wwwslidesharenetMariaReynaftamay182011 rey Topic 4 NAFTA amp US hegemony Canada and Mexico Kit Quintero Ramírez Mize RL Pantaleo K Wise C Wise TA ID: 231095
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Slide1
Source: http
://www.slideshare.net/MariaRey/nafta-may-18-2011-
rey
Slide2
Topic: 4: NAFTA & US hegemony: Canada and Mexico
(
Kit:
Quintero
-
Ramírez
; Mize, R.L.
;
Pantaleo
,
K; Wise, C. ; Wise. T.A.;
Abboushi
, S.)
WST
Financial Meltdown (2008)
Trade
liberalization (
Neoliberalism)
Continental Commodification
The
Wonderful World of NAFTA (Part
1, 2
)
- 2007
http://www.youtube.com/watch?v=ZnVL0d9fwkY
7min p1
http://www.youtube.com/watch?v=XxQQael1ueE
7 min
p2
NEED
TO KNOW | After NAFTA | PBS 13.57 min
http://www.youtube.com/watch?v=mSXmB_my0ls
0c1 2011Slide3
Thesis: Under U.S. hegemony, NAFTA has integrated Canada and Mexico into a
continental
free-trade system
. As a result, Canada
’
s
raw materials are exploited
for reconstructing the declining U.S. global hegemony.
As a
result of US-led 2008 financial meltdown, workers face a sharply
depressed job market
in a
de-industrialized Canada
barely buffeted by the welfare system.
In contrast, Mexican
cheap
, but skilled and
surplus
labour
is exploited
for
restructuring the industrial sector in the U.S
. The
failure of the US financial system
has worsened the
unemployment of the Mexican workers intensifying their poverty as they have no welfare system.
Both,
Mexican and Canadian economies, have become
dependent
on the U.S. through the
commodity chain
of exploitation. Slide4
Peripheries: NAFTA
Periphery: Mexico
Semi-periphery: Canada
Arguments in the literature:
Wise T. A.(2011): Hegemony and
dumping
NAFTA + U.S. Farm Subsidies Devastates Mexican Agriculture
2010
https://www.youtube.com/watch?v=
N4KRd7Qjyys
8 min
Abboushi
, S (2010):
US trading power, US disregard for agreements, land-ownership structure vs. strategy of acquisition; and Managed (not Free) trade
Quintero Ramirez (2002)
NAFTA deindustrialized & depressed labour conditions in Canada and exploits workers in MexicoSlide5
4
. Susan George:
WTO is ineffective
http
://www.youtube.com/watch?v=
NQ952ba75Yk
you tube uploaded May
5, 2011
)
5
.
Wise, R.D &
Cypher
, J.M (2007).
Cheap-labor embodied Mexican exports but not achieving new high-value added production or specialization.
Source: The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current Economic Integration, THE ANNALS OF THE AMERICAN ACADEMY, March
2007
6
.
Carol Wise (2009):
Regional market integration of US, Canada and Mexico has been superseded by China’s use of NAFTA to facilitate its entry into US through Mexico Slide6
7
.
Gandasegui
, M.A (2006
) Kit
#
17:
Using its hegemony, US
wants to
gain
advantages over 4
areas in making trade agreements with each country in
LAm
:
Government contracts
Pharmaceutical markets
Agricultural markets
Intellectual property (GRAIN 2004).
Slide7
8
.
Katherine
Pantaleo
(2010).
the
murders as gendered sexual serial killings primarily
perpetuated and
caused
by: NAFTA, Gender issues & Corruption
of the criminal justice system
.
NAFTA's Ultimate Effect on Mexico P1 of 2 2010
april
9.29 min murder city Charles
bowden
http://www.youtube.com/watch?v=WSrOAfMylAs
NAFTA's Ultimate Effect on Mexico P2 of 2
http://www.youtube.com/watch?v=nokmc36jnOI
7 min
9
.
