Digging into Past Policies to Prepare for the Free Trade Future

Markets, Marketing, Trade, Policy, Sustainability, Sustainable Devt.

Digging into Past Policies to Prepare for the Free Trade Future

McComb, Jessie F.


The structural-change policies adopted in recent years as part of the trend towards globalization have accelerated the liberalization of world trade through the creation of trade zones, free-trade agreements and common markets. This has had strong effects on national economies, the agents involved in such economies and international trade flows…
From UNIFEM’s report “NAFTA’s Impact on the Female Work Force in Mexico”

As an employee of a donor funded organization, the sway that funders hold over organizations often seems daunting. Non-profits without clear goals and objectives, and a strategy to obtain those goals, risk getting caught up in the funding game where priorities are deferred to dollars. Even organizations that have defined ideas of their future must put aside those goals due to a lack of funding in a certain geographic region, sector or timeframe.

This was recently brought to my attention after the current US administration announced an integration of the goals and objectives of the State Department and the United States Agency for International Development (USAID). These two departments, especially USAID, are key players in the development field and have much influence on how, where and when American development organizations work. The alliance of the State Department’s foreign policy and USAID’s resource allocation, highlighted, for me, the way which government policies can affect every facet of a nation’s economy.

Now, this point may seem obvious but it started me on a path to uncover how policies outside of direct development objectives impact artisans and crafts around the globe. From trade agreements made in regional alliances to transitional, post-communist nations struggling to create pro-small business laws, policy plays a major role in the formal and informal crafts sectors. Even trade agreements that may seem to immediately benefit artisans and workers in developing nations can ultimately be detrimental to their standard of living.

Take NAFTA for example. The North American Free Trade Agreement (NAFTA) was signed between Canada, the United States and Mexico in 1994. It opened up trade between all three countries with the idea that the agreement would create jobs in the least developed nation (i.e. Mexico). Initially some jobs were lost and then recovered with a small margin of growth in the number of jobs. However, as an UNIFEM report studying the impact of NAFTA on women workers in Mexico shows, “In the textile and apparel sector women were able to recover the positions they had lost in previous years, but that was fundamentally due to the sharp drop in wages.” The report also stated that due to the changing face of industry, many women workers moved to small companies or cooperatives where they received less stable work, no benefits and were more susceptible to exploitation.

As in Mexico’s case, women workers, often the bearers of craft and cultural traditions, are usually the hardest hit by globalization policies that aim to open up trade or by policies that put up barriers to creating small businesses. As the UNIFEM report points out, “Even in countries that are successfully taking part in the world economy, the benefits of economic growth are not being distributed fairly among the population…these include women working in agriculture and traditional industries, and had led, among other effects, to a substantial increase in informal activities and unemployment.”

An interesting point to emphasize though is that policies like NAFTA don’t just negatively impact developing nation and their women workers. The Crafts Report April 2006 issues published an article highlighting a different side of NAFTA. The article titled “Ingrid’s Woven Rugs: Old Techniques Still Roll Up Technology Driven Competitors”, profiled a small second generation workshop in rural Texas run by Reinhard Schoffthaler. The workshop makes custom woven rugs and blankets for locals and customers that pass by the shop on their way through Texas. Although the shop is still successful, when NAFTA was signed Schoffthaler was forced to lay off more than half of his employees and the business has never fully recovered. Schoffthaler is only one example of a small, US-based textile business that was hit by NAFTA.

All of these points may seem redundant, over played or just plain apparent, but trade liberalization doesn’t appear to be slowing down or stopping anytime soon. With this in mind it’s important for development workers, scholars and artisans to pause and take a historical look at what these agreements have done in the past so that we can be more prepared for the policies and agreements of the future. The poverty divide has widened in past decade and while some nations are able to negotiate access to global markets and trade expansion, many developing nations are finding it increasingly difficult to compete.

NAFTA’s Impact on the Female Work Force in Mexico, United Nations Development Fund for Women, Polanco, Mexico,
Crafts Report, April 2006 issue, pages 28-31

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