Mexico: NAFTA and the Drug War 1994-2013

What is the contribution, if any, of NAFTA to the Mexican Drug War?

Few of the 21st century conflicts have been as misunderstood as the so-called Mexican Drug War. Since 2006 ‘at least 70,000 people have been killed’, although the anarchic nature of the conflict makes estimates difficult, and many predict higher figures (Hastings. 2013). This violence did not emerge out of nowhere and the conflicts causes and foundations were historically constructed, to echo a constructivist view. This paper shall explore the extent to which NAFTA (North American Free-Trade Agreement) is responsible for both creating and enhancing the conflict now engulfing Mexico. Briefly providing background to the conflict with an explanation of NAFTA, the paper will provide key arguments supporting the debate for NAFTA’s contribution to the war. I will argue that the project of neoliberalising the Mexican economy, culminating in NAFTA, is largely responsible for creating both the foundations, and sustaining the Drug war, however also acknowledging that NAFTA is not solely responsible for the ensuring violence and other factors have played major roles. Analysing the causations, attitudes and actions taken, I will utilise a range of International relations theories, in particular Liberalism, Realism, Critical Theory/Marxism and Constructivism to aid the paper.
While drug trafficking in Mexico is no recent phenomena, the scale of drug trafficking, violence and power of the Mexican drug cartels are recent phenomena’s. Emphasizing this, some argue that the cartels have become one of the country’s largest employers, ‘bringing an estimated $25 to $40 billion into Mexico every year…making more money than the oil industry, the largest legitimate industry’ (Lange. 2010). From a liberal perspective the drug industry has been one of the few successes of Mexico’s recent economic performance, providing Mexico with a comparative advantage unmatched in the hemisphere. Whereas a realist would perhaps argue that the cartels violence and power pose a threat to the Mexican state, there position would be compromised attempting to analyse the blurred lines between where the state officials end and the cartels begin.
The Mexican PRI party (Partido Revolucionario Institucional) held power for 71 years dominating the 20th century politics and its legacy is crucial to understanding NAFTA and the Drug War. Influential in most spheres of Mexico, the state employed vast amounts through: Mexican ‘parastatal enterprises’; CONASUPO stores selling state-subsidized goods; and Ejido common land: guaranteeing rural peasants a basic livelihood (Watt & Zepeda. 2012, p.124-25). The PRI’s firm grip on power meant citizens of most social divides had some sort of political representation while the drug cartels became integrated within the PRI political body on a ‘cliental basis’ (Watt & Zepeda. 2012, p.50-51). Thus from a constructivist analysis, the PRI government and the drug cartels had an historical on-going relationship with infused drug money throughout the government reflecting this.
From a critical theorist’s standpoint, Mexico, characterised by import-substituted-industrialism, was a periphery state, relying on exporting raw resources such agriculture, oil and mining to the industrialised nations (Cockcroft. 2010, p.79). However Mexico’s protectionism, solid development and basic industrialism allowed greater economic control over outside influence than other periphery states in Latin America. Nonetheless they were still in a relationship of dependence thus the financial crisis of 1982, following the increased interest rates of US banks whom Mexico was deeply indebted to, was arguably an expression of the dependency theory (Watt & Zepeda. 2012, p.70-71). The crisis’s consequent austerity measures devised by the IMF, Mexican government and US treasury triggered dramatic privatization of Mexico’s economy and state involvement, subsequently resulting in the 1980s being labelled the so-called ‘Lost Decade’ as living standards for average Mexicans severely regressed (Roos. 2012). The rapid change from protectionism to neoliberalism shocked Mexican society: 50% were thrown below the poverty line; ‘average wages fell between 40 and 50 per cent’; ‘expenditures on critical urban services plummeted’; while emerging nuevo-rich like Carlos Slim became instant multi-billionaires (Harvey. 2005, p.101). Following this NAFTA was introduced.
