While Mao Zedong was the father of the Communist China, his successor Deng Xiaoping must be credited for the nation’s progress toward prosperity. Under his leadership, the party ratified and implemented the “Four Modernizations” program that would propel China onto the global stage, where it is fast approaching the leadership position. This ambitious program of sweeping economic reforms, which were based on free-trade policies, opened China to the outside world. But the last decade has seen deterioration in such optimism, as “the very limited agricultural resource base and lack of basic rural infrastructure, coupled with a deplorable health status and level of educational attainment, not only constrain the effectiveness of government poverty reduction programs in these areas, but also severely hamper single-sector agriculture and rural enterprise development interventions.” (Herd & Dougherty, 2007)
While free trade has led to development in some countries, they have led to economic instability in others. What is most worrisome about free trade in the modern world is the vacuous nature of the term, as it is stripped of its substantive meaning. In other words, where there is conflict between the execution of this system in its ideal form and the consequences for major business corporations, it is always the interests of the latter that is looked after. This is nowhere more clearly visible than in the history of NAFTA (North American Free-Trade Agreement). The terminology can be a little deceptive here, for despite claims of being a ‘free-trade’ agreement, it has many protectionist provisions in it. A brief survey of the effects of NAFTA on the general population reveals that American, Mexican and Canadian elites have seen most of its benefits. Despite initial promise of creating more jobs for Americans, under the NAFTA regime many industries were moved to Mexico, due to cheaper labor there. (Ciccantell, 2001, p.57) The key long term goal for the U.S is not so much the establishment of free-trade practices in the neighborhood as it is to reconstruct its hegemony that was formerly seized by Japan and Europe. To put things in perspective,
“The declining competitiveness of U.S. raw materials supply systems badly damaged U.S. hegemony during the 1970s and l980s. The original U.S. strategy was to create a continental energy market to reduce overseas oil imports, guarantee access to oil and natural gas from Canada and Mexico, and reduce price instability. The evolution into broader agreements reflected the interests of other U.S. industries and the efforts of Canadian and Mexican states and firms to capture benefits from restructuring.” (Ciccantell, 2001, p.57)
In the last two decades, the manufacturing sector in the United States has virtually collapsed, leaving tens of thousands of workers unemployed. Similarly, the effects of NAFTA can be partially attributed to the problem of illegal immigration from Mexico to the United States. A salient question at this point is whether such a steep social/national cost worth bearing for the sake of American hegemony? Moreover, as the history of NAFTA succinctly illustrates, the manifestation of U.S hegemony need not have a purpose beyond that of domination and self-interest. Whether it aids or hinders free trade agreements can be incidental to the cause. (Worth & Kuhling, 2004, p.31)