Standards
Addressed by Lesson: CIVICS
Standard
3.3 Students
understand the domestic and foreign policy influence
the United States has on other nations and how the actions
of other nations influence politics and society of the
United States . (b,c,d) ECONOMICS Standard
2.3 Students understand that government actions
and policies, including taxes, spending, and regulations
influence the operation of economies. (d) Standard
3.1 Students understand that the exchange of goods
and services creates economic interdependence and change
(a – d). (a,e) HISTORY Standard
4.2 Students understand how economic factors have
influenced historical events. (d,e) Standard 4.3
Students understand the historical development
and know the characteristics of various economic systems.
Objectives
of Lesson: |
To
discuss the concept of free trade in the context
of the North American Free Trade Agreement an
its impact on Mexico .
|
Instructional
Strategies: |
Discussion,
skit
|
Preliminary
Lesson Preparation: |
Students
should have a basic understanding of neoliberalism
and its components, one of which is free trade.
This lesson should be preceded by the neoliberalism
workshop.
|
Vocabulary:
|
North
American Free Trade Agreement (NAFTA)
|
Suggested
Time: |
50-60
minutes
|
Materials
Needed: |
Props,
newsprint and markers
|
Attachments:
|
None
|
Lesson
Outline
Introduction
to Lesson:
Unless
students already have a background in globalization
and free trade, this lesson cannot stand alone. It is
meant as a complimentary class or ‘case study' to the
previous two lessons.
Icebreaker
/ Quick Activity to Assess Prior Learning:
Begin
by letting students know you would be interested in
hearing what they know about NAFTA.
Points
to highlight are:
•
NAFTA is an agreement between
Canada , Mexico , and the U.S. that outlines rules for
how capital and goods will be traded between these countries.
In theory, these countries are supposed to gradually
eliminate trade barriers, import tariffs and quotas
so that goods can flow freely between them. Free trade
zones tend to attract foreign investors as they do not
place many restrictions on how these investors spend
their money. (e.g. labor laws, environmental protection,
etc.) NAFTA and similar agreements do not outline
rules for the movement of labor within the context of
free trade.
•
NAFTA was implemented at a time when Mexico 's economy
was suffering, the country's debt to the IMF and World
Bank was high, and the country desperately needed jobs
and foreign investment, i.e. Mexico was in a very weak
negotiating position.
Activities
Activity
1:
Brainstorm NAFTA's Impacts
The
+'s and –‘s of NAFTA for Mexico (Similar charts could
be created for Canada and the U.S. as a basis for comparison.)
| POSITIVES |
NEGATIVES |
| |
Comparative
advantage. What Mexico offers best is cheap labor.
This contributes to a “race to the bottom” in terms
of labor standards in an effort to attract foreign
investors. |
| Mexico
has
a comparative advantage in goods like coffee whose
prices fluctuate greatly in the world market. |
The potential
for price crashes, however, makes it dangerous for
Mexico to rely on earnings from these crops. |
| Privatization:
Privatizing state-owned industries will make them
run more efficiently, and the price should be cheaper
for consumers. |
Prices
for these privatized services have gone up because
the government is no longer ensuring a low cost
for consumers. Also, private companies often lay
off workers to cut costs.
Privatization
also reduces the revenues available to the government
for providing public services.
NAFTA
has resulted in lost jobs in U.S. manufacturing
and the undermining of tens of thousands agricultural
sector jobs in Mexico . The latter has prompted
a significant increase in economically forced
migration from Mexico to the U.S. |
| It
is much easier for U.S. corporations to build factories
in Mexico , creating new jobs. |
Enforcement
of labor protections and environmental standards
are minimal in free trade zones established in Mexico
. |
| Increased
trade between Mexico and its NAFTA partners facilitate
closer diplomatic relationships as well. (Exception:
Mexico 's stance on Iraq). |
|
| Increased
exports brings more money into the Mexican economy
as a whole. |
|
| Mexico
has
more currency to pay back debt (by cutting subsidies
and public spending). |
Reduced
social services for the Mexican people. Those groups
who had previously received government support (i.e.
farmers) now have it harder. |
Let's
look at some statistics and see what story they tell:
What
does Mexico look like right now after 10 years of NAFTA?
