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Neoliberalism and Globalization

International Treaties and Organizations

Project: Neoliberalism and Globalization
Open-Content project managed by AJB, mtuck

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This project will attempt to document the causes and effects of the neoliberal form of capitalism and its influence throughout the globe.

The International Monetary Fund approves of a $3.9 billion to the Mexican government. As a condition for receiving the loan, the Mexican government is expected to engage in a series of free market reforms. Such reforms include: fiscal austerity, privatization of state-owned companies, reductions in trade barriers, industrial deregulation, and foreign investment liberalization. [New York Times, 12/24/1982, pp. D4; Global Exchange, 9/2001, pp. 3 pdf file]

Entity Tags: International Monetary Fund, Mexico

Category Tags: IMF, Mexico

The IMF’s recommended reforms are widely viewed to have a negative effect on the earnings of the average Mexican. For example:
bullet In the period between 1983 and 1988, per capita income falls at a rate of about 5 percent per year.
bullet In the same period, the value of workers’ real wages falls from 40 to 50 percent.
bullet The share of national income received by workers declines from 49 percent in 1981 to 29 percent in 1990.
bullet Adjusted for inflation, the Mexicans’ real wages fall by 75 percent throughout the 1980s. [Global Exchange, 9/2001, pp. 4 pdf file; Harvey, 2005, pp. 100]

Entity Tags: Mexico, International Monetary Fund

Category Tags: IMF, Mexico, Statistics

Financial sources inform media outlets that the Mexican government’s failure to cut its budget deficit in accordance with an IMF austerity program may jeopardize its access to $908 million worth of assistance. This news comes at about the same time as an earthquake hits Mexico that will require the government to spend even more on reconstruction, thereby increasing the deficit. The IMF says that it will not make any exception as a result of Mexico’s fiscal needs following the earthquake. [New York Times, 9/20/1985, pp. A6]

Entity Tags: Mexico, International Monetary Fund

Category Tags: IMF, Mexico

The IMF grants Haiti a $24.6 million loan under its Structural Adjustment Facility (SAF). As a condition, Haiti is expected to cut public spending, close “inefficient public enterprises”, and liberalize its trade policy. [Inter Press Service, 12/30/1986]

Entity Tags: International Monetary Fund

Category Tags: Haiti, IMF

1990: Mexico Privatizes Phone Company

The Mexican government, with technical assistance from the World Bank, sells off a profitable phone company called Telmex. In the months preceding the sell-off, the Mexican government increases the rate of calls by local users from 16 pesos per minute to 115 pesos per minute in order to make the company more attractive to potential buyers. This makes the privatization of the phone system detrimental to consumers. In a 1992 report, The World Bank will admit that “the privatization of Telmex, along with its attendant pricetax regulatory regime, has the result of ‘taxing’ consumers—a rather diffuse, unorganized group—and then distributing the gains among more well-defined groups, shareholders, employees, and the government.” [Global Exchange, 9/2001, pp. 4 pdf file]

Entity Tags: World Bank, Telmex

Category Tags: World Bank, Mexico

In preparation for the North American Free Trade Agreement (NAFTA), Mexico opens up its financial services to foreign ownership. By 2000, 85 percent of the banking system will be owned by foreign entities and lending to Mexican businesses will have dropped from 10 percent of the GDP to 0.3 percent. [Jones, 3/2007, pp. 3]

Entity Tags: Mexico

Category Tags: NAFTA, Mexico, Statistics

The North American Free Trade Agreement Implementation Act (H.R. 3450) is voted on by the US House of Representatives and passes 234-200. [US Congress, 11/17/1993] It is later estimated that Congresspersons who voted in favor of H.R. 3450 received an average of $8,018 more in corporate PAC contributions than those who voted against. [Francia, 1/2001, pp. 98, 103]

Entity Tags: North American Free Trade Agreement, US Congress

Category Tags: NAFTA, Statistics

US President Bill Clinton signs the North American Free Trade Agreement (NAFTA), which he says will “tear down trade barriers between” the US, Canada, and Mexico. [US President, 12/8/1993]

Entity Tags: William Jefferson (“Bill”) Clinton, North American Free Trade Agreement

Category Tags: NAFTA

In early 1994, investors pull money out of the Mexican economy in response to an increase in US interest rates and political instability. This causes the Mexican government to lose massive amounts of reserves and lead it to allow the peso to float in December of 1994. In January of 1995 it again asks the IMF for assistance and receives packages from both the IMF and US Treasury. This time, massive privatizations of “transportation, banking and finance, railways and the petrochemical industries” were recommended as a way of paying off the loans. A devaluation of the peso in 1995 along with an IMF-mandated rise in interest rates triggers the worst depression in Mexico in 60 years. GDP falls by 6.2 percent, wages fall by 25 percent, unemployment doubles, and 12,000 Mexican firms file for bankruptcy. [Global Exchange, 9/2001, pp. 4-5 pdf file; Hart-Landsberg, 12/2002]

Entity Tags: US Department of the Treasury, Mexico

Category Tags: IMF, Mexico, Statistics

A 15-year period begins during which most trade barriers between the US, Canada, and Mexico will be dismantled in accordance with NAFTA. The New York Times comments: “The government has taken few steps, however, to prepare smaller and medium-sized companies, poor farmers, and inefficient industries for the new competition. Even after a wave of industrial restructuring that cost half a million Mexican jobs, worker re-training programs are almost nonexistent.” [New York Times, 1/1/1994]