NAFTA, a free-trade agreement between Canada, the US and Mexico, became, ‘in terms of GDP…the biggest [free-trade agreement] worldwide’, though unlike within the EU ‘common frontiers became increasingly closed to workers’ and ‘NAFTA has little interest in developing thorough common policies’ (Watt & Zepeda. 2012, p.117-118). Therefore some argue NAFTA represents a very one-sided trade agreement, as the ‘US controls around 85 per cent’ of the economic production, allowing the nation to dictate terms of the agreement employing double-standards for areas such as agricultural subsidies (Campbell. 2001). From a Critical theorist perspective, NAFTA somewhat represents a microcosm of the dependency theory for ‘both Mexico and Canada depend on the production and export of primary resources to the United States’ who remains at the centre of production (Watt & Zepeda. 2012, p.118). Thus from a Marxist analysis NAFTA represented a windfall for wealthy US capitalists who became the central figures within NAFTA, while for Mexican and Canadian big capitalists NAFTA provided swifter access to foreign capital and markets, their trade remained largely dependent upon their US counterparts. For the working-classes, small businesses and those without ‘control over the means of production’, NAFTA was a disaster, disposing union power, creating a “flexible” (exploitative) working-environment, and eliminating protection for small business, farmers and peasants to survive competitively (Marx. 1967, p.79). Twelve years after NAFTA’s establishment Mexico’s Drug War commenced, and this paper shall now argue why the trade-agreement laid the foundation for the conflict.
Privatization, accentuated following NAFTA, largely relocated economic power from the Mexican state to private corporations. State-employees had their workplace swiftly privatized and redundancies were common-place as workers’ rights within Mexico were undermined by new laws granting employers a workforce “competitive” for NAFTA. The speed of privatization before and following NAFTA allowed well-moneyed Mexicans to buy up whole industries, creating oligopolies controlling key sectors of the economy that had been commonly owned, paid for and accessible. However few sectors of Mexican society suffered worse from NAFTA than small-scale farmers, peasants and those working the Ejido land. A key aspect of NAFTA was the slashing of subsides for necessities (i.e. medicine and foodstuff), tariffs and state protections that allowed peasants and farmers to uphold a basic livelihood. Now without sufficient support, millions of ordinary Mexicans had their agriculture exposed to the fluctuating free market, while likewise costs for basic products skyrocketed. However NAFTA went further and exposed farmers to US heavily-subsided agriculture much of which is sold below the costs of production, undercutting Mexican famers who already struggled from the other factors mentioned (Albritton. 2009, p.5-6). Given the influx of subsidised US agriculture, only large-scale Mexican farmers, able to produce enough to cope with the value-decrease, remained competitive. Adopting Liberal economic perspectives, as the Mexico government did, meant investment would occur only in areas of comparative advantage within NAFTA, thus small-scale farming served no purpose. This emphasis on comparative advantage greatly undermined many of Mexico’s prior industries as besides raw minerals, narcotics and cheap labour, Mexico had very little else competitive with the US, reflected by Mexico’s dependence upon the oil industry, tourism, sweatshop manufacturing, remittances and the drug trade (Waring. 2013). This echoes critical theorists dependency theory which argues that the economies of periphery states remain subordinate to the interests of the core states, which considering: the oil is mostly exported to the US; the manufacturing belt in the north of Mexico is largely owned by US companies; the tourists are mostly from the US; remittances are sent home from workers in the US; and most narcotics are sold in the US, serves as a valid analysis for Mexico’s economic dependency (Waring. 2013). Thus for the narcotics industry, NAFTA and its resulting effects were a godsend. Indeed simply due to the vastly increased border-crossing of trucks, planes, cars and improved roads, NAFTA has allowed cartels far easier access to their key market in the US. Additionally the increase in trade has also gone the other way with ‘more than 90 percent of the guns recovered in Mexico coming from the United States’, legally or illegally, taking advantage of the increased movement of trade (Obama cited in Chastain. 2013).