Cormier &
Targ
(2001)
Globalization led to workers’ poverty &
global income inequality
Cormier , D &
Targ
, H
, (2001) Globalization And The North American Worker.
Labor Studies Journal
, Spring 2001 v26 i1 p42
Paul
Ciccantell
(2001). NAFTA and the Reconstruction of U.S. Hegemony: The Raw Materials Foundations of Economic Competitiveness. (Statistical Data Included),
Canadian Journal of Sociology
,
Wntr
2001 v26 i1 p57
Slide8
How does NAFTA de-industrialize & depress
labour
conditions in Canada and exploit workers in Mexico?
(Quintero Ramirez: 2002)
By:
Reducing the number of full-time jobs
Subcontracting work outside the plant
Increase of part-time workers
Piecework outsourced to home work
Slide9
Core: NAFTA & US (as Core):
Core: NAFTA & US (as Core):
Power of the US: Neoliberalism is imposed on Mexico and Canada
Impact of US financial boom-bust cycles affect their trade balances.
Semi periphery and Periphery:
Continental commodification of Canada
’
s (semi periphery) and Mexico
’
s (Periphery) raw materials
http://www.slideshare.net/MariaRey/nafta-may-18-2011-
rey
1-40 slidesSlide10
D
riving force of Global market integration: (Cormier &
Targ
: 2001)
Neoliberalism (NL)
deregulate commercial activity. Liberalize trade, open for foreign investments. Deregulate finance/currency, privatize the economy, ensure private property protection
Why should Canada and Mexico adopt NL?
US
’
s enforcement: How?By integrating Canada and Mexico through NAFTAAs requirements of loans: WB, IMF & SAP
Feb 2010: UNCTAD’s new economic report shows that neoliberal policies have negatively affected the countries that were forced to follow them Slide11
Why does Mexico as a peripheral country bow to American hegemony
IMF requires each country to balance export vs. import payment in trade. It lends money to bridge the gap (imports minus exports) and imposes the rules of neoliberalism (
LAPDoGS
) on the borrowing country.Slide12
Core: NAFTA & US (as Core):
Power of the US: Neoliberalism is imposed on Mexico and Canada
Impact of US financial boom-bust cycles affect their trade balances.
Semi periphery and Periphery:
Continental commodification of Canada
’
s (semi periphery) and Mexico
’
s (Periphery) raw materials
Slide13
WST: US
’
s commodification of Canadian and Mexican raw materials: How?
1.
Continentalization
of the 3 economies
Corporatization of production in NAFTA countries
Continental expansion of US
’
s MNCs
Continental enforcement of neoliberalism 2. FT FT-terms
favourable to the US GCC & Continental commodity chainSlide14
http://www.dfait- maeci.gc.ca/eet/research/nafta/nafta-en.asp#aconmondSlide15
Global Integration by trade agreements in
Table 1
US vs. European Union (EU).
European U: Sovereign states may resist global integration because it would mean surrendering national control on economic policies
CU allows greater bargaining power between trading nations
FTA may appeal to small states as exporters need to adjust only to block standards not to global standards.Slide16
WST
:
Continentalization
of the
three economies
& US (Core
’
s)hegemony:Mexico (periphery) and Canada (semi-periphery) are integrated through NAFTA Favourable terms of trade for the US (unequal exchange)
US disregards
WTO
’
s decisionsSlide17
FT:
Continental commodification of Canada
’
s (semi periphery) and Mexico
’
s (Periphery) raw materials
US power within NAFTA leads to the continental commodification
Under the US hegemonic power Mexico and Canada abide by the US strategies.Slide18
How does a hegemon in a trade block make gains?
