MEXICO/UNITED STATES: NAFTA at 10

Issue 

BY DAVID BACON

SAN FRANCISCO — There is a free-trade agreement that gives an idea of what Latin America can expect from the US President George Bush's Free Trade Area of the Americas (FTAA). In a few weeks, the North American Free Trade Agreement (NAFTA) will be 10 years old. And for the FTAA's opponents, that 10-year history of devastation, wreaked in Mexico and the United States, will be the key argument in stopping its extension to the rest of South America.

Working people and the poor, on both sides of the Mexican-US border, have paid the price for trade liberalisation, while the benefits have been reaped by the tiny clique who promoted NAFTA 10 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 moved their jobs 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 US jobs between 1994 and 2000 because of the rapid growth in the net US export deficit with Mexico and Canada."

Mexico devastated

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. On tours to the US to promote the treaty, he promised that these job gains, although painful for US workers, would halt the northward flow of Mexican job seekers.

NAFTA's first year saw instead the loss of over 1 million jobs across Mexico. To attract investment, NAFTA-related reforms required the privatisation of factories, railways, airlines and other large enterprises. This led to huge waves of layoffs.

And because unemployment and economic desperation in Mexico increased, immigration to the US has become the only hope for survival for millions of Mexicans.

For a while, however, it seemed that the growth of maquiladora factories (foreign-owned factories that produce for the export market that receive favoured treatment by the Mexican government in terms of export duties and taxes) along the border would make up for at least part of the job losses. By 2001, more than 1.3 million workers were employed in more than 2000 border plants, according to the Maquiladora Industry Association (MIA).

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 when the recession hit in 2001, maquiladoras also began shedding workers. The Mexican government estimates that more than 400,000 jobs disappeared in the process.

A two-year PR campaign by the MIA and the Mexican government blamed the loss of border jobs on Chinese competition and sought to obscure the obvious fact that the plants produced far more goods than a recession-plagued market in the US could absorb.

Workers' rights

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 authorities cooperated with investors and compliant official unions to maintain a low-wage economy, reinforced with a system of labour 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 US$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 of rice, and a worker in Tijuana an hour and a half. Another study, by the economics faculty of the National Autonomous University in Mexico City, found that 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 their low wages or helping them end exhausting and dangerous working conditions. Throughout NAFTA's history, workers have sought to break free in a long labour war waged from plant to plant along the border. They have organised independent unions willing to fight for a larger share of the enormous wealth that the factories produce.

These efforts have been met with firings, plant closures and physical violence. Ten years of hearings held under NAFTA's labour side-agreement have documented extensive violations of workers' 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 labour law.

NAFTA's sponsors promised that the treaty's labour side-agreement would protect workers, even though the treaty was intended to demolish all barriers to foreign investment. The side-agreement proved toothless. In 10 years, not one fired worker has been returned to his or her job, and not one independent union has gained legal status and a contract as a result of the NAFTA process.

Instead, the historical labour protections built into Mexico's legal system have been systematically undermined and eliminated as obstacles to investment. Even when Mexican judges held that strikes were legal, their decisions were defied with impunity by government authorities. Under NAFTA, breaking strikes and unions has become an integral part of economic development, and legal protections for workers have been swept away.

[David Bacon is a US-based journalist. Visit <http://dbacon.igc.org/>.]

From Green Left Weekly, November 26, 2003.
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