Photo courtesy of Jonathan McIntosh on Flickr
Where Trade and Latin American Immigration Meet
Concern over President Trump’s “zero-tolerance policy” has been a constant in the news as of late, highlighting immense public criticism over the immigration policies that separated families at the border. Although this criticism led President Trump to sign an executive order ending family separations, any serious discussion about how to eliminate the demand to illegally enter the United States is notably absent from the immigration debate. Advances can be made to avert the high levels of immigration. The long-term key to helping these families desperate to escape their countries is attacking the root cause of the issue: economic and political turmoil in their home countries.
The US can help alleviate the need to emigrate by partnering with Latin American countries and backing stable governance, and supporting the creation of more regional free trade agreements. Importantly, these agreements must account for and support those that reap the negative consequences of such agreements—usually farmers and small company owners.
The importance of strong and fair governance in countries is important for stopping the violence that occurs. Venezuela has been rated as the most dangerous country in the world for the second year in a row—in part due to a weak and unstable government. Additionally, in Mexico, a politician was recently killed —the 112th Mexican politician to be murdered since September 2017. This underlines the instability of governance in the country, and the need for reform and support. Weak governance breeds violence, disarray, and the need to emigrate. The US should support Latin American populations and their desire for effective governance by backing institutions that call for democratic reform.
Economic support is also important to implement. The US has already implemented several FTAs with the region. These include: The North American Free Trade Agreement (NAFTA), the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), and bilateral FTAs with Chile and Peru.
FTAs are important for the global economy. Properly negotiated agreements eliminate tariffs, improve market access for companies, reduce barriers to trade, advance trade transparency, protect patent rights, instill environmental and labor protection, and connect economies on a global scale.
NAFTA did its job in integrating the Mexican economy with Canada and the US. Regional trade increased from $290 billion in 1993 to over $1.1 trillion in 2016. Additionally, US FDI stock in Mexico increased in the same period from $15 billion to over $100 billion. NAFTA also tripled Mexican farm exports to the US, and created thousands of auto-manufacturing jobs in the country. Furthermore, many reports found that the FTA had a beneficial impact on Mexican productivity and consumer prices.
However, concerns rose about an increase in Mexican unemployment. Many believe that the increase stemmed from NAFTA’s effect on Mexican farmers– as they were unable to compete with subsidized US agriculture– must be accounted for in future FTAs. When farmers and other small business owners cannot compete with the success of larger businesses, they sometimes turn to producing illegal, but profitable, crops (like coca, poppies, and marijuana) or to contributing to drug cartels directly. This promotes the violence and instability that leads many to emigrate. Future FTAs, and modifications to those existing, must account for, support, and stabilize smaller businesses and farmers. Aid programs should compensate these groups in the short term, and be geared toward increasing their ability to compete in the long term.
US operations should replace the ‘trade, not aid’ slogan with ‘trade plus aid’—for the short term. To do this, the US should finance worker training and technical assistance to smaller firms. To account for the long term, the US should partner with Latin American countries in stabilizing smaller businesses and farmers. Protections must be included in FTAs to support these minority groups. The US should ensure foreign aid programs reach Latin American farmers and their businesses, since they usually lose during trade openings due to the fact that they have less resources and input. It is important to make sure aid and development programs are actually aimed towards creating the ability for these economies to sustain themselves, and that they boost the ability of smaller businesses to compete.
Additionally, the US must abate large agribusiness and other “big companies that are engaged in real predation” since “such market power ultimately may be the real issue for farmers worried about trade agreements.” Furthermore, programs should be instated to increase productivity for small businesses and farmers.
Improving relations and creating better trade alliances with Latin American countries, and accounting for any negatives that arise with such trade agreements, will not only strengthen Latin America as a whole, but will lower the need to emigrate to the US. In doing so, it will decrease the many issues that come with current immigration policies.
