Tag Archives: US

Immigration to Mexico – Emigration from Where?

By Deborah Van Hoewyk

According to the 2020 decennial Mexican census, the population of Mexico was 129,932,753 people, of whom 1,212,252, or less than 1%, were officially counted as immigrants. In the United States, which has the highest number of immigrants in the world (nearly 50 million), they comprise about 15% of the population; in Canada, it’s 21.5%. The vast majority of immigrants arrive in Mexico from the United States, mostly in the form of retirees and snowbirds who hold temporary or permanent residency; the next largest groups come from Central and South America.

Although the numbers of immigrants to Mexico may be very small – every year, more Mexicans leave the country than foreigners arrive – immigrants have exerted a fair amount of impact on Mexican life and culture. Immigration to Mexico started, of course, with the conquest; during the colonial period, the Spanish rulers were not eager to have immigration from any place besides Spain. After independence (1821), however, Mexico sought to attract other foreigners, who brought their purchasing power and businesses with them. The General Colonization Law of 1824 allowed foreigners to buy land in Mexico, as long as it was farther than the border than 20 “leagues” (60 miles), and farther from the sea than 10 leagues (30 miles) – the General Colonization Law is the ancestor of the trust system, painfully familiar to home-owning residents from abroad.

The law, with a hostile hiatus for the U.S. Mexican War (1846-48), which finally defined Mexico’s northern border, gave impetus to immigration to Mexico, particularly in the 20th century. People came, and continue to come, for religious freedom, to escape unfavorable political conditions, to improve their economic situation.

German immigrants started coming in the 19th century, and were quick to start mercantile/manufacturing and agricultural businesses, in particular coffee and henequen and sisal plantations. Cubans boosted the performing arts, including film production, in the mid-nineteenth century. Tacos árabes and Carlos Slim Helú? Lebanon. Look elsewhere in this issue for short profiles of immigrant contributions to Mexico.

What Happened with NAFTA?

By Jan Chaiken and Marcia Chaiken

The North American Free Trade Agreement (NAFTA) went into effect in 1994 and effectively made the US, Mexico, and Canada into a single trading zone without tariffs for many products, or lower tariffs than applied to other trading partners. While the treaty was originally envisioned as a mechanism for creating new employment opportunities and enhancing working conditions and standards, its main impacts were an enormous increase in the amount of goods traded among the three nations and a sudden spurt of Mexican nationals moving to the US for employment (a migration that ended after a few years but left a large residue of Mexican citizens living and working in the US). NAFTA also stimulated the creation of entirely new methods of production between the US and Mexico. US companies export intermediate components to manufacturing companies in Mexico, which assemble the finished product and export it back to the US. As a result, now over 40% of the content of goods imported into the US from Mexico is of US origin. This form of cooperation has helped make US businesses more globally competitive,

Even before he was elected president, Donald Trump declared NAFTA to be the worst trade deal ever made, and after he took office, he initiated renegotiation of the treaty. A revised treaty was signed by the presidents of the US and Mexico and the prime minister of Canada on November 30, 2018, a date chosen specifically because the next president of Mexico, an outspoken opponent of NAFTA, took office the following day. In addition, the Democratic party had already been elected to a majority in the US House of Representatives, but the new members had not yet assumed power to assert their objections to the treaty. This effort by the signers to nail down a new treaty in the face of obvious forthcoming impediments did not succeed, and eventually the trade negotiators returned to the bargaining table. The revised version of the new treaty was ratified by the Senate of Mexico in December 2019 and by the US Congress and President by the end of January 2020. Canada waited for the other parties to act on revisions, and now the ratification process has begun in Canada but may take several months more. The new treaty will take effect 90 days after all three countries have ratified it.
The renegotiated treaty is called USMCA in the United States and T-MEC in Mexico. (The government of Mexico always invents more pronounceable acronyms!.) All told, what are the changes? Despite the bombast and rhetoric that arose from interested parties, the new treaty is remarkably similar to NAFTA. The main effect of enacting a new treaty is to end uncertainty as to whether there will be any treaty at all going into the future – if NAFTA had been simply terminated, the normal operations of many companies would have been thrown into substantial chaos.

Among its changes are a requirement that more components for vehicles be produced in the three countries in order to avoid tariffs, and a provision that 40% of each vehicle must eventually be produced by workers who earn at least $16 US per hour (about 3 times as much as is currently paid to the average Mexican factory worker). Trump has touted this provision as necessarily returning more automobile production to the United States and a subsequent increase in jobs for Americans. But if average wages for Mexican auto workers go up by increasing the salaries of industry administrators, low paid jobs will remain in Mexico and prices for U.S. cars and trucks will noticeably rise.

The treaty also gives US dairy farmers access to a larger proportion of the Canadian dairy market than in the past. In particular, more American cheese, milk and butter can be sold in Canada. Correspondingly US consumers will have access to more Canadian dairy products. Canadian sugar can also be marketed in the U.S.

Perhaps ironically, the most sweeping changes in the new NAFTA were proposed, not by the Trump administration but by Democrats in the US Congress. These included provisions related to new labor laws in Mexico that will allow Mexican workers to form independent unions, prevent forced labor, and have increased control of their contracts. The final USMCA treaty includes benchmarks and inspection protocols that will allow enforcement of the labor provisions. Other late changes to the treaty protect the environment by preventing outsourcing of pollution and related jobs to Mexico, but no specific benchmarks for controlling climate change were included in the renegotiated treaty. The Democrats also won a concession from Trump with a provision change that prevents large drug companies from retaining the rights to a class of extremely expensive pharmaceuticals for ten years and from obstructing the sale of equally effective generic forms of the drugs.

One of Mexico’s main original goals in negotiating a new trade agreement was to update and modernize the list of products so as to include ones that didn’t exist when NAFTA went into effect or that had changed substantially in their nomenclature or mode of manufacture or distribution since 1994. The text of the new treaty covers a variety of digital products and intellectual property rights that were not previously included.

Although the ratification of the new NAFTA provides more certainty in the Mexican, American, and Canadian markets, true to his style of governing by chaos, Trump inserted a sunset provision in the treaty. Any one of the three partner countries can pull out of the treaty six years after all have signed and, after a substantial delay, leave the trading partnership. But, by then, the Trump administration will be over, gone; it is hoped that North America and the rest of the world will be back on track to improving global prosperity rather than serving strictly corporate interests.