The North American Free Trade Agreement is dropping like a rock. The closer we look at NAFTA, the more it looks like a shotgun marriage between two countries with radically clashing economies and political systems. The problem with NAFTA goes well beyond the specter of Mexico's $1-per-hour wages sucking millions of U.S. jobs south of the border. A larger impediment is in Mexico's authoritarian political system: How do you have a free trade agreement with a country that doesn't have a free people?
NAFTA's partisans lay claim to the high ground of "change." But this is a false claim. In practice, NAFTA cements the status quo in Mexico by bolstering the oligarchy and one-party state that for 60 years have systematically suppressed free elections, free speech and a truly free economy in Mexico. It is no accident that in more than 2,000 pages of NAFTA text, the word democracy does not appear once.
The choice is not NAFTA or nothing. The United States must get behind real change in Mexico by putting democracy first. We must enunciate a broad vision for Mexico and the Americas that encompasses not just economics and trade, but also political and social reform.
To this end, I advocate a new approach to Mexico that spurs democratic reform by rewarding it with the carrot of expanded economic and trade privileges. This process would culminate in creation of a common market for the Americas: a partnership of equal democratic nations sharing a common commitment to political freedom and free markets.
Pointing to the European experience, Lester Thurow of the Massachusetts Institute of Technology argues that free trade agreements don't work but common markets do. From the 1960s through the 1980s, rich nations of northern Europe faced a similar challenge in integrating three undemocratic, underdeveloped nations--Spain, Portugal and Greece--into the Common Market. As a precondition to Common Market membership, the Council of Europe required these nations to adopt fundamental reforms. All three countries shucked off their authoritarian governments and liberalized their economies. In turn, the wealthy nations of Europe ponied up tens of billions of dollars in development aid to boost economic reform in the candidate countries.
This is precisely the course we must follow with Mexico before consummation of a Common Market for the Americas. Let us insist on democratic and economic reforms to narrow the gross disparity in income, labor standards, environmental safeguards and civil liberties north and south of the border.
This means demanding that our friends in Mexico make good on the lofty promises of their constitution. Absent such a demand, any trade agreement with Mexico would be a cynical vehicle for reinforcing the political status quo in Mexico, characterized by South American novelist Mario Vargas Llosa as "the perfect dictatorship."
In return for fundamental Mexican political reform, the United States must be generous in boosting our neighbor's economy during the transition. I propose granting relief from Mexico's external debt, which has spiraled from $80 billion two years ago to $120 billion today. We must also create a development fund to raise living standards and alleviate dislocations caused by lowering tariff barriers.
Let us think anew in our hemispheric relations. NAFTA thwarts the Mexican people's democratic aspirations while offering a future in which U.S. wages and living standards are "harmonized" downward to the Mexican level. In contrast, a European-style common market would seek to "harmonize" North America upward into a community of equal democratic nations with rising living standards. The choice is ours. And we do have a choice.