MEXICO CITY (AP) — Looking around a Mexico dotted byStarbucks, Wal-Mart and Krispy Kreme outlets,
it’s hard to remember thecountry before the North American Free Trade Agreement, which hasdramatically
expanded consumer choice and trade since it took effect 20years ago on Jan. 1.While it changed the country
in somefundamental ways, the treaty never met many of its sweeping promises toclose Mexico’s wage gap with
the United States, boost job growth, fightpoverty and protect the environment. Mexico’s weak unions
andcompetition from Asia and Central America kept wages down; thetightening of security along the U.S.
border closed off Mexico’simmigration "escape valve," and environmental provisions in theagreement
proved less powerful than those protecting investors.Mexicotook advantage of the accord with the United
States and Canada in someareas. The auto, electronics and agriculture sectors grew, and foreignbanks moved
in, increasing access to credit, but a majority of Mexicanssaw little benefit in income. While there is
undoubtedly a larger middleclass today, Mexico is the only major Latin American country wherepoverty also
has grown in recent years.According the EconomicCommission for Latin America, poverty fell from 48.4 percent
in 1990 to27.9 percent in 2013 for all of Latin America. In Mexico, where it stoodat 52.4 percent in 1994,
the poverty rate dropped to as low as 42.7percent in 2006; but by 2012, it had risen again to 51.3
percent."About30 or 40 percent of what they promised (in the trade pact) never camethrough," said
Rodolfo Hurtado Corona, 65, a chauffeur waiting for hisboss on a Mexico City street. Still, motioning to the
gleaming sportutility vehicle he drives for his boss, he noted that "before, therewere only a couple of
brands, now you can choose among many."EconomistAlfredo Coutino, director for Latin America at Moody’s
Analytics, says"the benefits arrived, but perhaps not of the magnitude that had beenhoped for."He
notes that "if this agreement had not been signed,Mexico would have been in a much worse situation than
it has been overthe last 20 years."Before NAFTA, Mexico was a closed,state-dominated economy reeling
from debt and the underlying problems ofMexican farms — low productivity on small plots. That had set up
aperfect storm of mass unemployment.The trade accord, globalization and foreign investment did help create
jobs, albeit low-paid ones.Atsupermarkets, shoppers are now familiar with everything fromcranberries to chai
and lemons (as opposed to the Mexican lime) that fewhad tasted before the treaty tore down trade barriers
and tariffsbetween Mexico, Canada and the United States.Consumer goods andclothing that were trendy among
Mexico’s wealthy are now available toeveryone, with more products and choice, especially among
electronicsappliances and cars.Coutino recalls that "before, in Mexico, itwas a question of social
status to have a pair of imported sneakers,they were very expensive … now the majority of Mexicans can
have thesethings that were once considered luxuries."Mexicans remainambivalent: A recent Universal
newspaper/Buendia-Laredo poll showed thatwhile about half would approve the trade pact if it was proposed
againtoday, about 34 percent would reject it. The rest had no opinion. Themargin of error was 3.5
percent.There is no turning back. Thethree North American countries are pushing to become even
moreeconomically integrated. With Mexico’s newly passed energy reformallowing private investment in the
county’s oil sector, they aim to makethe continent energy independent as well.NAFTA is almostforgotten in
the latest controversial free-trade effort, theTrans-Pacific Partnership, a negotiation among 12 countries,
includingNAFTA’s three, to open trade between Asia and the Americas.Opposition to the TPP is reminiscent of
the dire predictions when NAFTA was being negotiated in the early 1990s.Atthe time, NAFTA opponents
predicted millions of U.S. jobs would movesouth, and labor and farm groups forecast a mass exodus from the
Mexicancountryside. But as a 2010 Congressional Research Service report said,"Most studies after NAFTA
have found that the effects on the Mexicaneconomy tended to be modest at most."On the plus side,
tradebetween the three countries vastly increased, to about 3.5 times the1994 levels, though U.S. trade with
China and other Asian nations hasgrown even faster in the last two decades.More foreign automakers haveset
up plants in Mexico, which now produces about 3 million vehiclesper year.Mexico has increased auto-sector
jobs by around 50 percentsince 1994.But Mexico’s auto jobs are notoriously low-paying, andlittle progress
has been made in closing the wage gap with the U.S.Average manufacturing industry wages in Mexico were about
15 percent ofU.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.TheNorth American Development Bank, part of the side agreements to theaccord, has spent over $1.33
billion to finance border projects fordrinking water, waste water and sewage treatment. But untreated
sewagecontinues to flow and air quality remains low in many bordercommunities.U.S. exports of spent
lead-acid car batteries toMexico spiked 500 percent between 2004 and 2011. Authorities are onlynow beginning
to consider certification requirements for companies thatexport batteries for processing to recover the
lead.NAFTA hasdone a very good job of protecting foreign investors, however. The tradepact set up binding
arbitration panels, where investors can bypass thecourts with complaints that government regulation unfairly
affects theirbusinesses.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 notfair
and open," said Scott Sinclair of the Canadian Centre for PolicyAlternatives.The U.S. government is
pushing to include the samesystem in the TPP. And agricultural openings, as in NAFTA, are
provingcontroversial; in developing countries, farms are culturally sensitive,big employers and often are
the first to suffer in trade pacts."Theyhave left us at a disadvantage," said Josefina Rosas, a
corn farmer whois trying to introduce better farming techniques to lower the use ofcostly fertilizers and
store-bought hybrid seeds in the Pacific coasttown of Azoyu, Guerrero. Still, with all her efforts small
farmers oftendon’t make back the costs of planting. "We don’t have the conditions tocompete,"
Rosas says.Copyright 2013 The Associated Press. All rightsreserved. This material may not be published,
broadcast, rewritten orredistributed.