Skip to comments.The NAFTA Scam [Socialism Alert!]
Posted on 08/24/2002 2:38:30 PM PDT by CanadianFella
The NAFTA Scam
It is now three years since the North American Free Trade Agreement (NAFTA) became law. The results are in: NAFTA is a disaster for workers in the United States, Mexico and Canada.
The U.S. and Canada have lost thousands of jobs because of NAFTA. Mexico is trapped in a severe economic crisis in which workers bear the largest burden as their working conditions worsen. The U.S.- Mexico border was a health and environmental disaster when the NAFTA agreement was signed in 1994. Today, the border area is worse because of additional health and environmental problems caused by the impact of NAFTA.
Despite this, the Administration, influenced by business lobbyists, wants to apply NAFTA to Chile and the 27 countries known as the Caribbean Basin, and ultimately to all of South and Central America.
In this UNITE FIGHTsize we investigate the problems with NAFTA and the ways we can take action to fight back against the business interests that are pursuing this anti-worker strategy.
|NAFTA isn't working for American, Canadian or Mexican workers|
NAFTA's impact on American workers
American workers know what has happened to them because of NAFTA: loss of jobs and a decline in living standards. How could NAFTA have such a devastating impact on American workers?
In 1993, the year before NAFTA was passed, the U.S. had a $1.7 billion trade surplus with Mexico. This means that Mexicans were buying more American goods than Americans were buying from Mexico.
After NAFTA, however, the situation was reversed. American business fled to Mexico in search of lower wages and lax labor and environmental regulations. They produced goods in Mexico to sell in the U.S. Our trade surplus with Mexico became a $16.2 billion dollar trade deficit.
Due to this trade deficit, the U.S. has lost over 250,000 jobs.
When workers lose their jobs because a plant relocates to Mexico, they usually experience a serious decline in their standard of living, even if they get new jobs. Workers rehired after losing their jobs in the early 90's suffered an annual pay loss of over $4,400.
Corporations use NAFTA as a bargaining chip to limit union organizing and keep wages down.
As bad as NAFTA has been for jobs, it may have damaged wage levels even more
During the debate over NAFTA, a Wall Street Journal poll found that a majority of executives from large companies already had plans to shift some production to Mexico and that a large number intended to use NAFTA "as a bargaining chip to keep down wages in the U.S." This trend continues. According to a recent study, in more than half of union organizing drives, the threat of moving jobs to Mexico or closing plants was used to limit organizing success.
NAFTA contributes to a corporate strategy-investment overseas, production cutbacks at home and sharp demands for wage and benefit concessions from workers-that has had a devastating impact on American families. Hundreds of thousands of people have lost their jobs, many of them permanently. Communities have been drained of resources and income, and years of accumulated skills have been wasted.
|NAFTA's impact on Canadian workers|
In the late 1980s and early 1990s, a massive wave of plant closures and layoffs hit Canada. Tens of thousands of workers permanently lost what had once been secure and decent jobs. NAFTA has added to the high Canadian unemployment rate and job insecurity. Similar to the United States, after NAFTA, Canada lost jobs as its trade deficit with Mexico grew from $2.9 billion to $4.3 billion. Also, like the United States, Canadian workers' pay has not kept up with inflation and wages have been much slower to rise when compared to gains in worker productivity.
NAFTA has also contributed to undermining Canada's strong social programs, particularly unemployment insurance and national health care. The Canadian Manufacturers Association and the Canadian Chamber of Commerce are trying to cut Canada's social programs while blaming cuts on international competition. Rather than maintain Canada's "high road" social safety net, they want to reduce social welfare benefits by forcing Canadian workers to lower their expectations.
|NAFTA's Impact on Mexican workers|
After NAFTA went into effect, Mexico fell into serious social, political and economic crisis. The Mexican peso lost 50% of its value; the government was nearly bankrupt. An armed uprising in the southern Mexican state of Chiapas highlighted the country's economic, geographic and racial divisions. Political assassinations and allegations of corruption continue to undermine faith in the political system at the highest levels of government.
