Posted tagged ‘NAFTA’


February 8, 2011

Erle Frayne D. Argonza


Good day to all fellow global citizens!


In a previous article, I wrote about the possibility of mafia states rising to power. As tackled, Belarus could very well be the start of such a mafia state should it get entrenched for long, so the events there are worth watching. Meantime, a drug war ensues in Mexico, and so let us do some reflections about that war.


Over 36,000 were already declared dead due to the drug war in the country of patriot Emiliano Zapata. The war that was declared by then president Calderon ensues ceaselessly, deaths thus rising in seemingly exponential fashion by the year. That war is proving too tragic for the NAFTA country, and bodes ill for the entire North America as both the USA and Canada are experiencing their own hotfires of economic malaise.


To recall, Colombia was the nest of drug cartels’ power just about a decade ago. With the effective clipping of the powers of drug lords there, drug lords’ lairs became more diffused thereafter, no longer to be ever concentrated in just one country in Latin America.


Mexico, Jamaica, Brazil, and other countries are now experiencing the growing powers of mafia lords in Latin America. Mexico seems to be the most vulnerable to entrenchment by the drug cartels since the country is just a step away from the United States that is the main drug market in the Americas.


Americans indeed are the most voracious drug users, so that one may wonder whether Americans are still holding own to their nature as humans—that they haven’t already tipped over to their demonic side. A research done in the early 1980s yet showed that as much as 40% of high school students admitted to having used a narcotic at least once, with 20% admitting to having used narcotics repeatedly.


That was the 1980s cited, and it is now 2011 or the 2nd decade of the 21st century. Drug use there has been growing steadily, and so it is safe to infer that over half of Americans are hooked into narcotics. Those heavy users of drugs may be less than 10%, but that still counts around 25 to 29 millions of Americans forever dependent on narcotics.


Next to America would be the European Union or EU. Nobody knows exactly the level and frequency of drug use there. But given the huge 450 million population, even just a 5% heavy usage would translate to 22.5 millions of Europeans heavily dependent on narcotics. At least over a hundred millions more are moderate or non-dependent users.


So it isn’t difficult to see why drug trade is so lucrative a business. In my country alone, drug production and trade is a whopping $10 Billion industry, and that estimate could well be under-estimated. Drug user count here is moving up the ladder too, while the Asian and American markets are also active destinations of drug exports.


Going back to Mexico, it may not be accurate to just cite the American market as the sole impetus for drug production and trade there. Mexico itself has a large population, enough to absorb a very large portion of locally produced narcotics. And there is South America that very well serves as a huge backyard in the Latino world for any salivating drug lord to flood with low prized narcotics, thus ensuring big bucks to the criminal honchos’ pockets.


With a string of conservative governments installed from the late 90s through the present, the paranoia towards drug cartels is understandable. The same conservatives unleashed the sword of a crusade versus the drug lords who are now being hunted down in the same way that heretics were tracked down and massacred by the Church during the infamous Inquisitions around the globe.


Insurgents used to be top national security threats in Mexico, but that fizzled out much later. The last insurgent group Zapatistas were a ragtag peasant group in an erstwhile urban-led Mexico, and that group’s potency fizzled out as soon as its uprisings were mounted.


Now the drug mafias comprise the major national security threat to Mexico, or that is what the Inquisitionist conservatives want Mexicans to believe. So huge is the anti-drug Crusade that the entire machineries of military and police are engaged in large-scale offensive operations that are akin to facing men-at-war in a conventional war between conflicting nations.


Keen observers are noticeably irked at the rather excessive force being used to stump out drug mafias in the country. The paranoia is simply too much, the force is excessive, and so expectedly the ‘collateral damage’ of the war is proving too much for ordinary citizens caught in between the violent fireworks.


Mexicans should better exert efforts to bring down that paranoia and bring back the Mexican central government to reality. Mafia groups ought to be stumped out all right, but the war need not be in the vogue of a full-scale war akin to engagement in a world war.


[Philippines, 03 February 2011]




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July 14, 2008

Erle Frayne  Argonza

The public (in America) is of the broad position that the NAFTA was responsible for the folding up of many factories and the transfer of jobs to Mexico/South. This NAFTA-bashing has some validity to it, but the semi-economic integration alone with Mexico and Canada isn’t a sufficient reason for the bigger problem of de-industrialization.

Once robust and colossal, the industrial sector of the USA contributed over 50% of the Gross Domestic Product or GDP, and employed half the labor as well. As early as the mid-50s, the futuristic sociologist Daniel Bell already warned that the trend wouldn’t hold long enough, as the ‘post-industrial society’ was already knocking its doors on the USA. Not only that, he also forecast that by the 21st century, the center of global economic growth would be the Asia-Pacific, while labor would shift to the services sector.

