12 February 2008

Where is the international law with: NAFTA?

From the North American Free Trade Agreement, highlighting via bold italics, mine.

Chapter Twelve: Cross-Border Trade in Services

Article 102: Objectives

    1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to:
      a) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;

      b) promote conditions of fair competition in the free trade area;

      c) increase substantially investment opportunities in the territories of the Parties;

      d) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;

      e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and

      f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.

    2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.

Article 1201: Scope and Coverage


3. Nothing in this Chapter shall be construed to:

    (a) impose any obligation on a Party with respect to a national of another Party seeking access to its employment market, or employed on a permanent basis in its territory, or to confer any right on that national with respect to that access or employment; or

    (b) prevent a Party from providing a service or performing a function such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health, and child care, in a manner that is not inconsistent with this Chapter.


Chapter Sixteen: Temporary Entry for Business Persons

Article 1601: General Principles

Further to Article 102 (Objectives), this Chapter reflects the preferential trading relationship between the Parties, the desirability of facilitating temporary entry on a reciprocal basis and of establishing transparent criteria and procedures for temporary entry, and the need to ensure border security and to protect the domestic labor force and permanent employment in their respective territories.


Article 1603: Grant of Temporary Entry

1. Each Party shall grant temporary entry to business persons who are otherwise qualified for entry under applicable measures relating to public health and safety and national security, in accordance with this Chapter, including the provisions of Annex 1603.

2. A Party may refuse to issue an immigration document authorizing employment to a business person where the temporary entry of that person might affect adversely:

    (a) the settlement of any labor dispute that is in progress at the place or intended place of employment; or

    (b) the employment of any person who is involved in such dispute.

3. When a Party refuses pursuant to paragraph 2 to issue an immigration document authorizing employment, it shall:

    (a) inform in writing the business person of the reasons for the refusal; and

    (b) promptly notify in writing the Party whose business person has been refused entry of the reasons for the refusal.

4. Each Party shall limit any fees for processing applications for temporary entry of business persons to the approximate cost of services rendered.

Article 1604: Provision of Information

1. Further to Article 1802 (Publication), each Party shall:

    (a) provide to the other Parties such materials as will enable them to become acquainted with its measures relating to this Chapter; and

    (b) no later than one year after the date of entry into force of this Agreement, prepare, publish and make available in its own territory, and in the territories of the other Parties, explanatory material in a consolidated document regarding the requirements for temporary entry under this Chapter in such a manner as will enable business persons of the other Parties to become acquainted with them.

2. Subject to Annex 1604.2, each Party shall collect and maintain, and make available to the other Parties in accordance with its domestic law, data respecting the granting of temporary entry under this Chapter to business persons of the other Parties who have been issued immigration documentation, including data specific to each occupation, profession or activity.


Article 2205: Withdrawal

A Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.

Side Agreement on Labor, available here.

One of the fascinating things about NAFTA is that it was sold to help all the people in the US, Canada and Mexico. Not only the main agreement, but the labor side agreements agree to establish better working conditions, better pay, and so on, to help get fundamental workers rights established, mostly in Mexico. This, notably, has not happened.

What has happened is an increase in *trade* but not an increase in working conditions south of the border. In fact, not only has poverty not decreased in Mexico, it has increased. Harold Meyerson's column in the WaPo of 08 FEB 2006 looks at this phenomena:

The North American Free Trade Agreement was sold, of course, as a boon to the citizens of the United States, Canada and Mexico -- guaranteed both to raise incomes and lower prices, however improbably, throughout the continent. Bipartisan elites promised that it would stanch the flow of illegal immigrants, too. "There will be less illegal immigration because more Mexicans will be able to support their children by staying home," said President Bill Clinton as he was building support for the measure in the spring of 1993.

But NAFTA, which took effect in 1994, could not have been more precisely crafted to increase immigration -- chiefly because of its devastating effect on Mexican agriculture. As liberal economist Jeff Faux points out in "The Global Class War," his just-published indictment of the actual workings of the new economy, Mexico had been home to a poor agrarian sector for generations, which the government helped sustain through price supports on corn and beans. NAFTA, though, put those farmers in direct competition with incomparably more efficient U.S. agribusinesses. It proved to be no contest: From 1993 through 2002, at least 2 million Mexican farmers were driven off their land.

