Lost Jobs and Migration: The Real Cost of the Peru Free Trade Agreement
By David Bacon
t r u t h o u t | Perspective
Friday 23 November 2007
Oakland, California - In the 2006 elections, aspiring Democrats attacked the Bush administration's free trade policies, and more than 20 new members of Congress were elected, giving the Democratic Party its new majority in the House of Representatives. Yet two weeks ago, Democratic Party leaders urged those same members of Congress to vote for a new free trade agreement with Peru.
Most rebelled, but enough Democrats voted for the Bush administration proposal, along with every Republican, to push it through the House. The Senate is expected to take up the agreement any day now.
Why would Democrats support the administration's trade policy, when campaigning against it helped them win in the last election? Try money.
Fourteen years ago, the promoters of the North American Free Trade Agreement promised that free trade would produce jobs. We hear the same claim today for the agreement with Peru, as well as the other agreements Bush has negotiated with Colombia, Panama and South Korea.
NAFTA certainly produced some winners. Large corporations moved high-paying jobs south of the US/Mexico border to cut their labor costs and increase their profits. Mexico created a new generation of billionaires. But rising profits did not produce jobs.
By November 2002, the US Department of Labor had certified 507,000 workers for extended unemployment benefits because their employers had moved their jobs south of the border. The Department of Labor stopped counting NAFTA job losses, but the Economic Policy Institute in Washington, DC, estimated that NAFTA had eliminated 879,000 jobs. That was five years ago.
But US job loss didn't produce job increases in Mexico - it eliminated them there too. In NAFTA's first year, more than a million jobs disappeared in the economic crisis NAFTA caused.
To attract investment in Mexico, the treaty required privatization of factories, railroads and other large enterprises, leading to more layoffs of Mexican workers.
On the border, Ford, General Electric and other corporations built factories and moved production from the United States to take advantage of low wages. But more than 400,000 maquiladora workers lost their jobs in 2000-2001 when US consumers cut back spending in the last recession, and companies found even lower wages in other countries, such as El Salvador or China.
Before NAFTA, US auto plants in Mexico had to buy parts from Mexican factories, which employed thousands of local workers. But NAFTA let the auto giants bring in cheaper parts from their own subsidiaries, so Mexican auto parts workers lost their jobs, too.
The profits of US grain companies, already subsidized under the US farm bill, went higher when NAFTA allowed them to dump cheap corn on the Mexican market, while at the same time it forced Mexico to cut its agricultural subsidies. As a result, small farmers in Oaxaca and Chiapas couldn't sell corn anymore at a price that would pay the cost of growing it.
When corn farmers couldn't farm, or auto parts and maquiladora workers were laid off, where did they go? They became migrants.
The real, dirty secret of trade agreements is displacement. During the years NAFTA has been in effect, more than six million people from Mexico have come to live in the United States. They didn't abandon their homes, families, farms and jobs willingly. They had no other option for survival.
Farmers and workers throughout Central America, who saw what NAFTA did to Mexicans, have protested, marched and even fought in the streets of El Salvador, Guatemala and most recently Costa Rica, to stop ratification of the Central American Free Trade Agreement. Now that rebellion is spreading to Peru.
No major union or organization of poor farmers wants the trade agreement that the Bush administration negotiated. No wonder. They don't want to say goodbye to their families and start looking for work in Los Angeles, San Francisco or New York.
To get the Peru treaty through Congress, its supporters claim it will protect labor rights. Peruvian unions don't believe this promise any more than they believe it will bring them jobs.
Today a huge mining corporation, Grupo Mexico, has provoked a strike by demanding that miners work 12 hours a day instead of eight in Peru's largest copper mine. The Peruvian government supports the company, because it believes longer hours and lower wages will attract more foreign investment. Since NAFTA passed, the same company has forced strikes and cut thousands of jobs at its Mexican mines to cut labor costs, and the government there has also cooperated.
NAFTA's toothless labor rights protections never stopped union busting and job elimination in Mexico. They won't in Peru either.
Continued>>>>
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David Bacon is a California photojournalist who documents labor, migration and globalization. His book Communities Without Borders was just published by Cornell University/ILR Press.
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http://www.blogforamerica.com/view/23080
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