Had the policy-makers heeded the warning of the likes of Bell then, and fine-tuned the ‘real economy’ principles of Franklin Roosevelt, the de-industrialization of America couldn’t have happened. By the early 1980s, Alvin Toffler added resounding echoes to the forecast of a post-industrial society, by adumbrating the  ‘3rd wave technology’ thesis. Such a thesis expounded that knowledge-intensive technologies would dominate post-industrial society, and will destroy institutions founded on old economic-ideological precepts notably liberal capitalism and socialism.

However, the neo-liberals led by Friedman and Hayek became the dominant Pied Pipers in shaping the public policy of America. All sectors of the economy soon became dog-eat-dog arena for private sector hegemony, leading to the ascent of the ‘virtual economy’ founded on predatory finance. Gradually did the ‘virtual economy’ wreck the classic industries of America, the most exemplary being the steel industry.

The tragic closure of Bethlehem Steel tells it all: that the ‘virtual economy’ has no interest in sustaining strategic industries or to develop their technological edge further. One after the other, manufacturing concerns were closed shop, dis-assembled and re-assembled in emerging markets where labor and factor inputs were cheaper. The ‘industrial belt’ of America—stretching from up New England down to the automotive & machine tool shops of the south—is rapidly evaporating.

The clear message for this year’s presidential poll in America is: resuscitate the industrial sector. Re-tool both the hardware, institutions and human resources to make them competitive again. Revive all the strategic reproducible industries (steel, machine tools, railways, automotive, shipping, airlines, etc.), or else face the specter of ‘third worldization’ of America. A tall order, but what choice does the USA have?

[Writ 06 June 2008, Quezon City, MetroManila]


April 28, 2008


Erle Frayne D. Argonza


[Writ 23 March 2008, Quezon City, MetroManila]


In a recently written book by me titled Fair Trade and Food Security: Framework and Policy Architecture (Kaisampalad, 2004), I was able to gather clear evidences of the failures of free trade policies. Not only free trade but the whole policy regime of economic liberalization—that paved the way to globalization—had downgrading effects on our currency, agriculture, and industry here in my home country.


I argued right then for a policy reform in the direction of fair trade. The totality of policy change should be the re-crafting of the entire policy architecture, which if commensurately followed can become fitful guides for foreign policy and diplomacy.


In the light of the massive acceptance of liberalization policy frameworks in the 80s and 90s, I gave their advocates a chance to prove the potency of free trade and laissez faire in general. In the long run, free trade is unsustainable, and can only be perpetuated, as shown by the experiences of the previous centuries, by imperialism.


Autarchy, which was experimented in the Hapsburg empire, is more of a hermitage option that can work only if, as the Hapsburg had fittingly shown, the domain for intra-trade exchange and distribution is large enough. The option, even for nationalist economics, is for the conduct of overseas trade. But whether his has to be a free trade option is contentious.


The British Empire, which calls itself by the euphemy British Commonwealth of Nations, is still alive today. That empire was built precisely because it is the only way by which Great Britain, or England, can sustain its trading edge through the power of the ‘stick’. But this empire, the last among the ancien regime formations, is now crumbling, and cannot hold water for long as the member nations continue to assert their sovereignty.


Globalization based on free trade had already crumbled, as we can see. Unless there is another perception out there. It had failed. What I am arguing for now is that globalization can succeed only if it takes into consideration the interests of nations and marginal sectors within them rather than be based on the interests of a chosen few of financier oligarchs and their TNCs.


The contention from the article New Nationalism is shown en toto below.


Let ‘unbridled free trade’ give way to ‘fair trade’.


In the international trade scene, the President had declared it emphatically: “no to unbridled free trade!” Fair trade should be the game in trade, not free trade. This does not mean a full return to protectionism, which proved counterproductive in the past. Protectionism had only served rent-seekers, who did not engage in full-scale S&T innovations that could have propelled us to advance in product development, achieving world-class standards in many of our articles of industry & trade quite early. Returning to a regime of protectionism is surely out of the question.


Permit articles of imports to come in, employ this strategy to meet ‘commodity security’ and keep prices at competitive rates, while minimizing the possibility of shocks. This should also challenge domestic market players to become more competitive, precisely by engaging in dynamic research & development or R&D, resulting to higher-level product innovations (intended for the domestic market). Meanwhile, continue to institute a regime of ‘safety nets’ and strengthen those that have already been erected. However, where ‘infantile enterprises’ are barely out of the take-off stage, e.g. petrochemicals and upstream steel, provide certain tariff protection, but set limits up to that point when dynamic R & D have made production more cost-efficient, permitting thereafter competitiveness in both the domestic and global market. The latest move of government to provide the greatest incentives on upstream steel, for instance, is a right move, as it will entice market forces to install our long-delayed integrated steelworks.