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"The Shifting Expectations of Free Trade and Migration"
in NAFTA's Promise and Reality: Lessons from Mexico for the Hemisphere
By Demetrios Papademetriou

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Press Release:

Ten years ago, government officials in the United States and Mexico argued passionately that the North American Free Trade Agreement would reduce illegal immigration into the United States by encouraging job growth in Mexico. These expectations were never realized: the population of unauthorized Mexican immigrants in the United States more than doubled between 1990 and 2000 and has continued to grow in the new century.

In NAFTA's Promise and Reality: Lessons from Mexico for the Hemisphere, Migration Policy Institute Co-director Demetrios Papademetriou argues that a combination of economic and social forces eclipsed NAFTA's potential to curtail illegal migration. The report, recently published by the Carnegie Endowment for International Peace, examines trade liberalization and its impact on the quality of life in North America, particularly in Mexico.

Papademetriou discusses several factors that have dampened NAFTA's promise to stop illegal immigration. These include:

• The booming U.S. economy of the late 1990s that created a powerful demand for Mexican workers;
• A major financial crisis in Mexico in 1994, in which the value of the peso dropped by more than 50 percent, and from which wages in Mexico have only recently fully recovered;
• A demographic boom that brought a million or more new workers into the sputtering Mexican economy each of the past ten years;
• The continued flight of Mexicans from rural areas to cities in Mexico and the United States; and
• A unique history of migration and strong migration networks that bind the two countries.

"Free trade agreements neither cause nor solve migration problems - people will continue to capitalize on the economic promise of migration whether or not their government approves," Papademetriou says. "The strength of these trade agreements is that they set the stage for cooperation on migration and other deeply divisive issues down the road."

Labor mobility and illegal immigration will continue to be politically charged topics as negotiations continue on regional pacts such as the Central American Free Trade Agreement just reached by President Bush but facing severe criticism from some members of Congress. The report concludes that NAFTA has demonstrated that the movement of goods and capital cannot substitute for the movement of people. Simply put, free trade agreements lay important groundwork for, but can never replace, effective migration management.

"The Shifting Expectations of Free Trade and Migration" by Demetrios Papademetriou is one of the three chapters in NAFTA's Promise and Reality: Lessons from Mexico for the Hemisphere. The project was directed by John Audley, senior associate and director of the Carnegie Endowment for International Peace's Trade, Equity and Development Project. He also wrote the report's introduction. Other chapters include "Jobs, Wages and Household Income," by Sandra Polaski, a senior associate with the Carnegie Project, and "The Greenest Trade Agreement Ever? Measuring the Environmental Impacts of Agricultural Liberalization" by Scott Vaughan, director of the Unit for Sustainable Development and Environment at the Organization of American States.

Copies of the full report are available through the Carnegie Endowment for International Peace at: www.ceip.org/NAFTA.