NAFTA
has created a lot of growth for the economy, more import
earnings, more foreign investment. However, increasing
the size of the economic pie, does not necessarily mean
that everyone gets a bigger slice. Since there is a
decrease in the role and power of the state, it is less
capable of dispensing economic earnings more equitably.
Instead those who are rich get richer while the poor
get poorer.
•
The debt has increased
from $100 billion in 1994 to $128 billion in 2001.
•
The minimum wage in Mexico
is $4.30 a day.
•
The buying power of the
peso fell 40% between 1995 and 2000. So, if in 1995,
what you were earning covered all of your living expenses,
that same amount would cover only a little over half
in 2000.
•
To pay for the basic needs
of a family of 6 in Mexico , three to four minimum wages
are needed.
•
16% of Mexicans survive
on $1 a day, living in extreme poverty.
•
60% survive on of $2 a
day and live in poverty as of 2001. In 1994, only 50%
lived on $2 a day.
Mexico
, a country that
throughout most of its history was able to grow enough
corn and beans to feed its people, now is the second
largest importer of corn from the U.S.
Activity
2:
NAFTA
Skit
Role
Play: This is an example of a model that can be adapted
to show how other producers are affected by NAFTA.
Situation:
Recruit
volunteers to represent Mexican corn farmers, corn producers,
U.S. corn producers, U.S. government, and Mexican government.
Conduct a skit to illustrate how NAFTA is played out
and how the rules of the game impact the different actors.
The objective is for students to step into the characters'
shoes and to consider the situations and dilemmas they
face.
Develop,
distribute and explain the props (subsidies to U.S.
corn producers, subsidies to Mexican farmers, bags of
corn to U.S. producers and Mexican producers). Then
explain that we are going to negotiate the NAFTA agreement
and this skit talks about how corn farmers in Mexico
are impacted. The following descriptions form the basis
for the dialogue and action:
U.S.
government :
With this free trade agreement we need to be able to
export more corn to Mexico and the import taxes need
to be reduced. Those are the rules. Another rule is
that you need to stop giving economic support to your
corn producers. (See below: U.S. continues to give help
to its own corn producers.)
Mexican
government :
Sounds good to me. I'll cut those subsidies and that
will save me money. (Walks over and takes subsidies
away from Mexican producers.) I'll take that subsidy
for seeds, fertilizers. Oh and I won't be giving you
money in case your crop fails.
U.S.
corn producers :
We still receive our economic help from the U.S. government
(large U.S. farmers received 9 million in 1999) AND
now we can sell a whole lot of our corn to Mexico .
Before NAFTA, we only sold just under a million tons
of corn a year to Mexico and NOW IT'S 6 MILLION TONS
A YEAR!
Mexican
government :
(saying to the Mexican consumer) Well now we are importing
6 million tons of corn a year and it's much cheaper
than the Mexican corn. You don't make a lot of money,
you are probably poor. So which corn are you going to
buy?
Mexican
consumer :
I'm going to buy what is less expensive. I'll buy the
U.S. corn.
Mexican
Farmer#1 :
I'm not getting any help from the government; U.S. corn
is cheaper and there is a lot of it being dumped into
Mexico . No one will buy my corn. I don't know what
I'm going to do.
Mexican
Farmer #2 :
My family has been growing corn for generations. We
have lived on this farm for many years. If I can't sell
corn anymore, I just don't know what I'm going to do.
Debriefing
of the role play :
As
a result of NAFTA, the Mexican government is required
to cut subsidies to corn farmers, meaning the government
no longer provides economic support to these farmers.
The government has also reduced its barriers to trade,
so that U.S. agribusinesses (large corporate farmers
who in this case produce corn) are now able to sell
their corn to Mexico . This scenario looks only at the
economic impacts on the corn market in Mexico . It does
not explore the cultural impacts on the crop central
to the lives of the Mexican people. (It would be an
interesting project for students to research the role
of corn in the lives of indigenous people.)
Does
NAFTA truly bring economic well-being to a majority
of Mexico 's poor? Who are the actors? Who are the winners?
Who are the losers? Who has the power in this model?
Who sets the rules? Do all parties obey the rules that
are set? Is there any process of appeal? What are the
students' thoughts about the situation created by a
free trade agreement?
Note:
Depending
upon instructor's knowledge of other free trade agreements,
e.g. CAFTA, this lesson can be expanded to include discussion
and comparison of the implications of other agreements.
DJPC
2004
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