The NAFTA Nightmarehttp://multinationalmonitor.org/hyper/issues/1992/10/mm1092_10.htmlby Bill Day
AMID A STORM OF PROTEST, the leaders of the United States , Mexico and Canada announced on August 12 the conclusion of negotiations over a free trade agreement encompassing the vastly different countries of North America. The Bush administration released a summary of the North American Free Trade Agreement, but declined to release the actual text until it is translated into legal language. The agreement faces perfunctory approval in the Mexican and Canadian legislatures, which are controlled by the same parties which hold those countriesÆ executive positions. In the United States, however, the agreement must be ratified by the Democratic controlled Congress, where it is sure to be the subject of heated debate.
While the administration and industry groups boast that NAFTA will create jobs and prosperity, unions, environmental groups and consumer advocates predict it could result in increased pollution, lost jobs, lower wages and contaminated food. Consumer advocate Ralph Nader says that NAFTA was created "of the Du Ponts, for the General Motors, and by the Exxons," benefitting multinational corporations at the expense of labor, health, safety and environmental standards in all three signatory countries.
"We oppose it," says Burnie Bond, a spokesperson for the AFL-CIO. "The agreement does not have adequate protection for labor rights, worker health and safety or the environment." The AFL-CIO estimates that if Congress approves NAFTA, 73 percent of U.S. workers will suffer annual wage losses of approximately $1,000 and 500,000 to 600,000 workers will lose their jobs to lower-paid Mexican workers over 10 years.
In sharp contrast, industry representatives express enthusiasm for the proposed agreement. Howard Lewis, a spokesperson for the National Association of Manufacturers (NAM), says, "From what we know about it, it appears to be an impressive agreement that will be beneficial to many U.S. companies."
Costing jobs The central element in the congressional debate over NAFTA is likely to be its effect on employment. Critics of the agreement contend it will cost hundreds of thousands of U.S. jobs, as U.S. businesses shift production from the United States to low-wage Mexico. The United States Trade Representative (USTR) concedes that some U.S. workers will be displaced as a result of the agreement, but estimates that between 600,000 and one million new jobs will be created by exports to Mexico. The Washington, D.C.- based Economic Policy Institute (EPI), in a recent report authored by Jeff Faux and Thea Lee, estimates NAFTA will cost half a million U.S. jobs.
The authors further predict that NAFTA will encourage U.S. industry to move production to Mexico to take advantage of low wage rates and lax industry regulation. As a result, the report says, U.S. workers will lose jobs, or be forced to accept lower wages to compete with cheap Mexican labor. Faux and Lee cite 1990 Department of Labor statistics which list the hourly wage for manufacturing workers as $14.83 in the United States, $15.94 in Canada and $1.85 in Mexico."I think that this version of NAFTA will be very hard on working class people," Lee says. She predicts that U.S. workers in several types of industry will suffer: those in industries already moving to Mexico, such as automobiles and auto parts, consumer electronics and apparel, who will be subjected to both job and wage losses; workers employed at small- and medium-sized businesses that cannot relocate and will become unable to compete with corporations in Mexico; and workers in small service businesses, like restaurants, which will undergo hardship when large plants move out of their neighborhoods. Finally, Lee argues, growers of products currently protected by high tariffs, such as winter fruits and vegetables, cotton and peanuts, will suffer when the tariffs are removed by NAFTA.
Faux and Lee point out that blue-collar workers who lose their jobs are unlikely to gain access to the high-skill, high-wage jobs that might be created by increased exports to Mexico.
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Critics of the agreement argue that corporate flight to Mexico will not benefit Mexico or Mexican workers, since corporations will be moving South precisely to take advantage of the country's low wages, worker rights, safety and environmental standards. NAFTA-induced investments will replicate the record of the string of maquiladoras (foreign-owned plants in Mexico which export to the United States)
on the U.S.-Mexican border, where "there is no floor on how low you (can) push wages and no limit on how badly you (can) abuse the environment.""NAFTA is an extension of the maquiladora production system to the entire Mexican economy," Lee says. "The point of the maquiladora is to import parts from the United States, assemble them with Mexican labor and export them to the United States." According to Lee, because goods produced in the maquiladoras are sold in the United States,
corporations have no incentive to pay a living wage. "Very few firms producing in the maquiladoras have any intention of selling their goods to the workers who work there. So it doesn't matter if you pay 60 cents an hour, because you know that person isn't going to buy the automobile or refrigerator or bra that you're producing. You've ruptured the connection between production and consumption."More.....
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