It turns out the Federal Reserve took an active role in pushing for NAFTA which included denying Congress information about the instability of Mexican currency, information that could have sunk the deal.
Anatomy of an economic debacle: How the Fed proposed bailing out Mexico to pass NAFTA – Salon.com
The Federal Reserve is supposedly an independent central bank, that we’re told is above politics. By this telling, it is supposed to be staffed with ramrod straight central bankers, tight-fisted but apolitical. While the Fed can state its opinions on policy matters when asked by Congress, it isn’t supposed to use its power to manipulate the political system. And it isn’t supposed to propose bailing out a foreign country just to get the United States Congress to change policy.
But in 1993, that is exactly what the Federal Reserve did.
On Sept. 28, 1993, Jon LaWare, a member of the Federal Reserve Board of Governors, testified before the House Banking Committee in support of the North American Free Trade Agreement, or NAFTA. “I want to make clear that the Federal Reserve supports NAFTA without qualification,” he said, discussing throughout the hearing how NAFTA would help American banks penetrate the Mexican financial system. LaWare, like other regulators testifying at that hearing (including Mary Schapiro, then-head of the SEC before returning to the job under Obama), was pressing the agreement aggressively. The Federal Reserve has, broadly, two reasons to press trade agreements. One, the Fed wants lower labor costs, which reduces inflation. Shipping jobs abroad makes the Fed’s job easier. And two, U.S. banks, which are the regulatory customers of the Fed, wanted to get their hands on the Mexican banking system (which they eventually did).
via Anatomy of an economic debacle: How the Fed proposed bailing out Mexico to pass NAFTA – Salon.com.
From around the web.
From the web site, Systemic Disorder
A frequent criticism of “free trade” agreements is that corporations are elevated to the level of a country. It might be more accurate to say that corporations are elevated above countries.
The muscle in trade agreements like the North American Free Trade Agreement or the proposed Trans-Pacific Partnership is the mandatory use of “investor-state dispute mechanisms.” That bland-sounding bureaucratic phrase is anything but bland in its application — these “mechanisms” are the tools used to turn corporate wish lists into undemocratic reality.
The concrete form of these “mechanisms” are corporate-dominated secret tribunals that hand down one-sided decisions with no oversight, no public notice and no appeals. This is so is because governments that sign trade agreements legally bind themselves to mandatory arbitration in these secret tribunals despite (or because of) their one-sided nature. It is a virtually certainty that, should be they passed into law, the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) will contain some of the most draconian language yet in this area.
You must be logged in to post a comment.