One major contribution of NAFTA to the drug-war was the immense jobs losses from state employment and small-scale farming, sending millions in search of work elsewhere, leaving the countryside for urban centres. Meanwhile the drop in wage value forced others still employed to search for extra work to support their families. For the unemployed following NAFTA three choices usually greeted them: migrate north to the US; work in the sweatshop manufacturing belt in the North; or work for the only industry where wages remained consistently high: the narcotics industry. The former two shall now be explored.
Following NAFTA, US manufacturing was largely outsourced south of the border to take advantage of the cheap labour and little transport cost, thus building the Maquiladora belt in Mexico’s north (Lederman & Oliver. 2013). These foreign-owned plants created, in critical theorist analysis, billions of dollars worth of added value for US companies through the sweatshop labour in areas such a garments and electronics, nonetheless over a million jobs were added by 2000 (Watt & Zepeda. 2012, p.158-159). However because females are preferred in sweatshop labour, millions of unemployed men now inhabited these zones, providing perfect foot soldiers for the cartels. Additionally from a constructivist view, joining cartels often psychologically empowered unemployed men, giving them the illusion of power so highly valued in Mexico’s patriarchal society, where in reality women were the ones legitimately employed (Hellman. 2009, p.40). However the pay itself from the Maquiladoras, given the level of wage exploitation, often meant families required supplementary income anyway, while the slack of job security often created a hire-and-fire environment, breeding large pools of unemployment, perfect for the cartels (Watt & Zepeda. 2012, p.160). These factors are enhanced by the close proximity to the US border, principle zones for trafficking and cartel competition, thus violence is most frequent in these states. Lastly the boom of cheaper outsourcing in China and south Asia since 2000 has halted creation of Maquiladora jobs, and while not directly NAFTA’s fault, the trade-agreement is responsible for initially creating the large communities, for whom legitimate employment opportunities have now stagnated, thus breeding other forms of employment (Mercille. 2011, p.1642).
Another option for NAFTA’s disenfranchised is migration into the US, and considering remittances, after oil, are Mexico’s 2nd largest legitimate industry, the incentives are high. Indeed Ensinger argues that NAFTA ‘has been the catalyst for the massive increase in illegal immigration into the US’ reinforced by the fact that ‘since NAFTA was signed into law, illegal immigrants in the U.S. has increased to 12 million today from 3.9 million in 1993’, an increase too large to be coincidence (2011). The massive migration north contradicts the post-NAFTA US policies such as ‘Operation Gatekeeper’ which reinforced border security emphasizing how increased migration results from NAFTA (Henderson. 2011, p.3). The ideological-perception common throughout Mexico often views these migrants as ‘failures, sub-human and worthless’, thus atrocities and mistreatments are regularly carried out with impunity in the journey north (Hellman. 2009). This perilous journey is regularly intercepted by cartels, which often kidnap migrants for ransom or work. For the drug cartels, this immense movement of desperate people north presents an ideal opportunity for recruiting foot soldiers, drug mules, and prostitutes all of which have helped strengthen the cartels control and the narcotics trade. Hence constructivism illustrates how indifference to immigrant’s fates allows cartels to exploit and abuse them to fortify control, utilizing the increased migration following NAFTA.
For farmers unwilling to leave their land though unable to receive liveable returns for traditional crops following NAFTA, the narcotics industry was often a necessary option. Watt and Zepeda argue following NAFTA ‘a kilo of illicit drugs fetched 300 times more than one of maize…and more than a ton of beans’, furthermore ‘unlike corn, coffee and beans, illicit drugs are less subject to price fluctuation, consistently fetching a high price’ (2012, p.166). Therefore farmers often joined cartels out of desperate necessity. Additionally land abandoned by peasants was regularly co-opted by cartels, reflected in one Mexican study that suggested ‘of the 31 million hectares of arable land, [approximately] nine million are devoted to growing illegal drugs’ (Watt & Zepeda. 2012, p.167). These are clear symptoms of NAFTA, supporting the liberal theory of comparative advantage, as aided by strong market demand; illicit drugs constitute the major industry Mexico remains competitively strong.