Entity Tags: North American Free Trade Agreement

Category Tags: NAFTA, Mexico

Under NAFTA, Mexico reduces its protection of domestic corn growers. This leads to a massive influx of corn from the US, where its production is heavily subsidized. This has the effect of reducing the price of corn in Mexico by 70 percent and ruining the livelihoods of some 15 million Mexican farmers who depend on the crop for income. [Fanjul and Fraser, 8/2003, pp. 23 pdf file]

Entity Tags: North American Free Trade Agreement

Category Tags: NAFTA, Mexico, Statistics

Within 24 hours of the US Democratic Party receiving a $500,000 “donation” from Chiquita Brands International, the Clinton administration files a complaint with the WTO complaining about the EU’s banana trade policy with the Caribbean. [Guardian, 3/5/1999; Alternet, 2/6/2001] The US is opposed to the European Union’s quota system for Caribbean bananas which provides Europe’s former island colonies with a guaranteed market. The purpose of the quota system is to protect Caribbean growers from their regional competitors. Banana exporters in Central and South America tend to have lower production costs since they have large-scale, mechanized plantations that are often run by giant US-based corporations. The EU rule was aimed at enabling the countries’ economies to grow independently, without dependence on overseas aid. The EU, with 74 percent of its citizens willing to pay more for “fair trade” bananas, stands firm against the US challenge, making only a few small changes and leaving its quota intact. The US responds with punitive tariffs against the EU, forcing the EU to rescind its tariffs. [Oxfam, 3/1998; Guardian, 3/5/1999; Alternet, 2/6/2001]

Entity Tags: Democratic National Committee, Clinton administration, Chiquita Brands International

Category Tags: WTO

Around 100,000 farm workers march to the main square of Mexico City to protest the removal of duties on farm imports that occurred just weeks earlier (see January 1, 1994). They demand that the government renegotiate NAFTA to better protect Mexican agricultural producers. [Houston Chronicle, 2/1/2003; Fanjul and Fraser, 8/2003, pp. 23 pdf file]

Entity Tags: North American Free Trade Agreement

Category Tags: NAFTA, Mexico, Uprisings

The Mexican government, after weeks of negotiation with protesting farmers (see January 30, 2003), signs the National Rural Accord (also known as the National Agreement for the Countryside and the Development of Rural Society). The accord announces that the government will make “sweeping changes to rural infrastructure and state farm policy to modernize Mexico’s outdated agricultural system.” As part of the agreement, Mexico will also ask the US and Canada to allow for protection of Mexico’s rural economy, and review the possibility of implementing mechanisms against dumping and unfair competition. [Reuters, 4/28/2003; Fanjul and Fraser, 8/2003, pp. 23 pdf file]

Entity Tags: North American Free Trade Agreement

Category Tags: NAFTA, Mexico

Senator Norm Coleman, chairman of the Foreign Relations Western Hemisphere subcommittee, holds a hearing in which he says that a “tough response” against Mexico would be “warranted” for “unilateral renegotiation of NAFTA.” Present at the hearing are Bush administration officials and leaders of agribusiness interest groups. Jim Quackenbush, board member of the National Pork Producers Council, complains of a Mexican anti-dumping case against US hog exports and claims his goods are often halted at the border for “alleged sanitary concerns.” He calls for the US to “use all available means” to keep Mexico’s market open to US agricultural goods. Allen Johnson, chief agriculture negotiator in the office of the US Trade Representative, says that the US will work to defend its interests and is ready to retaliate if Mexico does not accede to its demands. [US Congress, 5/20/2003 pdf file; Star Tribune, 5/21/2003]

Entity Tags: North American Free Trade Agreement, Senate Foreign Relations Committee

Category Tags: NAFTA

A report by the Carnegie Endowment for International Peace finds that the positive aspects of NAFTA just barely compensate for its negative effects. Among its findings:
bullet The net jobs gain in Mexico has been surprisingly small. In fact, 30 percent of all jobs that have been created in the maquiladora sector (export assembly plants) have been lost as company operations have since moved to lower wage countries such as China.
bullet Despite growth in productivity, real wages in Mexico are lower than they were when NAFTA first took effect. Although this can partially be attributed to the Peso Crisis of 1994-1995. It is also noted that wages in Mexico are “diverging from, rather than converging with, US wages.”
bullet Income disparity has grown drastically, with the top 10 percent of households having increased its share of the national income while the remaining 90 percent has lost its share or has seen no change at all. [Papademetriou et al., 8/2003]

Entity Tags: North American Free Trade Agreement, Carnegie Endowment for International Peace

Category Tags: NAFTA, Mexico, Statistics

The UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions is adopted at the 33rd UNESCO General Conference held in Paris, France. It is the first major international convention to be adopted that reaffirms the sovereign right of states to formulate and implement cultural policies. The convention’s approval is seen as a challenge to the legitimacy of the global regime of bilateral, regional and multilateral free trade agreements revolving around the World Trade Organization (WTO), in particular regarding international trade in cultural goods and services and the related cultural policies effected by governments. The approval of this international instrument is seen as a major culmination of years-long efforts led by Canada and the European Union, specifically France, to arrest liberalization commitments in various free trade agreements that tend to strengthen Hollywood’s overwhelming advantage in the global film, music, publishing, advertising, and other cultural industries. The convention is overwhelmingly approved despite a strong counter-lobby by the United States. A hundred and forty-eight vote in the convention’s favor, four countries (Australia, Honduras, Liberia, and Nicaragua) abstain, and only two countries—the United States and Israel—vote against its approval. [Coalition Currents, 10/2005]

Entity Tags: World Trade Organization, UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, United Nations Educational, Scientific and Cultural Organization

Category Tags: US, WTO

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