Rescaling and reforming the state under NAFTA: implications for subnational authority


The new free trade agreements are rescaling governance in ways that have critical implications for subnational governments. The nation state is not simply being hollowed out; rather, a new governance nexus is forming — of nation states, multinational corporations and international agreements — which explicitly excludes subnational and local government voice. This article describes the new governance features of the North American Free Trade Agreement (NAFTA) and illustrates how they work out at the national, subnational and local scales using cases from the United States and Mexico. NAFTA provides the template for other free trade agreements including the Free Trade Area of the Americas (FTAA) and a growing number of bilateral agreements. We show how NAFTA’s governance structure is undermining subnational and local government authority in legislative and judicial arenas. Designed to advance privatization of public services, these agreements undermine the very ability of local governments to use markets for public goods by defining traditional state and local governance mechanisms as ‘non‐tariff barriers to trade’. Contradictions between private profit and public interest appear at the subnational level but their resolution is engaged at the global level between private investors and the nation state. Recognition of this rescaling requires attention to the reforming state and its implications for subnational authority and democratic representation and voice.