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La Economia de Latinoamérica
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The Effects of the United States Fruit Company and NAFTA on the Economy of Latin America

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The United Fruit Company and NAFTA (North American Free Trade Agreement) have played key roles in the development of Latin America.  Due to the growth of the banana crops, it has helped to bring about more stability.  The United Fruit Company, however, has brought more opportunities to Latin America than the original idea that was thought of.  NAFTA has brought about better methods of trade within North and South America. 

 

The United Fruit Company first started in 1873 when Minor C. Keith started planting banana crops along the first train route in Costa Rica.  It wasn't until 1890 that the banana crops became very valuable.  This was the first time that the crops were transported by train to be shipped to the United States, and the first sets of banana crops were traded.  Finally, by 1899, Lorenzo Baker bought the banana corporation and named it United Fruit Company after Keith's corporation, Boston Fruit, went bankrupt.  At this time, the corporation moved to the West Indies and grew even more in Central America.  By 1930, the United Fruit Company became the largest employer in Central America.  In 1970, United Fruit became United Brands Company.  Finally by 1984, Carl Lindner took control of the company which became Chiquita Brands International.

 

The North American Free Trade Agreement (NAFTA) is a trade commerce regulated by the United States.  It is made up of the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).  This trade is comprised of Canada, Mexico, and the United States, of course.  NAFTA was first started January 1, 1994 due to eliminating tariffs on products traded within these areas, and hopefully, in turn, get rid of tariffs within 15 years.  Many restrictions were deleted in order to make the trade safe and controlled for the good of the workers and companies.  NAFTA is an agreement similar to the Free Trade Agreement of 1988. 

 

In accordance to NAFTA, the NAAEC helps to make sure environmental issues of that country are put in place to ensure the best interest of the workers, employers, and all people.  The main issue of importance is pollution, whether it is in the water or in the air, which harms everyone in every way.  With the NAAEC, the NAALC is in act in order to ensure fair work and trade among the workers without any unfair and unjust conditions to work in.  This is a harder battle than the NAAEC, but methods are put in place in order to try and help the workers.

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Mexico was not very open before 1985.  They had not dealt with any trade or any real connection with other countries in Latin America.  Trade did not begin until 1985 with the idea of government to look into the expansion, like Chile, although with more opportunity.  Chile dealt with problems and did not have a good image on their trade.  Mexico was the first to have growth and opportunity come from trade.  The start of letting trade began.  There was very tight control originally, but once new government took over the primitive government originally in place.   

 

In 1982, Mexico's economy was not very well off.  They were in the middle of economic crisis and needed something to open the door to help get their economy more stable.  At first, the trade went down, but they traded outside Mexico until the economy and traded within the country.  Petroleum was the valuable product at the time, which caused trade to decline for a bit.  However, with time, the economy recovered and free trade was allowed and helped the economy.  But it wasn't until NAFTA and the United Fruit Company came that really put a boost in Mexico and the Latin American culture. 

 

Due to the many benefits put in place with these new capabilities and trade routes, there were still some downfalls to the workers and country in trying to sustain the crop.  Many workers became very ill since the crop was relied on so much more heavily.  All the laborious work was not a help to the flu and malaria workers came across with the chemicals in the pesticides and any other substances.  But most of all, the paid wages and labor for the job never added up to enough for the workers to fully live off of.

 

Although there were the pitfalls of the trade route being promoted and started in Latin America, the many benefits that came out of it were far too many to think this was not helpful.  While in Central America, the United Fruit Company built many railroads, schools, and a lot of land for new farmers to come in and begin the process in the trade industry.  Many opportunities for growth in employment and education arose that anyone could begin a new life essentially to be productive, and an active member in the trade industry.

 

With the political scene in Central America, there were all opinions both in favor and against the idea of a trade monopoly.  As a result of the opponents to the idea, there was a massacre at Santa Marta in Colombia that started on November 12, 1928.  By December 6, there were at least 47 people killed.  This massacre was a strike that had gone badly.  The government and military claimed it was of Communist revolutionaries that opposed it.  As a result, the revolutionaries took over and the conservatives no longer rule political office in Colombia.

 

Since Mexico has had NAFTA implemented in the country, there have been many positive outcomes, which include that poverty has fallen, and income has gone up.  The trade has increased very high that it is one of the fastest growing countries among the countries in NAFTA.  Statistics show a 129.3% increase in trade with the United States and members of NAFTA, which greatly show the growth of Mexico at 100.9%.  This greatly shows the improvement of Mexican society within a ten year span after which NAFTA was put into effect.

 

Mexican Industry has had a dramatic improvement as well.  Whether it is raw material, clothing, or goods, they are making the trade industry flourish with many good outcomes.  Within the manufacturing industry, statistics show that income for Mexico shows a 15.5% increase since NAFTA began.  Since trade is the free trade, Mexico is able to gain more money from trade because trade is being distributed throughout North America and Canada, as well as in the other countries in Latin America.  Surprisingly, Mexico’s automobile industry is very strong and brings in almost a quarter of the income that any other industry does within the help of NAFTA.        

  

Many studies have been done on the effects of NAFTA and the United Fruit Company and have shown both sides of the story.  The recent studies show that the impact of the employment has gone down.  Too many people work too hard with the labor controlling many of their lives that they can’t get any good health care, which in turn, causes the opportunity for jobs to go down and using more of your labor workers than needed because too many people get sick.  However, with the productions costing more to trade, this puts more problems and energy on the farmers that, studies say, without NAFTA would help the farmers to work at an easier pace.

 

NAFTA and the United Fruit Company have helped, and in some ways, put some negative effects on Latin America.  However, the economy has risen and helped bring them to modern times.  Prior to NAFTA and the United Fruit Company, Mexico was in an economic crisis, and they have put so much money into the economy to be an active member in trade to have stability.  They have put some good measures in place to help them.     

 

Links:

Banana Republic: The United Fruit Company

http://www.mayaparadise.com/ufc1e.htm

 

Explaining free trade: Mexico, 1985-1988 by Patrick Cronin

http://findarticles.com/p/articles/mi_qa4000/is_200301/ai_n9232129

 

North American Free Trade Agreement.  Wikipedia

http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement

 

United Fruit Company. Wikipedia

http://en.wikipedia.org/wiki/United_Fruit_Company