Defenders of NAFTA claim that the economic crisis in Mexico was not caused by NAFTA, but rather by Mexico's currency crisis. But, to ensure NAFTA's passage, the U.S. government supported a corrupt and financially incompetent political regime in Mexico. The Mexican government stalled on the necessary currency adjustments in order to attract U.S. investment and capital.
The Mexican economic crisis is characterized by two broad trends. Many Mexican manufacturers have gone bankrupt, resulting in the loss of over one million jobs in Mexico. Meanwhile, there has been an increase in foreign-owned manufacturers that export mostly to the United States.
There has been a tremendous increase in the number of maquiladora plants-foreign owned plants that receive special tax breaks and export almost all of their production to the U.S.-and an almost 50% increase in the maquiladora work force since NAFTA began. According to the Mexican government, the maquiladoras employ more than 800,000 workers. These plants are exempt from tariffs on imported raw materials and components as long as the final product is exported. The wages workers earn at these jobs make it almost impossible to raise a family. For example, a gallon of milk costs almost three hours of wages. Mexican workers have borne the brunt of the economic crisis in Mexico. Despite the increases in productivity and quality, real manufacturing wages in Mexico are 25% lower then they were before NAFTA.
According to the Coalition for Justice in the Maquiladoras, General Motors is Mexico's largest foreign employer. The 74,500 employees of GM's Mexican maquiladora operations earn around 70 cents an hour in 54 factories in 27 different Mexican cities. sIn Juarez City, Mexico, across from El Paso on the U.S.-Mexico border, the average wage of a maquila worker is 44 cents an hour.
Why NAFTA isn't working for workers
NAFTA's single biggest defect is its failure to adequately address workers' rights- the right to strike, the right to organize and the right to freely associate. The failure to adequately enforce such core labor laws in Mexico means that Mexican wages have failed to rise.
While businesses demanded-and got-a provision in NAFTA that requires Mexico to protect the rights of investors, there is no similar provision for enforcement of Mexico's labor laws or, for that matter, Mexico's environmental laws. This means that when Mexico fails to enforce its labor laws, resulting in Mexican workers' wages being held down and their rights denied, there is little that we can do other than complain.
There is a labor side agreement-it isn't part of the actual trade treaty- that, in theory, addresses workers' concerns. But in practice, it is nearly useless. Five cases concerning Mexico have been brought under the labor side agreement for labor violations in Mexico. But there has been no noticeable change on the ground. Take, for example, the cases at General Electric in Ciudad, Juarez or Honeywell in Chihuahua where workers were fired for trying to organize independent unions. Those unions remain unrecognized. Those workers have not been reinstated.
In the maquiladoras, workers don't have the ability to fight for better working conditions. If they complain, they are fired. Maquiladora owners keep lists of "problem" employees who are blacklisted because of their complaints.
If we don't have an effective way of addressing this problem, Mexican workers aren't going to get a fair deal. They won't be fairly compensated for their hard work and Mexican workers will not be able to buy the goods they make, or goods made by workers in the U.S. or Canada.
|Who benefits from NAFTA?|
UNITE members-and all workers in North America-are painfully aware of NAFTA's impact on workers. But, someone is surely benefiting from this trade agreement. If they weren't, there wouldn't be this new push to expand NAFTA even further. So, who's reaping the rewards?
Multinational corporations benefit from NAFTA
The NAFTA legislation is 2,000 pages, almost all of which is concerned with reducing trade barriers and protecting foreign investors in Mexico.
Mexico's attraction for corporations is not the small Mexican consumer market (Mexico's economy is less than 4% of the U.S. economy). It is the labor force of more than 30 million people willing to work for a tiny fraction of U.S. wages.
Corporations seeking to maximize profits will tend to locate production where costs are lowest. Of course, there are other factors: worker skills and reliability, quality of physical infrastructure, communications networks, and political stability, among others. Even so, the vast differences between wages in the U.S. and Canada and Mexico and the inconsistent enforcement of labor standards and workplace regulations in Mexico combine to provide a powerful incentive for multinational corporations to move production to Mexico.
|Now, we have to fight a new NAFTA|
Big business interests and their political allies are proposing to extend NAFTA, first to Chile and then to the Caribbean Basin, and ultimately to all of Latin America...
