress to declare the peso devaluation?
That’s the basic problem with NAFTA and GATT–they are conceived in secrecy, negotiated in secrecy and pushed through our Congress on a fast-track, no amendments permitted, basis with restricted debate. As such they develop international autocratic regimes over our domestic democracy, making Americans lose more control over their future, and subordinating health, safety and workplace standards to the dictates of global commerce.
Critics call this a trade uber alles movement, leading to downward pressure on American wages and other living standards to lower levels prevailing abroad.
Stay tuned for further NAFTA and GATT developments. During the coming Presidential election, these two acronyms should be quite hot issues for the people.