Word: mexicanization
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...cheaper peso means that wages will be even cheaper in Mexico, making it profitable for more companies to begin producing materials there. In turn, the devaluation of the peso means that Mexican companies will be able to be more competitive on the world market, thus taking away some of our share of manufacturing...
Oddly, the peso's devaluation actually accents the emptiness of Perot's dire warnings. The "giant sucking sound" was supposed to come largely from an unequal trade flow. Dollars, chasing cheap Mexican goods, would head south faster than pesos headed north, and jobs would follow the prevailing current...
...huge peso-protecting cushion that critics envisioned. It's true, as Perot will gladly remind you, that he actually predicted a post-NAFTA peso devaluation. But not this kind of devaluation. In his scenario, a secretly planned devaluation would be triumphantly unveiled -- a wily Latino ploy that by cheapening Mexican goods, would amplify the sucking sound. Reality proved less rife with intrigue than Perot's imagination. Mexico's leaders actually fought devaluation long and hard but were overwhelmed by the skittishness of foreign investors, including their worries about Mexican political turmoil...
...true that farmers there will suffer as protective trade barriers fall. But a deeper source of their discontent is sheer, longstanding poverty. And it's no coincidence that Chiapas, Mexico's poorest region, is also farthest from the U.S. and the balming effect of trade. The unrest of Mexican peasants is undeniably a reminder that free trade's overall benefits entail real costs, but it's equally a reminder that the alternative is worse. In a thoroughly protectionist world, all of Mexico might today look rather like a giant Chiapas...
...second virtue of buying Mexican goods was also driven home with jarring force last year. Enriching our neighbors is surely a more civilized way of staunching illegal immigration than California's Proposition 187, which in its harshness made even a few supporters squeamish. The case for NAFTA has always focused on the long term: that freer trade would slowly boost prosperity on both sides of the border, notwithstanding acute growing pains; and that by making Mexicans less threatening neighbors, it would eventually mute the raw nativism that is surfacing in California and elsewhere. That case looks at least as strong...