Magazine article New Internationalist

Up for Grabs: It Was Sold on a Promise of Boosting Employment, Increasing Wages and Bringing Job Security. but a Decade Later, the Effects of the North American Free Trade Agreement Have Been Nothing Short of Disastrous - Especially in Mexico

Magazine article New Internationalist

Up for Grabs: It Was Sold on a Promise of Boosting Employment, Increasing Wages and Bringing Job Security. but a Decade Later, the Effects of the North American Free Trade Agreement Have Been Nothing Short of Disastrous - Especially in Mexico

Article excerpt

2 Changing the rules - LABOUR RIGHTS

Unregulated trade allows corporations to pit workers against each another, to reduce the bargaining strength of trade unions, to strip away benefits, to ignore dangerous working conditions and to reduce wages. Instead, trade agreements must bolster the rights of working people by promoting labour rights - including the freedom to bargain collectively.

THE North American Free Trade Agreement between the US, Canada and Mexico is 10 years old. President Bush calls it a great success and vows to extend it to the rest of Latin America. Bill Clinton before him promised that the rising tide of cross-border trade would 'lift all boats', benefiting everyone.

The agreement certainly produced some winners. Large corporations building factories south of the US/Mexico border have been able to cut labour costs and increase profits. Mexico created a new generation of billionaires during the treaty's lifetime.

But the swell of profits and productivity did not lift all boats. Instead, on both sides of the border, communities of working people and the poor have paid dearly for trade liberalization.

If anything, predictions of US job losses were underestimated. By November 2002, the US Department of Labor (DoL) had certified 507,000 workers for extended unemployment benefits because their employers had moved their jobs south of the border. The number was so embarrassing that Bush told the DoL to stop counting.

Most observers believe half a million is a significant undercount - partly because many jobless workers don't know they qualify for benefits. According to the Washington-based Economic Policy Institute, NAFTA eliminated nearly 880,000 jobs.

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 Saunas de Gortari promised Mexicans they would gain the jobs the US lost. And promised the US that new jobs south of the Rio Grande would halt the flow of Mexicans heading north.

Instead, during the first year of the deal Mexico lost over a million jobs as NAFTA-related reforms required the privatization of factories, railroads, airlines and other large enterprises. This led to waves of layoffs. And because unemployment and economic desperation in Mexico increased, the flow of migrants to the US actually increased. Meanwhile, Salinas de Gortari's stock plummeted and he became the most unpopular president in Mexican history.

For a while it seemed that the growth of maquiladora factories, little more than sweatshops, along the border would make up for at least some of the job losses. According to the Maquiladora Industry Association more than 1.3 million workers were employed in 2,000 border plants by the end of 2001. Most maquiladoras produced exclusively for the US market. But tying the jobs of so many Mexicans to this market proved a disaster as well. When Americans stopped buying during the recession of 2001, the maquiladoras shed thousands of workers. The Government estimates 400,000 jobs disappeared. As the saying goes: 'When the US economy catches cold, Mexico gets pneumonia.' The industry association and the Mexican Government blamed the job losses on Chinese competition, burying the fact that the plants produced far more goods than a recession-plagued US market could absorb.

But the most serious consequence of NAFTA has been its failure to protect the rights of workers. To attract investment Mexican authorities worked with 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 $4.20 a day - the same as it was 10 years ago when the treaty came into effect.

According to the Center for Reflection, Education and Action (a church-based research group), a gallon of milk which costs $3 in a Tijuana supermarket takes 5-6 hours of a maquiladora worker's labour to buy. …

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