NAFTA at Ten: "Free" Trade robs jobs

David Bacon, 11/19/2003

SAN FRANCISCO, CA (11/16/03) — This week thousands of demonstrator

will fill Miami streets, in a show of opposition to free trade unseen

(at least in this country) since the battles in Seattle four year

ago. Opponents plan to hit the proposal for a Free Trade Area of the

Americas with the same one-two punch that forced trade ministers to

end talks in Cancun in October with no new agreement.

While a sea of grassroots opponents lay siege in the streets to the Miami hall where ministers meet once again, inside the meeting itself the new leftwing

governments of Latin America - Brazil, Ecuador, Argentina and

Venezuela - have already formed an implacable opposition.

As demonstration and debate unfold, in the eye of the storm is the one

free trade agreement that already provides an idea of what the

Americas can expect from the Bush free trade plan. In just a few

short weeks, the North American Free Trade Agreement will be ten year

old. And for FTAA's opponents, that ten-year history of devastation,

wreaked in Mexico and the US both, will be the key argument in

stopping its extension to the rest of Latin America.

The communities of working people and the poor, on both sides of the

border, have paid the price for trade liberalization, while the

benefits have been reaped by the tiny clique who promoted NAFTA ten

years ago.

In one of life's ironies, successive Secretaries of the US Department

of Labor - among NAFTA's most ardent supporters - have kept close

track of the treaty's high cost in US jobs. By 2002, the department

had certified that 408,000 workers qualified for extensions of

unemployment benefits, because their employers had moved their job

south of the border.

Most observers believe this is a vast undercount. According to NAFTA

At Seven, a report by the Economic Policy Institute, "NAFTA eliminated

766,030 actual and potential U.S. jobs between 1994 and 2000 because

of the rapid growth in the net U.S. export deficit with Mexico and


While the job picture for US workers was grim, NAFTA's impact on

Mexican jobs was devastating. Before leaving office (and Mexico

itself, pursued by charges of corruption), President Carlos Salinas de

Gortari promised Mexicans they would gain the jobs the US lost. And on

tours to the US to promote the treaty, he promised that this job gain,

although painful for US workers, would halt the northward flow of

Mexican job seekers.

NAFTA's first year saw instead the loss of over a million jobs all

across Mexico, in the wake of economic crisis. To attract investment,

NAFTA-related reforms required the privatization of factories,

railroads, airlines and other large enterprises. This led to further

huge waves of layoffs. And because unemployment and economic

desperation in Mexico increased, immigration to the US has been the

only hope for survival for millions of Mexicans.

For a while, however, it seemed that the growth of maquiladora

factories along the border would make up for at least part of the job

loss. By 2001, over 1,300,000 workers were employed in over 2000

border plants, according to the Maquiladora Industry Association. But

tying the jobs of so many Mexicans to the US market, for which the

plants were producing, proved a disaster as well.

When US consumers stopped buying as the recession hit in 2001, maquiladoras also began shedding workers. The Mexican government estimates that over 400,000 jobs disappeared in the process — as the saying goes on the border,

when the US economy catches cold, Mexico gets pneumonia. A two-year

PR campaign by the association and the Mexican government to blame the

loss in border jobs on Chinese competition then sought to obscure the

obvious fact that the plants produced far more goods than a recession-

plagued market in the US could absorb.

But the most serious consequence of NAFTA has been its failure to

protect the rights of workers as promised by its supporters. To

attract investment to the maquiladoras, Mexican government authoritie

cooperated with investors and compliant official unions in maintaining

a low-wage economy, reinforced with a system of labor control.

According to Martha Ojeda, director of the Coalition for Justice in

the Maquiladoras, the government-mandated minimum wage for workers on

the border is about $4.20. She estimates that a majority of

maquiladora workers earn close to this wage.

A study by the Center for Reflection, Education and Action, a

religious research group, found that at the minimum wage, it took a

maquiladora worker in Juarez almost an hour to earn enough money to

buy a kilo (2.2 pounds) of rice, and a worker in Tijuana an hour and a

half. And yet another study by the Economics Faculty of the National

Autonomous University in Mexico City says Mexican wages have lost 81%

of their buying power in the last two decades.

To enforce this system, maquiladora workers are required to belong to

unions that have no intention of raising those low wages or helping

them end exhausting and dangerous working conditions. Throughout

NAFTA's ten-year history, workers have sought to break free in a long

labor war waged from plant to plant along the border. They have

organized independent unions, willing to fight for a larger share of

the enormous wealth the factories produce.

But these efforts have been met with firings, plant closures, and even physical violence. Ten years of hearings held under NAFTA's labor sideagreement have

documented extensive violations of labor rights. In those few

instances in which workers have successfully formed independent

unions, as they did at Tijuana's Han Young plant in 1998-9, their

strikes were broken, despite guarantees under Mexico's Constitution

and Federal Labor Law.

NAFTA's sponsors promised that the treaty's labor sideagreement would

protect workers, even though the treaty itself was intended to

demolish all barriers to foreign investment. The sideagreement proved

toothleess. In ten years not one fired worker has been returned to

his or her job, and not one independent union has gained legal statu

and a contract as a result of the NAFTA process.

Instead, the historical labor protections built into Mexico's legal

system have been systematically undermined and eliminated as obstacle

to investment. Even when Mexican judges held that strikes were legal,

as did Maria Lourdes Villagomez Guillon of the Federal 5th District in

1998, and Pedro Fernandez Reyes Colin of the First Collegial Court of

the Fifteenth District (Baja California's highest judicial authority)

in 1999, their decisions were defied with impunity by government

authorities. Under NAFTA, breaking strikes and unions on the border

has become an integral part of economic development, and legal

protections for workers have been swept away.

Four years ago, at the height of the protests against the World Trade

Organization, Zwelenzima Vavi, the head of the South African Congre

of Trade Unions, described the alternative to NAFTA and the free trade

philosophy underpinning it. "In the pursuit of profit," he said,

"governments are told to remove worker protections, and then use that

as an inducement for investment. But development is a wider concept.

It includes social development, and the living conditions of the

people. Development can't exist with mass unemployment and poverty."

As the opposition gathers in Miami, these are the words that critic

of NAFTA and FTAA will put before the world.

David Bacon is a writer and photographer, and associate editor for Pacific News Service. His forthcoming book, The Children of NAFTA, will be published by University of California Press this winter. He is currently completing a photodocumentary project titled Transnational Working Communities, which is being sponsored by the Rockefeller Foundation. He often writes for The American Prospect.