The experience of Mexican industrial workers under NAFTA hasn't been a whole lot better. With the passage of NAFTA, the maquiladoras on the border boomed. But the raison d'etre for these factories was to produce exports at the lowest wages possible, and with the Mexican government determined to keep its workers from unionizing, the NAFTA boom for Mexican workers never materialized. In the pre-NAFTA days of 1975, Faux documents, Mexican wages came to 23 percent of U.S. wages; in 1993-94, just before NAFTA, they amounted to 15 percent; and by 2002 they had sunk to a mere 12 percent.

The official Mexican poverty rate rose from 45.6 percent in 1994 to 50.3 percent in 2000. And that was before competition from China began to shutter the maquiladoras and reduce Mexican wages even more.

One of the thing the *free trade* folks don't tend to address is that localized agriculture, even subsistence agriculture provides a total of two necessities: food and cash. By putting poor, rural and inefficient farmers in direct, head-to-head competition with combine driven, 'green revolution' US agribusiness, that has seen the greatest productivity per person for agricultural goods on the planet, NAFTA wiped out not only cash income that could be garnered from poor Mexican farmers, but, soon, the ability to keep a roof over one's head by selling crops would dry up which meant that the *farming* went with it.

To Jacksonians, the idea that a Nation can support its poorest and most local folks trying to scratch a living for themselves while the rest of the economy works damned hard to better things all the way around is important. Even worse is when an industrial powerhouse utilizes its purchasing capability to deprive the poorest of work and food, there is seen a marked deterioration in the standard of living, ability to find work and, finally, the deterioration of society as this basis of it is no longer supported. I don't believe that this is what the 'free trade' concept was supposed to do, but that is a highly elitist concept based in a society with a high standard of living and thriving industries. That is an internal bias of economics that we tend to ignore in the US: we are rich.

Even worse, is that when an item of food is found to have more profitable utility going towards a non-food resource, say bio-fuels, the cost for that food skyrockets. If you are in a country that has just had its agricultural sector decimated by 'free trade' and no longer have support internally, then the sudden jump in cost of external food being bought up by industry is a huge shockwave to go through a people and their economy. The MIT Technology Review looks at this on 13 FEB 2007 in an article by Brittany Sauser on the effects of ethanol production in Mexico:

The recent rise in corn prices--almost 70 percent in the past six months--caused by the increased demand for ethanol biofuel has come much sooner than many agriculture economists had expected.

According to the United States Department of Agriculture, this year the country is going to use 18 to 20 percent of its total corn crop for the production of ethanol, and by next year that will jump to 25 percent. And that increase, says Marshall Martin, an agriculture economist at Purdue University, "is the main driver behind the price increase for corn."

The jump in corn prices is already affecting the cost of food. The most notable example: in Mexico, which gets much of its corn from the United States, the price of corn tortillas has doubled in the past year, according to press reports, setting off large protest marches in Mexico City. It's almost certain that most of the rise in corn prices is due to the U.S. ethanol policy, says David Victor, director of the Program on Energy and Sustainable Development at Stanford University.

So much for 'sustainable energy' involving a food crop.

Now that Mexico has had to shift away from sustainable, even if subsistence, agriculture to one of relying on cheap food from the US, the sudden economic turnaround for ethanol production has capped the effect of demoralizing the poor Mexican farmer, forcing them into poverty or even off of their land, and then whipsawing the entire population with increased food prices. Do note that when an impoverished people forced into further poverty and causing farming to become marginal for life sustainment, you are setting up conditions similar to those prior to many social upheavals, dating back to peasant revolts in the Middle Ages all the way to Russia in 1917 and numerous other revolutionary scenarios in Latin America and Africa.

'Free trade' capitalism causing Socialism? Yes, because the economic basis for Mexico was not there to sustain a 'free trade' environment and the result is millions flooding north to get *any* kind of job they could in direct and absolute contravention to international law and NAFTA itself. Yet, because this has been such a boon for the US, we have decided that giving away National Sovereignty for a good economy is well worth it, so we do *not* enforce international law or the treaty doing this by repudiating the treaty. It is doing well for the US even if we are having to sustain another Nation because they are going down the tubes because of their infrastructure problems.

The board set up to measure such things on the labor side, the NAALC, came out with their 2007 final summary up to 2006, and it has a few very interesting charts in it. One is quite traditional and shows the GDP percentage breakout of the US economy, which demonstrates our shift from manufacturing to services, pretty staid stuff, given the size of the economy from 1998-2002:

The drop from manufacturing as a percent of the economy (15.4% to 12.9%) is joined by decreases in Mining, Utilities, Wholesale and Transportation. The Services sector has picked up in IT, Financial Services and Rental/Leasing, along with Health Care and other social services with only Business Services suffering a decrement. This is something most Americans are familiar with as the economy is now one where Services dominates Manufacturing and Agriculture, completing a trend that had been going on since the 1970's.