Political influence
Terms-of-trade (TOT)
Discrimination against non-members
Greater influence over multilateral trade
negotiationsSlide19
http://www.pecc.org/trade/papers/bangkok-2001/low.pdfSlide20
http://
www.pecc.org
/trade/papers/bangkok-2001/
low.pdfSlide21
Impact of Neoliberal Trade Policies:
UNDP Human Development Report 2004 :
46 countries
’
people are poorer today
(2004) than
in 1990
Liberalization and privatization restrict countries
’
supply of basic services
WB conditionality undermines local service industries that cannot compete with trans-national service corporationshttp://www.un-ngls.org/cso/cso5/cfmm2004statement.pdfSlide22
http://
ageconsearch.umn.edu
/
bitstream
/61895/2/AAEA_RGR_PAPER_May_3_2010.pdf
Rafael
Garduño
Rivera 2010Slide23
UN Economic and Social Council, 2000: committee on human rights reports:
Most global trade is controlled by
multinational
enterprises
Trade and commerce have serious
human
rights implications
WTO: gender
insensitive
Patents for genetically engineered species – economic high-jacking.
http://www.unhchr.ch/Huridocda/Huridoca.nsf/(Symbol)/E.CN.4.Sub.2.2000.13.En?
Opendocument
. Slide24
US hegemony
Advanced industries, technology & market (P)
Mergers and expansion of MNCs (NDL)
Financial stability (P)
Largest & desirable market for capital and for export (P)
Mexico: Periphery
Raw material based industrialization/ agriculture (Mexico)
(
unequal trade
: UT
)Development model –locked in by US market (oil demand & manufacturing) (
lack economic resistance to US market)Export dependence
(since 1970s, oil to pay debt dependence on US)
Smaller
domestic market
&
lacks
LAm’s
economic
d
evelopment pull
NAFTA:
Impact of US on MexicoSlide25
US hegemony
Advanced industries, technology & market (P)
State support of MNCs: Mergers
and expansion of MNCs (NDL
) for capital accumulation
Neoliberalism, Washington
Consensus
,
m
arket liberalization
Financial stability (P)Capital flow from and dominant pull of the largest market for export (P)Canada:
SemiperipheryContinental integration of raw materials industries
(
heaviest
, bulkiest, and largest
volume, e.g., petroleum
, iron, coal, aluminum and
copper, for industrial production.)
Promote
higher technology manufacturing and
service
sector
industries
as the Development Model
Maintain export dependence on US as a secure market
(
U.S
. negotiators aimed for and got 'secure and enhanced access' to Canada's resource
sector)
Smaller domestic markets
& less globally powerful
NAFTA: Impact of US on CanadaSlide26
Canada
(Semi-periphery)
Manipulative power
D
ifferent
goals in negotiating
CUFTA: protect
resource and manufactured exports from U.S. trade discrimination
(stronger State and econ stability)
Regulated NAFTA ties with US but weakened by continentally integrated economy
1980s: NEP (National Energy Program), of Canadian government aimed at
self-reliance in oil and natural gas & increased investment & production & restricted
exports
Restrictions
on
US re: foreign
ownership of petroleum, uranium production, mining
leases, transportation industries
Mexico
(Periphery)
(Weaker state and dependence on Core and semi-periphery)
Different
goals in
negotiating NAFTA: promoting
economic and political restructuring
were central (lack of powerful and stable State)
Locked in dependence on exports of oil and raw resources & US industries shaped its econ. development
Mexico, a major world producer of lead and
zinc, pollution intensive production, drew U.S
.
investment (UT)
US demand for bulky/heavy raw resources has continentally tied Mexico to the capital and markets of US & Canada
NAFTA: Comparing
impact of US on Mexico and on
CanadaSlide27
WST: US
’
s commodification of Canadian and Mexican raw materials: How?
1.
Continentalization
of the 3 economies
Corporatization of production in NAFTA countries
Continental expansion of US
’
s MNCs
Continental enforcement of neoliberalism 2. FT FT-terms favourable to the US
GCC & Continental commodity chainSlide28
Ciccantell
(2001): NAFTA: an institutional framework of integrating raw materials
Why was U.S. interested in NAFTA?
