NAFTA and democratization in Mexico.

• Author: Heredia, Carlos A.
• Position: Contemporary Issues in World Trade

Can the Mexican political regime survive free elections in the NAFTA era? Will the combination of the January 1994 Zapatista uprising, the widespread cry for true political reform throughout the country and the increased international scrutiny of Mexico be enough to fuel a real transition to democracy? These are some of the questions being raised as the Institutional Revolutionary Party's (PRI) 65-year-old regime is under unprecedented pressure to discontinue its vote-rigging practices and deliver on its pledge of fair play for the presidential elections of 21 August 1994. At stake is whether the election process and the votes themselves will be credible and legitimate in the eyes of Mexican citizens for the first time since 1911. Analysts have already stated that the regime that was born with the 1928 homicide of president-elect Alvaro Obregon has passed away with the 23 March assassination of PRI presidential hopeful Luis Donaldo Colosio.(2)

The Mexican political system cannot be considered democratic. It has operated largely as a centralized, corporatist, one-party state with an extremely powerful presidency and subordinate legislative and judiciary branches of power. While the PRI and the government maintain that democracy in Mexico needs to be perfected and improved, most of the political opposition and citizen groups believe that reforming the existing structure will only suffice if the official party is clearly separated from the government. The PRI always has been both party and judge in the Mexican elections, and the government has been more interested in perpetuating PRI rule than in guaranteeing equitable conditions for electoral competition.

This essay will describe how Mexican civil actors view the link between the North American Free Trade Agreement (NAFTA) and the fight to establish a democratic process in Mexico. It will argue that the activism of civil groups has resulted in significant steps toward democracy in Mexico, including a stronger voice for citizens in determining public policy. It will also focus on the implications of international citizen networking on Mexican trade policy and democratization. Finally, it will assess how these developments have changed the relationship between the PRI regime and the increasingly active civil movements.

NAFTA had unintended -- and, for Mexican President Carlos Salinas de Gortari, unexpected -- effects that have made democratization in Mexico imperative. The NAFTA process has put Mexico under increased scrutiny, giving international exposure to Mexican civil groups and ultimately increasing their domestic influence. The battle over NAFTA shed light on the authoritarian nature of the Mexican regime, legitimizing the claims of critical voices inside and outside Mexico that the pattern of economic globalization embodied by NAFTA would exacerbate social polarization and work against the poor, undermining the process of democratization. Furthermore, Salinas's successor will take office in the wake of the Zapatista uprising for justice and democracy, which, contrary to what the damage-control operation of the Salinas administration has maintained, was not against progress, but about who defines it and how to shape it. Thus, the anti-establishment, supranational grassroots movement that NAFTA has unleashed has served as a catalyst for true democratization in Mexico.

THE TRADE-OFF BETWEEN ECONOMIC AND POLITICAL REFORM

In December 1988, upon taking office amid widespread allegations of election fraud, Salinas set out to achieve two main economic goals: sustained economic growth and the alleviation of poverty. Although a trade agreement with the United States was not in the government's plan at the time, deepening economic liberalization was consistent with the structural adjustment policies prescribed by the International Monetary Fund and the World Bank. An agreement such as NAFTA, it was thought, would stimulate domestic private investment and attract foreign investors, fueling the engine of renewed economic growth after six years of stagnation under Miguel de la Madrid, Salinas's predecessor.

While campaigning for president, Salinas did not propose liberalized trade as a tool for economic growth. His 1989 to 1994 National Development Plan did not include the prospect of a free-trade agreement with Mexico's biggest trading partner, the United States. Early in his six-year term, however, Salinas realized that the fall of the Berlin Wall could direct badly needed funds away from Latin America to Central and Eastern Europe. Meanwhile, the emerging markets of Southeast Asia continued to soak up scarce investment funds. The prospect of a trade agreement as a means to attract foreign investment was appealing. At the time, the Salinas government deemed it possible to forge an economic alliance with the United States while leaving intact the regime's elaborate machinery of political control. Economic prosperity from the alliance would dilute demands for democratization, since the 40 million Mexicans under the poverty line -- roughly half of the population -- were thought to be more concerned about satisfying day-to-day needs than about democratization.

