Topic: 4: NAFTA & US hegemony: Canada and Mexico ( Kit: Quintero-Ramírez; Mize, R.L.; Pantaleo, K; Wise, C. ; Wise. T.A.; Abboushi, S.) WST Trade liberalization and Neoliberalism Global Commodification

US hegemony Advanced industries, technology & market (P) Mergers and expansion of MNCs (NDL) Financial stability (P) Largest & desirable market for capital and for export (P) Mexico: Periphery Raw material based industrialization/ agriculture (Mexico)( unequal trade : UT) Development model – locked in by US market (oil demand & manufacturing) (lack economic resistance to US market) Export dependence (since 1970s, oil to pay debt dependence on US) Smaller domestic market & lacks LAm’s economic development pull NAFTA: Comparing US and Mexico

US hegemony Advanced industries, technology & market (P) State support of MNCs: Mergers and expansion of MNCs (NDL) for capital accumulation Neoliberalism, Washington Consensus, market liberalization Financial stability (P) Capital flow from and dominant pull of the largest market for export (P) Canada: Semiperiphery Continental integration of raw materials industries ( heaviest, bulkiest, and largest volume, e.g., petroleum, iron, coal, aluminum and copper, for industrial production.) Promote higher technology manufacturing and service sector industries as the Development Model Maintain export dependence on US as a secure market ( U.S. negotiators aimed for and got 'secure and enhanced access' to Canada's resource sector) Smaller domestic markets & less globally powerful NAFTA: Comparing US and Canada

Canada (Semi-periphery) Manipulative power Different goals in negotiating CUFTA: protect resource and manufactured exports from U.S. trade discrimination (stronger State and econ stability) Regulated NAFTA ties with US but weakened by continentally integrated economy 1980s: NEP (National Energy Program), of Canadian government aimed at self-reliance in oil and natural gas & increased investment & production & restricted exports Restrictions on US re: foreign ownership of petroleum, uranium production, mining leases, transportation industries Mexico (Periphery) (Weaker state and dependence on Core and semi-periphery) Different goals in negotiating NAFTA: promoting economic and political restructuring were central (lack powerful and stable State) Locked in dependence on exports of oil and raw resources & US industries shaped its econ. development Mexico, a major world producer of lead and zinc, pollution intensive production, drew U.S. investment (UT) US demand for bulky/heavy raw resources has continentally tied Mexico to the capital and markets of US & Canada NAFTA: Comparing Mexico and Canada

What is hegemony? Arrighi (2004): When a state uses its economic, political, military and cultural power to control a group of sovereign states. Arrighi, G (2004). "Hegemony and Antisystemic Movements". In I. Wallerstein, ed., The Modern World-System in the Longue Duree. Boulder, Co: Paradigm Publishers, 2004

Core: NAFTA & US : Ciccantell, P. (2001) 1. Problems of U.S. & its MNCs: How did they solve insecure supplies of the raw materials ? Ciccantell, P. (2001). Canada’s & Mexico’s oil, natural gas, and other natural resources 2. Why was US interested in these supplies? To reduce MNCs’ cost of production for U.S. to advance their competitiveness. (Ciccantell, P (2001). NAFTA and the Reconstruction of U.S. Hegemony: The Raw Materials Foundations of Economic competitiveness. (Statistical Data Included), Canadian Journal of Sociology, Winter 2001 v26: 1, p57)

Core: NAFTA & US (cont’d): 3. What does US as a hegemon want to monopolize in the world? Cheap access to heaviest, bulkiest, and largest volume of raw materials Maintain its hegemony to extract raw materials at low costs from the peripheries.

WST explains Core’s Globalization agenda & its consequences to the peripheries Expansion of US Hegemony: (read: Ciccantell, P: 2001) Enforced uniformity in development Hegemonic control over technologies Unsuitable, costly & centralized solutions Lack of locally effective problem solving

Peripheries: NAFTA Periphery: Mexico Semi-periphery: Canada Arguments you need to integrate in the essay: 1.Wise T. A.(2011): Hegemony and dumping 2.Abboushi, S (2010): US trading power, US disregard for agreements, land-ownership structure vs. strategy of acquisition; and Managed (not Free) trade 3.Quintero Ramirez (2002) NAFTA deindustrialized & depressed labour conditions in Canada and exploits workers in Mexico

Wise, Timothy A. (2011) (in course kit) NAFTA + U.S. Farm Subsidies Devastates Mexican Agriculture 8.23 min Dumping margin In a case of dumping, the difference between the "fair price" and the price charged for export. Used as the basis for setting anti-dumping duties. price anti-dumping duties

4. DW# 13 : Subsidies kill free trade bet. poor agri. countries and rich countries (Eshelby, 2006) 5. Susan George: WTO is ineffective you tube uploaded May 5, 2011) 6. Wise, R.D & Cypher, J.M (2007). Cheap-labor embodied Mexican exports but not achieving new high-value added production or specialization. Source: The Strategic Role of Mexican Labor under NAFTA: Critical Perspectives on Current Economic Integration, THE ANNALS OF THE AMERICAN ACADEMY, March Carol Wise (2009): Regional market integration of US, Canada and Mexico has been superseded by China’s use of NAFTA to facilitate its entry into US through Mexico

8. Gandasegui, M.A (2006) Kit #18: Using its hegemony, US wants to gain advantages over 4 areas in making trade agreements with each country in LAm : 1.Government contracts 2.Pharmaceutical markets 3.Agricultural markets 4.Intellectual property (GRAIN 2004).

9. Ciccantell (2001) Continental integration of raw materials industries to reconstruct U.S. hegemony 10. Cormier & Targ (2001) Globalization led to workers’ poverty & global income inequality Cormier, D & Targ, H, (2001) Globalization And The North American Worker. Labor Studies Journal, Spring 2001 v26 i1 p42 Paul Ciccantell (2001). NAFTA and the Reconstruction of U.S. Hegemony: The Raw Materials Foundations of Economic Competitiveness. (Statistical Data Included), Canadian Journal of Sociology, Wntr 2001 v26 i1 p57

Why Canada, a nation-state is ineffective in controlling its branch plants? (Why cannot Canada control its own sovereignty, taxation and borrowing?) U.S. hegemony It ensures that its huge sunk capital in raw materials overpowers Canada’s claims to sovereignty

How does NAFTA de-industrialize & depress labour conditions in Canada and exploit workers in Mexico? (Quintero Ramirez: 2002) By: Reducing the number of full-time jobs Subcontracting work outside the plant Increase of part-time workers Piecework outsourced to home work

Why a nation-state is ineffective in controlling its branch plants? (Why Canada cannot control its own sovereignty, taxation and borrowing?) U.S. hegemony It ensures that its huge sunk capital in raw materials overpowers Canada’s claims to sovereignty

How does NAFTA de-industrialize & depress labour conditions in Canada and exploit workers in Mexico? By: Reducing the number of full-time jobs Subcontracting work outside the plant increase of part-time workers as piecework outsourced to home work