NAFTA is Here to Stay

Recently I have been talking to my students about the nature of the nation state and the formation of the international system. We have also been talking about the historical development of capitalism as its ideas and values expanded from Europe to North America. We briefly began to reflect about industrialization, its power structures and its social, cultural, political, economic, and environmental impact. I have also tried to explain to them that the state and the international system is a Western construct whose main pillar is free trade. I have observed that sometimes it is very hard for some of them to comprehend that we are all part of the construct; that we are the result of ideas and inventions of powers that constructed a world for the preservation and expansion of their own economic and political power. A system that has been under constant transformation over the past five centuries as its powers adapt to the challenges of unpredictable outcomes such as colonization, slavery, technology, revolution, social unrest, the depletion of resources, the alteration of the natural environment, and the saturation of markets.

They are perplexed by the idea that all the political, social, cultural, economic, and environmental realities to which they are born into were all the product of the expansion of the Westernization of the world. Very different to have been born one hundred and fifty years ago when even the idea of the United States was in question, compared to the current idea that is ingrained in their subconscious that the United States is a “democratic” nation made up of fifty states, never questioning that it was the product of an economic and political decision by sovereign states willing to weaken their sovereignty on behalf of strategic security and the access to a constructed new enlarged market that would result from the union. I use this transformation as an example of how the first capitalist free trade agreements began to take shape within the international system. If you reflect on it, our union is what the European Union is trying to do today but with the challenges of consolidated nationalism and modern social democratic cultures that impede the powers of liberalism from achieving cultural unity under the principle of capitalist free trade. Just take a look at Canada, whose founding fathers admitted that Confederation was the only possible strategy to construct a market, amalgamating Franco and Anglo cultures into a capitalist market based on the extraction, consumption, and export of commodities. Canada, like the United States, is the product of a new capitalism experiment designed to consolidate larger markets under the construct of the nation state.

Kuang Biao

From the 1980s onward neoliberalism and globalization emerged as new constructs engineered by the economic powers of the United States through their constructed multilateral agencies such as the World Bank, the International Monetary Fund, and the United Nations. After the Second World War the United States, with the help of Canada and other Western powers, rebuilt the international system to its liking, constructing a multilateral body of institutions in order to expand capitalism beyond the Western world, using the science of economics and constructing ideas of “modern” and “backward” (developed and underdeveloped) to motivate institutional and structural transformation at the global level in order to convert the planet into a liberal economic market. Neoliberal adjustments that took place in both the western and non-western world were responsible for the internal transformation of states at the legislative, normative, institutional, policy, and cultural levels. It was the implementation of these structural adjustments at the global level that brought down the barriers of national sovereignty, allowing the possibility of organizing all nations under a global market system.

The North American Free Trade Agreement (NAFTA), the first free trade agreement of its kind to surface as a result of these structural adjustments, represents the initial steps toward a global free trade zone. From the 1854 Reciprocity Treaty between Canada and the United States to the present NAFTA, this constructed space has become the backbone of capitalist expansionism in North America. Imagine the transformation of the market from the limited bilateral borderland market of the mid-1800s to the trilateral market that extends from Mexico all the way to the Canada today. This market of 486 million consumers envisioned by the trilateral government-business partnerships that wanted to resolve the saturation of their domestic markets and break the barriers of domestic regulatory systems, has generated such dependency on the free trade region that in many instances it has more precedence and weight than the domestic markets themselves.

I clarify to my students that MERCOSUR (free trade zone in the southern part of South America), the AFTA (ASEAN Free Trade Area –economic block of Pacific rim countries), and the European Union (EU) are additional free trade zones that followed NAFTA and that its sum will eventually be converted into one holistic global trade zone. Although theoretical for now, it is the projection of the private sector powers that began to carve out a world of zero tariffs in order to benefit their own business interests and facilitate the expansion of capitalism at a global scale. The summation of all parts equals the reduction of sovereignty in each of the individual parts, and to me that is a structural strategy to weaken the nation state.

Therefore, as I tell my students, it is not crazy to believe that the nation state is slowly becoming obsolete as transnational economic actors become the central force behind economic, social, political, cultural, and environmental decisions. The loser, as always, the lower classes, that become instruments of labor and consumption, reducing their relevancy in a “democratic” process to the minimal as all electoral options fall under the same status quo of globalization.

The full globalization of the market is something that we will not see in our life here on earth, it might take a century to consolidate as the structural changes continue to fall into place and as other societies become complacent to the new realities just like we do here in the United States. It sounds like something from a science fiction movie but for a minute think; would somebody in Boston or in Fredericton, New Brunswick, living during the early stages of reciprocity (1853-1854) believe or even imagine that Canada would one day have an independent market outside of the British Commonwealth, that Mexico would be willing to join a free trade zone after the Americans annexed their territory by force (1846-48), and that the Americans would be willing to sacrifice their sovereignty for the sake of a free trade zone after becoming the super power of the world?

I believe that the majority of us will continue to believe that the maps of the world will not change, that the nation state and the international system will exist for ever, that we will continue to live in a political world and not an economic world, and that democracy will survive. We prefer to believe this then accept that there are other powers, beyond our reach, that decide how the future will look. To me, those forces are more interested in the consolidation of a global market system with minimal social, economic, political, and environmental regulatory structures; a relevant nation state only for those paying taxes inside the imaginary nation state and a global market system for those dominating the forces of capitalism. Therefore I believe that President Trump’s rhetoric around NAFTA is a big bluff and that the status quo will prevail. If anything, as the Canadians desire, the trade agreement will be “modernized” and adapted to present business challenges and realities.

Stefano Tijerina

About Stefano Tijerina

My name is Stefano Tijerina and this blog’s objective is to connect Maine’s social, environmental, economic, cultural, and political issues to the global system, centering on how the local impacts the global and how the global impacts the local or what is known in Global Studies as the "Glocal" effect. In our present era of globalization it is crucial for the general public to understand how the new dynamics of the international system impact our lives here in Maine and how our local decisions impact the earth. These are my personal views, and they do not express those of the University of Maine System or the University of Maine.