Mexico, from the signing of NAFTA to 2002 looks very different:

That 1.2% drop in Farming, Forestry and Fishing is an indicator of a Nation gaining dependence on other sources of income. Even worse is Manufacturing going downwards by 0.6% over that period of time, the traditional interior Service of Hotels dropping by 1.7%, and Real Estate dropping 2.3%. That over 5% drop is seen getting picked up in the Services sector in Communications by 1.3% and a whopping 3.6% in Community, Social and Personal Services. That is an economy shifting from subsistence farming, moving to the cities and then looking for handouts from local communities and governments. And as the jobs in traditional sectors that led out of farming, via manufacturing and traditional services in hotels and real estate are becoming less important, there has been a societal cut-off going on.

Beyond the unrest seen due to higher food prices, there is one, other, traditional services that can *always* expand, but at a very, very high societal cost: organized crime. In 2003 the Library of Congress made a report on the Organized Crime situation in Mexico looking at 1999-2002 and the Key Findings are as follows:

Mexico’s drug trafficking and alien smuggling networks have expanded their criminal activities aimed at the United States by capitalizing on the explosive growth of transborder commerce under NAFTA and the attendant growth in human and merchandise traffic between Mexico and the United States. The growth in trans-border commerce, as manifested in soaring levels of overland passenger and commercial vehicle traffic, has provided an ever-expanding “haystack” in which the “needles” of illicit narcotics and illegal aliens can be more easily concealed.

In the wake of the September 11, 2001 terrorist attacks on the United States, increased border security measures temporarily heightened the risks of interdiction for Mexican drug traffickers and alien smugglers. This heightened level of risk forced smugglers to increase their reliance on sophisticated counter-detection measures, such as border tunnels, multiple repackaging of drug shipments, containerization, and rail transport.

Mexico’s three major drug cartels are being superseded by a half-dozen smaller, corporate style, trafficking networks. In a process that mirrors the post-cartel reconstitution of drug trafficking networks in Colombia, this “new generation” of Mexican drug traffickers is less prone to violence and more likely to employ sophisticated technologies and cooperative strategies. The processes that are driving Mexican drug trafficking organizations toward establishing cooperative networks of increasing sophistication and decreasing visibility are likely to intensify in the post- September 11 environment. As a result, Mexican drug trafficking networks are likely to emulate their Colombian counterparts by investing heavily in counterintelligence, expanding and diversifying their legitimate enterprises, and concealing transnational partnerships that could attract undue attention from U.S. intelligence and law enforcement agencies.

Alien smuggling from Mexico to the United States is a US$300 million-a-year business, second only to Mexico’s illicit drug trade in terms of revenues from criminal activities. Between 100 and 300 human smuggling rings operate in Mexico, many of which are loosely coupled with one or more of a half-dozen core human smuggling networks that have extensive transnational contacts.

A variety of Russian criminal organizations, operating through dozens of small cells, are engaged in a wide range of illegal activities in Mexico. Some Russian criminal organizations based in southern California have entered into drug trafficking partnerships with Mexican drug cartels.

Asian criminal organizations are active in Mexico as partners with domestic alien smuggling and human trafficking rings, as suppliers of primary materials for narcotics to Mexican drug traffickers, and as wholesalers and retailers of counterfeit merchandise and pirated intellectual property.

During the late 1990s, the Revolutionary Armed Forces of Colombia (FARC) established a clandestine arms smuggling and drug trafficking partnership with the Tijuana-based Arellano Felix Organization (AFO).

Since the mid-1990s, Mexico, at the request of the Spanish government, has deported scores of terrorists belonging to the Basque separatist group, Fatherland and Liberty (ETA).

Statements by high-ranking Mexican officials prior to and following the September 11, 2001 terrorist attacks indicate that one or more Islamic extremist organizations has sought to establish a presence in Mexico.