What, then, was the basis of political support for Salinas's harsh austerity program, which controlled wages while liberalizing most other prices? It was the alliance of the top leadership of the official business, government, peasant and labor organizations -- brought together in 1987, late in the de la Madrid administration, by the Pact for Economic Solidarity and renewed every year until 1994 -- that permitted the Mexican government to implement structural adjustment policies. Since sectoral representatives to the pact are members or allies of the PRI, this corporatist mechanism allows the regime to impose its economic policy objectives top-down, in exchange for political offices, government contracts or business deals. By 1990, two years into Salinas's term, Mexico was once again being called a success story, as Salinas managed to drastically reduce inflation, achieve a fiscal surplus, privatize scores of public enterprises and keep wages down without experiencing the kind of social upheaval that other countries undergoing adjustment had.

A fundamental question remains unanswered: How can the state best combine economic and political reforms? In the case of Mexico, the trade-off was easily solved by Salinas. Salinas declared that Mikhail Gorbachev's perestroika failed because he had indulged far too much in glasnost, the political opening, before economic reform had become rooted in the Soviet Union. The opposite strategy, closer to the Chinese path, seemed more appropriate, keeping political control while implementing economic shock measures. In fact, right after NAFTA was passed in the U.S. Congress, Salinas confirmed that his priority was to ensure social stability, placing political opening on the back burner.(3)

Despite the alleged new Mexican economic miracle, a paradox began to emerge two years into Salinas's term. Although the macroeconomic picture seemed encouraging -- at least according to government statistics -- most Mexicans were having great difficulties making ends meet. Real minimum wages continued to fall, many small and medium-sized businesses were forced to close, unemployment and underemployment were rampant, and social inequality was sharper than ever. Salinas had to shore up Mexicans' expectations of better days in order to retain support for economic restructuring. So in April 1990, when the Salinas government decided to pursue negotiations with the United States leading to a trade pact, it took for granted that Mexicans from all walks of life would enthusiastically support the proposed partnership with the wealthiest economy in the world. Salinas was almost at the halfway mark of his six-year term, typically the high point of a Mexican president's power, the 1988 claims of electoral fraud appeared to have vanished, and there was no pressure to open up the political system. With its promise of prosperity around the corner for every Mexican, the trade pact seemed like the perfect vehicle to ensure social stability while pushing through tough economic reforms. Therefore, beyond Salinas's intention of making the passage of the agreement an endorsement of the Mexican regime, forging a consensus for the trade pact inside Mexico was not even deemed necessary by the government.(4)

NAFTA AND THE POLITICS OF EXCLUSION

In 1991, at the beginning of the NAFTA negotiations, the Mexican Trade Secretariat (known by its Spanish acronym, SECOFI) established an office to ensure that information would flow to and from labor, small farmers, academia and other nonbusiness, non-governmental sectors. This office was named the NAFTA Advisory Council, first headed by Socorro Diaz, a former speaker of the House of Representatives. She was followed by Margarita Ortega, another former mid-level PRI official. The problem with the Advisory Council was that its institutional design did not lend itself to a consensus-building process -- as is often the case in many agencies of the Mexican federal government. The Advisory Council was erected around the elitist, corporatist structure of the Mexican political system, bringing together the bosses of PRI-affiliated trade unions and small farmers' leagues and the government-friendly principals of mainstream national academic institutions -- all people with political and economic clout. By talking almost exclusively with these people, the government mistakenly believed that NAFTA had widespread public support.

For those workers, small farmers, urban poor and nongovernmental organizations that were not affiliated with the PRI and were critical of NAFTA, the message from SECOFI was clear: They could sit at the table and discuss trade policy, but the real nuts and bolts of economic policy would not be on the agenda. Rather, trade policy would be decided by the...