Nevertheless NAFTA alone does not explain the drug war and other factors both domestic and international must be analysed for their strong contribution. The first major non-NAFTA contribution was the PRI’s election loss in 2000 to the National Action Party (NAP). This broke government control over the drug cartels characteristic of prior Mexican politics, allowing cartels greater independence (Morton. 2012, p.1641). However the 2006 elections saw the PRI comprehensively defeated by PAN, unlike in 2000 where they marginally lost and retained influence (Mercille. 2011, p.1643). Hence when 2006 President Calderon came to power, the cartels had truly broken free of any government control, and although corruption remained within government sectors, no longer were the cartels subordinate to the government. Therefore a constructivist view of Mexican history illustrates how PRI’s legacy of control over the cartels built the foundation for a power-struggle crisis whenever they lost power, a central contribution to the drug war. This contradicts liberal perspectives which assume democratization enhances peace and stability.
Secondly Calderon’s response having lost control over the drug industry after PRI’s defeat was to view the situation through a realist paradigm, assuming military force would ensure stability and control. This results undermined a realist position, although not designed for domestic politics, as rather than quell the cartels power, since 2006 the cartels have grown in power, drug production has increased, and the death toll has skyrocketed (Mercille. 2011, p.1638). Hence without the constructivist analysis of the situation: dealing with historically infused corruption and economic factors sustaining the cartels, a realist position is compromised.
Thirdly the 1990s saw the ‘decline and fall of Colombia’s major drug gangs, once the undisputed masters of the illicit drug trade’, following massive anti-drug crack-downs coordinated by the Colombian and US governments (Beckhusen. 2013). However for the cocaine industry, this did little for continuing market demand and thus the cocaine grown in South America is now subordinate to strong Mexican cartels, instead of Colombian (Marcy. 2010, p.175). Hence ‘it is estimated that 95% of US cocaine consumption transits through Mexico from South America’ greatly increasing the power of the Mexican cartels (Mercille. 2011, p.1637). Thus realist answers to the drug trade sought by the US and Colombian governments are undermined by a liberal paradigm which proves that while there is high market demand and high profits for drugs, there will remain suppliers.
Lastly are US policies towards drugs and arms. The drug-demand within the US fuels the narcotics trade and while this remains, groups will continue to deliver drugs into the US. The strict drug polices enacted under President Bush only increased the price of drugs and cartel profits, thus raising incentive for trafficking. The conservative attitude common within the US means pragmatically approaching drug related issues remains controversial with their threat continually sensationalised. Thus reforming strict drug laws becomes far harder than creating them. Therefore constructivism elucidates how ideology within the US perpetuates the anti-narcotics milieu: fuelling belief that prohibition and securitization remain the only means for control. Additionally, constructed US narratives with gun ownership allow cartels swift access to the immense armoury north of its border: explaining the high frequency of small-arms characterising the drug war. Both these US domestic issues are constructed ideologies and have proved devastating in contributing to the drug war. Thus these vital factors outside NAFTA demonstrate that despite NAFTA’s centrality, it’s not solely responsible for the drug war.
This paper argued that key aspects both sustaining the drug cartels and creating the foundation for conflict are direct symptoms of NAFTA. Although several other key factors outside NAFTA have contributed to the Drug War, they supplemented foundations provided by the free-trade agreement. A Marxist/Critical Theorist approach illustrates how NAFTA created the basis for continual cartel support, and highlights the trade imbalances between NAFTA fuelling the drug industry out of necessity. Likewise a liberal rational helps explain NAFTA’s contribution to the drug industry, drawing on comparative advantage, supply and demand, and mutual interdependence. That some argue the drug industries disappearance would shrink the ‘Mexican economy by 63%’ proves how one doesn’t need to be a Marxist to understand the drug-trades rationale (Morton. 2013, p.1638). Additionally constructivism shows the historical situation into which NAFTA was imposed, along with the constructed legacies and narratives that contribute to naturalizing the current positions sustaining the drug war. These crucial IR theories help explain the realities of the Mexican drug war and the desperate need to look beyond realism at underlying problems sustaining the conflict which, unless overcome, perpetuate the violence.

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