06 May 2010

NAFTA and the Arizona immigration law

"Any intervention in a complex system may or may not have the intended result, but will inevitably create unanticipated and often undesirable outcomes." -- Wikipedia's version of the law of unintended consequences.

One possible unintended consequence of our old friend the North American Free Trade Agreement (NAFTA) is the new Arizona anti-illegal immigration law, much in the news these days. The  Support Our Law Enforcement and Safe Neighborhoods Act makes it illegal for an alien to be in Arizona without carrying legal documents. It criminalizes illegal immigration and allows police to question and demand papers from anyone who they suspect might be an illegal.

Apparently most Americans support the law; however, critics accuse it of racial profiling and it has lead to mass demonstrations, even calls for a boycott of Arizona. Some police chiefs and mayors have criticized it, concerned about police being bogged down enforcing the law and worried about what it will do to police rapport with the Hispanic community. The entire Phoenix Suns basketball team, currently battling for the NBA Western Conference title, are protesting the law and Major League Baseball may move the 2011 all-star game out of Phoenix.

With its long border with Mexico, Arizona has long been a major destination for Mexican immigrants, illegal and otherwise. Pressure to move north in search of work was greatly intensified by NAFTA. While the trade agreement eliminated tariffs on corn, the Mexican staple, coming into Mexico, it did not reduce the massive subsidies American corn farmers receive from their government. Whereas a U.S. corn grower receives an average annual subsidy of $20,000 a year, a Mexican farmer receives only $100. Without a protective tariff, the Mexican farmer simply cannot compete. As a result, Mexico has been flooded with cheap corn from the U.S. driving thousands of small farmers out of business and costing millions of farm workers their jobs. The vast majority head north.

Such are the unintended consequences of a trade agreement that was loudly proclaimed as win-win-win. For Mexican workers and Arizonans alike it may be rather more lose-lose.

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