The Red Mafia, Triads, Yakuza, Korean Mafia, Colombian cartels, FARC, ETA and some others, like Hezbollah, operating in/through/around Mexico and with their drug gangs. This, as they say, is not a pleasant thought, that 'free trade' is now going to rev up transnational organized crime *and* terrorism. The report then goes through 13 Polydrug Trafficking Organizations, 6 Northern Border Smuggling Gangs, 12 Alien Smuggling Networks, the Foreign Transnational Criminal Organizations, 9 Domestic Terrorist Organizations, and the known Foreign Terrorist Organizations mentioned above.

I thought the idea was to make things better?

Since the level of official corruption (political, police and military) is so high in Mexico, they have a definite problem clamping down on *any* of these problems. A Sign On San Diego article from the Union-Tribune 05 JAN 2008, looks at two murder victims found in Tijuana and how the new Mayor is already corrupt based on his past history with criminal organizations. The same site reported from the Union-Tribune on 18 JAN 2008 of 6 dead in a shootout featuring automatic weapons between cartel members. Even with Federal, Provincial and Local police acting together, they are having a hard time of battling the heavily armed cartels. The Chicago Tribune of 07 FEB 2008 reports on Mexican President Calderon's appeal for COIN funds to help battle this problem, to the tune of $1.4 billion. Here is part of the NAFTA agreement showing up in spades:

MEXICO CITY – In his first year in office, Mexican President Felipe Calderon has gone beyond his predecessors in declaring war against drug traffickers and organized crime, dispatching tens of thousands of troops to lead the charge.

But the enemy isn't going down without a fight. After months of improvement in security, January saw a surge in drug-related violence, including bloody battles with Mexican forces along the U.S. border. Law-enforcement officials call it a counterattack against Calderon's offensive.

In an interview Wednesday ahead of his first presidential visit to the U.S., Calderon appealed for approval of a $1.4 billion U.S. aid package proposed by President Bush to give Mexico's anti-drug battle a boost with aircraft, surveillance equipment and police training. The package has stalled in Congress.


In a wide-ranging discussion at the Los Pinos presidential compound with the Tribune and Hoy, a daily, Spanish-language newspaper owned by Tribune Co., Calderon said Mexican police and military have felt the brunt of the drug war's casualties.

But his diplomats are stressing to U.S. lawmakers that it "is affecting Americans, that it is affecting the children of those congressmen … and requires the cooperation of everyone to resolve it," he said. "It is a problem that we share as neighbors."

The Calderon administration has claimed its share of successes, including the detention of about 20,000 people linked to organized crime and an operation in October that netted 23.5 tons of cocaine, which the government trumpets as a world record.


But U.S. law-enforcement officials and security analysts say the successes have come with a price. Mexico suffered 235 drug-related murders in January, up more than 50 percent from January 2007, according to El Universal newspaper Reforma newspaper, which also tracks crime data, put the number of drug-related murders in 2007 at 2,275, a 15-percent jump from 2006.

When you are pulling in 20,000 people, you do *not* have a minor problem on your hands. In Iraq that might account for nearly 1/3 the entire insurgency. Spread over 5 years. So 20,000 people in a couple of months is not only worrying: it is frightening. And as these are criminal organizations making contacts with exterior Transnational Criminal and Terrorist operations, they have resources of their own to draw upon in the way of equipment and training. And the number being killed are those, now, seen in COIN, not just standard organized crime.

And what made this possible?

A lot of poor people seeing their chances of getting into the service sector cut off and no longer able to grow their own crops and gain some modicum of profit. Narcotics and human trafficking are far more lucrative than mere corn and rice. And as part of the COIN problem one of the things that needs to get shut down is the funding and supply sources for organized crime... and that money comes from the northern border region.

The United States.

Thank you to the vaunted two-party system for making one, lovely, possible future one in which the next COIN work we will have to do will be across our southern border... and a series of fences built not to keep the illegals *out* of the US, but to regulate US money flowing *into* Mexico that is fueling their organized crime and narcotics groups.

Perhaps it is time to re-think NAFTA before we do the exact, same thing to other parts of the world unprepared for 'free trade' because they have corrupt governments, police, military and court systems. Might be a good idea to review the basis of 'free trade' as it has things not noteworthy in most of the world: accountable governments, liberty, freedom, anti-corruption organizations in civil, political, law enforcement and military realms, and the ability to go after organized crime and terrorism. Otherwise we are asking for the much larger job of when these Nations slowly sink into a miasma of organized crime wars and terrorists roaming around.

This does mean supporting liberty, freedom and accountable governments before 'free trade'.

But then getting the 'free trade' first usually means you have a lot of trouble getting the rule of law if it wasn't there to start with.

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