US raw materials supply systems
were declining
To access cheap
labour
and to gain new markets
Name a resource that is expensive today:
oil & gas
e.g.: oil price increases of 1973-74 led to 1979-80 decline of U.S. economic competitivenessSlide29
http://www.acs-aec.ca/Polls/Poll55.pdfSlide30
Core: NAFTA & US :
1. Problems of U.S. & its MNCs:
How did they solve insecure supplies of the raw materials ?
Canada
’
s & Mexico
’
s oil, natural gas, and other natural resources
2. Why was US interested in these supplies?
To reduce for U.S. MNCs
’ cost of production to advance their profit & competitiveness. Slide31
Core: NAFTA & US (
cont
’
d):
Core-Periphery unequal exchange continues under hegemonic FT rules:
FT ensures:
Cheap access to heaviest, bulkiest, and largest volume raw materials
Monopolistic (MNCs) extraction peripheries
’
raw materials at low costsSlide32
What is
‘
Direct foreign investment
’
?
branch plants -- central mechanisms of core economies' control over their raw materials in peripheries
Limit processing to certain refineries:
physical relationship tightly links many extractive peripheries to particular core
firmsSlide33Slide34
Foreign Direct Investment in Canada 1995 - 2004
FDI received in to Canada $449 billion in
2006
http://www.witiger.com/internationalbusiness/FDIinCanada.htmSlide35
http://revista.amec.com.mx/num_7_2004/Peter_Kresl.htmSlide36
John W. Foster and John Dillon1 http://
www.kairoscanada.org
/e/economic/trade/
NAFTACanada.pdf
Annual % Changes for 10 years of NAFTA
Increasing Productivity (red) gains
were not passed on to
workers (
labour
costs (
yello
w
:Slide37
Sources: Canadian Institute for Health Information,
Gouvernement
du Québec, Government of Canada,
Institut
de la
statistique
du Québec, International Monetary Fund,
Organisation
for Economic Co-operation and Development, Population Reference Bureau, Statistics Canada, US
FedStats, World Bank.
http://www.stat.gouv.qc.ca/donstat/econm_finnc/conjn_econm/compr_inter/ipcvar_an.htm
2005: Mexico
’
s cost of living increased double that of Canada Slide38
http://www.stat.gouv.qc.ca/donstat/econm_finnc/conjn_econm/compr_inter/index_an.htm
2005
Sources:
Canadian Institute for Health Information,
Gouvernement
du Québec, Government of
Canada
,
Institut
de la
statistique
du Québec, International Monetary Fund,
Organisation
for Economic Co-operation and Development, Population Reference Bureau, Statistics Canada, US
FedStats
, World Bank.
40 mil. Poor in MexicoSlide39
Quintero Ramirez (2002): How does NAFTA de-industrialize & depress
labour
conditions in Canada and exploit workers in Mexico?
In Canada: by
Reducing the number of full-time jobs
Subcontracting work outside the plant –affects jobs:
increase of part-time workers
piecework
outsourced to home work
Slide40
Quintero Ramirez (
cont
’
d)
In Mexico:
average of 70 hrs. per week without overtime pay - no health insurance, no benefits
violation of the Employment Standards by employers – workers received no compensation under the Workplace Safety Act
no welfare or UI (unemployment insurance)Slide41
Canadian Institute for Health Information,
Gouvernement
du Québec, Government of Canada,
Institut
de la
statistique
du Québec, International Monetary Fund,
Organisation
for Economic Co-operation and Development, Population Reference Bureau, Statistics Canada, US
FedStats
, World Bank.
