NORTH AMERICA NAFTA's effects remain unclear

Both the United States and Mexico have lost jobs after 10 years of NAFTA.
MIAMI HERALD
REYNOSA, Mexico -- Blue-smocked, blue-jeaned and youthful, maquiladora assembly plant workers stream across busy Porfirio Diaz Boulevard, nine hours of labor -- the fruits of NAFTA dreams -- behind them and the destiny of Mexico in their future.
The debate in Mexico and the United States over the North American Free Trade Agreement centered on this generation: Young people, given productive lives, would be able to raise their standard of living and buy American products -- spurring U.S. exports and jobs, suppressing illegal Mexican immigration and cementing a win-win-win scenario among Mexico, the United States and Canada.
The worst predictions about NAFTA's effects have not come to pass. The "giant sucking sound" of jobs going south, predicted by NAFTA opponent and former presidential contender Ross Perot, was more moderate than the number of American jobs that have gone east to China since 2000. Globalization made some sectors of the Mexican economy more efficient and established production-sharing among the NAFTA countries.
Not perfect
But as NAFTA marks its 10th birthday, results show the trade agreement was no panacea for Mexico's problems, nor was it a magic bullet for U.S. exports or impoverished U.S. border towns.
"NAFTA for Mexico has been a success in terms of increasing trade and foreign investment until about 2000," said Kevin P. Gallagher, a research associate at Tufts University's Global Development and Environment Institute.
But the benefits of trade -- the billions in foreign investment -- were to be used to finance development, according to stated goals in Mexico's National Development Plan.
"They missed the opportunity to take their foreign investment and build domestic demand and the economy. Now that their investment has dried up, there are no legs for growth," Gallagher said.
Real wages in Mexico are lower today than when NAFTA was approved and have not kept pace with productivity gains, a study by the Carnegie Endowment for International Peace found. The rural sector has lost some 1.3 million jobs, causing farm families to depend more heavily on the $12 billion in remittances sent annually from the United States. Neither poverty nor the flow of undocumented workers has abated.
Mexico's weak economic growth can't absorb the 1 million young people who enter the work force every year, so the flow of undocumented workers to the United States has ballooned from an estimated 200,000 a year in 1994 to more than 300,000 a year today, according to Mexico's National Institute of Statistics.
Government statistics show that while extreme poverty has fallen sharply, the number of people classified as poor or extremely poor has risen from 62 million to 69 million, out of a population of more than 100 million.
Losses or gains?
Mexico's high hopes were matched by American dreams. But even today, after innumerable studies, it's still debatable what U.S. workers lost or gained from NAFTA.
Former President Bill Clinton predicted that NAFTA would create 200,000 jobs in its first two years. The Economic Policy Institute estimated 766,000 jobs had been lost in the first seven years of NAFTA. The Office of the U.S. Trade Representative countered with claims that 914,000 jobs had been gained.
Jobs unquestionably went to Mexico in the 1990s, but this exodus was masked by a booming domestic economy that sent U.S. unemployment to record lows.
Despite the different numbers, the U.S. government has certified under the Trade Adjustment Assistance program that as of September of this year 525,094 workers have lost their jobs because of NAFTA.
China's effect
For both countries, the hand dealt by NAFTA was forever altered by the emergence of a wild card: China as a rising global economic power.
Since 2000, factories in Chinese export zones have replaced towns like Reynosa as the favorite factory floor of U.S. multinationals. More than 300,000 Mexican maquiladora workers have lost their jobs since 2000, some because of the U.S. economic downturn, some because of an outflow to Central America but more because of the exodus to China.
Mexico's lack of infrastructure is glaring along the border. While Reynosa's skies are relatively unpolluted compared to other border cities, and manicured new industrial parks house modern facilities, the city's water treatment plants have not kept pace with the growth in population. Snaking to the border near Reynosa's international bridge is a canal choked with lime-green slime.
Going to work can still mean a 90-minute bus ride down dusty, unpaved roads.
A recent report by the Fitch credit rating agency, Boom Times at the Rio Grande: U.S.-Mexico Border Region Expands, warned that lagging infrastructure was causing Mexico to become uncompetitive.