Time to End CEOs 5-Year NAFTA Party
Date: Fri, 25 Dec 1998
From: robatessential.org

It has been a five-year party for multinational corporations, which will celebrate the fifth anniversary of the implementation of the North American Free Trade Agreement (NAFTA) on January 1.

Unfortunately, the corporate CEOs have been dancing on the heads of the rest of us.

While NAFTA has made its contribution to soaring corporate profitability over the last half decade, it has degraded jobs, living standards, the environment and democracy in both the United States and Mexico, as well as in Canada.

When the United States debated NAFTA — imagine, a time when the national debate concerned matters central to the evolution of the political economy! — labor unions, consumer groups, environmentalists and others issued a straightforward critique. Under NAFTA, they said, corporations would move South in order to exploit Mexico's cheap labor and weak environmental protections. And even corporations that remained in the United States, they contended, would use the threat of relocation to leverage bargaining power over workers, communities and governments.

NAFTA proponents told a different story. They said that increased exports to Mexico would create hundreds of thousands of new, good-paying jobs in the United States, while increased foreign investment in Mexico would raise Mexican living conditions. Pessimists' alarmism was misplaced, they said, noting that the trade deal even had attached "side agreements" specifically designed to protect labor rights and the environment.

More than enough time has now passed to assess who was right. Unfortunately, the critics' fears have come to pass, while the proponents' promises have proven illusory.

A new, extremely well documented report card from Public Citizen's Global Trade Watch gives NAFTA a failing grade in U.S. job creation and job quality, agriculture, the environment, public health, wage levels in the United States and Mexico, economic development and living standards in Mexico, sovereignty and democratic governance and highway safety.

Consider the central issue of jobs and wages. A single narrow U.S. government program that tracks trade-related job loss has now certified the loss of more than 200,000 specific U.S. jobs due to NAFTA. Proponents are completely unable to point to offsetting jobs created as a result of NAFTA. Indeed, the Public Citizen report card notes, "several years ago the U.S. Commerce Department canceled its program of bi-annual surveys of U.S. companies to document NAFTA job creation because the data was so embarrassing — fewer than 1,500 specific jobs could be documented."

The actual figure for job loss is almost certainly far worse than the government figures suggest. Under NAFTA, the U.S. $1.7 billion trade surplus with Mexico has flipped into a massive trade deficit, estimated at $14.7 billion for 1998.

It is of course the case that the unemployment rate in the United States is now quite low, at least by recent historical standards. But under NAFTA, good-paying manufacturing jobs have been rapidly replaced by low-wage service jobs — cashiers, janitors, retail clerks.

The remaining manufacturing jobs are under severe pressure. While factory jobs in the United States pay, on average, more than $18 an hour, maquiladora workers in high-tech foreign plants in Mexico earn about a buck and a half an hour.

Employers have made explicit use of the threat to move to Mexico to beat back union organizing efforts, as well as to deny demands for wage increases. Cornell researcher Kate Bronfenbrenner has documented a tripling of employer plant-closing threats during union organizing drives since NAFTA's adoption.

Meanwhile, NAFTA has simultaneously failed to deliver the touted benefits for Mexico. In a kind of mutant industrialization, NAFTA has turned huge swaths of the country into a processor of goods for export to the United States. The nationwide export processing zone model has proved an abject failure. There are few linkages between the export factories and the rest of the economy. Small Mexican business has collapsed. Workers' productivity is up 36 percent since NAFTA went into effect, but Mexican wages fell 29 percent between 1993 and 1997.

Though the story is less stark in other areas, the Public Citizen report card makes clear that NAFTA deserves an "F" in every subject.

A failure for citizens, a party for Big Business. It is time to end the NAFTA nightmare. NAFTA — and the model in which corporations are able to drag down labor, environmental and consumer standards by pitting countries against each other in a race to the bottom — must be scrapped.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.

© Russell Mokhiber and Robert Weissman

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