2003
http://
www.stat.gouv.qc.ca
/
donstat
/
econm_finnc
/
conjn_econm
/
compr_inter
/
chomage_an.htmSlide42
http://www.dfait-maeci.gc.ca/eet/research/nafta/nafta-en.asp#aconmondSlide43
http://www.dfait- maeci.gc.ca/eet/research/nafta/nafta-en.asp#aconmondSlide44
http://www.dfait- maeci.gc.ca/eet/research/nafta/nafta-en.asp#aconmondSlide45
http://www.dfait- maeci.gc.ca/eet/research/nafta/nafta-en.asp#aconmondSlide46
NAFTA benefits the capital investors but workers lose jobs:
Source: G & M Feb. 15, 2008, p.A18.(editorial)
Trade Area 440 mil people
1993-2006: $15 Trillion (value of goods and services produced)
Economies grew by :
U.S. 50%
Canada 54%
Mexico 46%
NAFTA partners
’
total trade /a minute
$1.7 million (worth)Source: G & M Feb. 15, 2008, p.A18.(editorial)Slide47
The Wonderful World of Nafta
http
://www.youtube.com/watch?v=
ZnVL0d9fwkY
7 min (the wonderful World of
Nafta
1/2)
http
://www.youtube.com/watch?v=
XxQQael1ueE
(2/2)Slide48
Does Canada
control its own sovereignty, taxation and
borrowing?
Yes, but:
U.S. hegemony
It ensures that its huge sunk capital in raw materials, overpowers Canada
’
s claims to sovereignty Slide49
Pre 9/11: What % of Canadians were
‘
continentalists
’
?
Two thirdsSlide50
Post-9/11: Who is a close ally of the U.S?
http://www.acs-aec.ca/Polls/SoCloseYetSoFar.pdfSlide51
What is
hegemony?
Arrighi
(2004):
When a state uses its economic, political, military and cultural power to control a group of sovereign states.
Arrighi, G (2004).
"Hegemony and Antisystemic Movements". In I. Wallerstein, ed.,
The Modern World-System in the Longue Duree
. Boulder, Co: Paradigm Publishers, 2004Slide52
Core: NAFTA & US
:
Ciccantell
,
P.
(
2001)
1
. Problems of U.S. & its MNCs:
How did they solve insecure supplies of the raw materials
? Ciccantell, P. (2001). Canada’s & Mexico’s oil, natural gas, and other natural resources 2. Why was US interested in these supplies?
To reduce MNCs’ cost of production for U.S. to advance their competitiveness.
(
Ciccantell
, P (2001). NAFTA and the Reconstruction of U.S. Hegemony: The Raw Materials Foundations of Economic competitiveness.
(Statistical Data Included) , Canadian Journal of Sociology, Winter 2001
v26
: 1, p57)Slide53
Core: NAFTA & US (cont’d):
3. What does US as a hegemon want to
monopolize
trade in
the world?
Cheap access to heaviest, bulkiest, and largest volume of raw materials
Maintain its hegemony to extract raw materials at low costs from the peripheries. Slide54
WST explains Core’s Globalization agenda & its consequences to the peripheries
Expansion of US Hegemony: (read: Ciccantell, P: 2001)
Enforced uniformity in development
Hegemonic control over technologies
Unsuitable, costly & centralized solutions
Lack of locally effective problem solvingSlide55
Wise, Timothy A. (2011) (in course kit)
NAFTA + U.S. Farm Subsidies Devastates Mexican Agriculture 8.23 min 2012
http://www.youtube.com/watch?v=N4KRd7Qjyys
Dumping margin
In a case of
dumping
, the difference between the "
fair price
" and the price charged for export. Used as the basis for setting
anti-dumping duties
. http://www-
personal.umich.edu
/~
alandear
/glossary/
d.htmlSlide56Slide57
Peripheries: NAFTA
Periphery: Mexico
Semi-periphery: Canada
Wise
T. A.(2011): Hegemony and dumping
Abboushi
, S (2010):
US trading power, US disregard for agreements, land-ownership structure vs. strategy of acquisition; and Managed (not Free) trade
Quintero Ramirez (2002)
NAFTA deindustrialized & depressed labour conditions in Canada and exploits workers in Mexico