On the plus side, trade between the three countries vastly increased, to about 3.5 times the 1994 levels, though U.S. trade with China and other Asian nations has grown even faster in the last two decades. More foreign automakers have set up plants in Mexico, which now produces about 3 million vehicles per year. Mexico has increased auto-sector jobs by around 50 percent since 1994.
But Mexico’s auto jobs are notoriously low-paying, and little progress has been made in closing the wage gap with the U.S. Average manufacturing industry wages in Mexico were about 15 percent of U.S. wages in 1997. By 2012 that figure had risen only to 18 percent. In some sectors, China’s wages have actually outstripped Mexico’s.
Nor has NAFTA kept all promises made on environmental front.
The North American Development Bank, part of the side agreements to the accord, has spent over $1.33 billion to finance border projects for drinking water, waste water and sewage treatment. But untreated sewage continues to flow and air quality remains low in many border communities.
U.S. exports of spent lead-acid car batteries to Mexico spiked 500 percent between 2004 and 2011. Authorities are only now beginning to consider certification requirements for companies that export batteries for processing to recover the lead.
NAFTA has done a very good job of protecting foreign investors, however. The trade pact set up binding arbitration panels, where investors can bypass the courts with complaints that government regulation unfairly affects their businesses.
The complaints are often against natural resource management or environmental rules.
Mexico and Canada have paid out about $350 million in damages to foreign investors, while the United States hasn’t paid any.
“The (arbitration) process is not like the domestic court system, it’s not fair and open,” said Scott Sinclair of the Canadian Centre for Policy Alternatives.