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NAFTA and the Narcos: What You Won't Hear at Obama's Meeting in Mexico

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When Barack Obama meets his Mexican and Canadian counterparts in Toluca, Mexico on February 19, you can expect to hear all three insist that the now 20-year-old North America Free Trade Agreement has been an economic success.

The facts tell a different story: lost American jobs and lower wages, a chronic U.S. trade deficit with Mexico and Canada, and the millions of desperate immigrants driven across our southern border by NAFTA's destruction of small business and agriculture in Mexico. By now the evidence is clear that NAFTA's benefits went to the rich and powerful in each country while ordinary people paid the costs.

And here's another part of the history of NAFTA you won't hear anything about: its role in unleashing the drug wars that have killed an estimated 80,000 Mexicans in the last six years and plunged large sections of their country into lawless violence.

Mexico has long been a supplier of marijuana to the U.S. market. But in the days before NAFTA, the Mexican government had an informal deal with the illegal drug monopoly: "Sell what you want to the Americans. But keep our country clean of drugs and violence." The system was cynical, but it worked, producing export earnings for the Mexican economy and maintaining public safety.

With NAFTA, the volume of trade across the border swelled, and pressure from business to move goods quickly made it impossible for U.S. Customs officials to make thorough inspections for contraband. As a result, it became much easier and cheaper to move cocaine from Columbia, that had previously been delivered by sea, overland through Mexico.

Given their strategic location, the Mexican drug lords gradually took control of the major South American routes into the U.S. market, estimated to be worth at least $15 billion and perhaps as much as $50 billion. This kind of money drew new competitors into the business, a process encouraged by Mexican political leaders whose connections to the narco-traffickers were ignored by the administrations of George Bush I and Bill Clinton in their eagerness to deliver NAFTA to their corporate backers.

As the competition intensified, rival cartels hired ex-policemen and ex-soldiers -- many trained to kill by the U.S. military -- to do their dirty work. In a grim parody of free trade, dollar profits from drugs were used to buy assault weapons, grenade launchers and other sophisticated weapons from unregulated U.S. arms sellers. Violence spread and became more brutal, involving torture, mass execution and the public display of horribly mutilated bodies.

Meanwhile, the sanctions against selling illegal drugs within Mexico crumbled. The rapidly growing volume of cocaine traffic from South America through Mexico made it harder to launder drug money as it changed hands across borders. Columbian suppliers began paying their Mexican trans-shippers in kind -- i.e. in cocaine. The Mexicans in turn used the cocaine to pay their own employees, who, in order to get cash, sold it on the street. And like any expanding industry, the Mexican cartels gradually diversified their product line -- in this case, to include heroin and methamphetamines, which are also used to make payroll.

In the mid-2000s the hired assassins began to organize their own gangs. Where the older cartels were primarily interested in the business of selling drugs, these new criminal organizations spread out into robbery, kidnapping, extortion, and intimidation by murder. Victims were no longer rival gang members or bystanders injured by accident. They were farmers, businesspeople, and their customers and employees. They were politicians and policemen who wouldn't be bought. They were journalists who dared to report on narco infiltration of government at every level.

Mexico is not yet a failed state; parts of the country
remain reasonably safe. But the mayhem is spreading and the government has been unable to stop it. Many in the police, the judiciary and even the military are intimidated, inadequately trained, and/or corrupt. The influence of drug money within all three major political parties is now taken for granted.

In some areas, whole cities and towns are under the de facto control of criminal organizations. In the last month there have been pitched gun battles in the state of Michoacán among drug traffickers, mafia-style gangs, the military, and civilian vigilante groups -- some of whom themselves may be allied with various criminal factions. "It is," wrote a Mexican columnist, "the worst kind of civil war."

The U.S. government has steadily drawn itself into the conflict, supplying the Mexican military with training, intelligence and equipment -- some of which inevitably finds its way into the narcos' hands. At least two American government agents have been murdered, and in one case a Mexican judge released the convicted killer from prison on a technicality. In January, a major Mexican newspaper published evidence that for the last decade, the U.S. Drug Enforcement Administration has been protecting the largest Mexican drug cartel in exchange for information on its competitors.

Meanwhile, the U.S. crackdown on illegal immigration -- border fences, mass deportations -- has left the Mexican elite without the safety valve of exporting the country's unemployment. This is swelling the population of ambitious, unemployed and disaffected young people, who in turn are potential recruits for the gangs.

Given the 2000-mile frontier with Mexico it was only a matter of time before the Mexican cartels expanded their retail reach into the U.S. In 2009 the U.S. Justice Department estimated that the cartels had infiltrated some 200 American cities. As one DEA official in Chicago told the Washington Post, "We have to operate now as if we're on the Mexican border."

But do not expect any of this to be discussed publicly at next week's gathering of continental leaders. Acknowledging the connection between NAFTA and the narco wars would make it harder for Barack Obama and the corporate lobbyists to promote new trade agreements like the proposed Trans Pacific Partnership that would expand NAFTA to another nine countries around the Pacific Rim.

The president will, of course, be well protected when he goes to Mexico. For others, safety is more problematic. In early January, the State Department issued a travel warning that 15 of the country's 31 states are too dangerous for ordinary Americans to visit.