The Clinton Administration's position on NAFTA
The Clinton Administration does not want to fix NAFTA so that it will help workers. Instead, the first step in the Administration's plan is to apply NAFTA to Chile and the Caribbean.
To achieve this expanded NAFTA, the Administration wants to get "fast track" negotiating authority from Congress.
Opposing Fast Track
Fast track is a term for legislation that allows the President to push a bill quickly without amendments. When Congress gives the President "fast track" authority, it can only vote "yes" to pass the bill or "no" to defeat it. No amendments are allowed. If Congress gives President Clinton this fast-track authority, they are, in effect, giving the Administration the right to negotiate future trade agreements exactly the way the Administration wants to. Because the Administration's position on NAFTA expansion will not help workers, we must oppose "fast track."
|We also oppose NAFTA "parity" to the Caribbean Basin|
In addition to extending NAFTA to Chile, the Administration is also proposing parity- that is, equal application of NAFTA's provisions-for the 27 countries in the Caribbean Basin.
Providing NAFTA parity to the Caribbean would extend to this region all the disadvantages of NAFTA. There would be strong protection for the rights of investors and multinational corporations with little concern for workers' rights and labor and environmental standards. NAFTA parity for the Caribbean will put thousands of UNITE members' jobs at risk, worsen human rights in the Caribbean and perpetuate the poverty of these countries. With imports already flooding in from the Caribbean, there is no reason to further encourage them.
|What does UNITE! want?|
We want fair trade agreements
The real problem is not trade with Mexico and Canada, but rather the specific set of rules included in NAFTA. Our current trade agreements protect investors, multinational corporations, patent and copyright holders, and speculators. Workers are the only interested party whose rights are not addressed by these agreements.
It should be the explicit policy of the United States that there will be no more international trade and investment agreements without specific provisions to enforce worker rights. This would put multinational corporations on notice that workers deserve an equal playing field. Then, corporations won't be able to take advantage of workers in countries which have a deliberate policy of suppressing free trade unions in order to attract foreign investment.
UNITE wants NAFTA renegotiated to guarantee the right to organize unions, the right to minimum health and safety standards, and prohibitions of child and prison labor. UNITE members and their families need a new NAFTA that benefits the working people of all three countries.
What you can do
UNITE members have been hurt by NAFTA through lost jobs, closed plants, and employer threats. But we are not alone. NAFTA harms workers-union and non-union. It pollutes the environment by encouraging corporations to do the wrong thing both inside and outside the factory.
It's time to fight back!
For more information on NAFTA and other issues critical to workers jobs, families and communities, email
Or print out this card and send it to:
New York, NY 10019-5299
Attn: Political Dept.
And James Carville! Don't forget the Ragin' Cajun was down there campaigning for the corrupt PRI.
Compete or die folks, it's that simple. If you can't compete with Mexican labor then get out of the needle trades. And if the Mexican government isn't enforcing its own labor laws then that is a matter for the Mexican voters to handle.
The savings gained in locating a plant outside the united states is in government regulation costs and taxes. That can amount to many thousands of dollars per car.
When one adds up the property tax, inventory tax, personal property tax, income tax, excise taxes and the costs of complying with tens of thousands of governemnt regulations, it just makes sense to make stuff elsewhere where those costs are not incured.
By the way, corporations do not meaure labor costs by what a worker is paid per hour. Labor costs are measued in value added to the products. How many dollars are added to the value of the product for each dollar of labor spent is the importan number.
That is a high number in the USA and a much lower number in many "low labor cost" nations. Workers in the USA are very productive. You get a lot of value added to products for each dollar spent even though workers are being paid a lot more per hour.
It is not the labor cost that drives companies out of the united States... that is a liberal lie. It is the cost of government that companises have to bear if they make the stuff here and don't have to pay if they make it elsewhere.
I found some interesting numbers in a a GM anual report. It listed the total payroll for a Caddie plant. It listed the number of Caddies made at that plant. Divide the total payroll by the number of cars made and you get the cost of labor in each car. For a 40 grand caddie made in the USA that was just over 1,000 dollars. That means if GM workers worked for free the cost of a Caddie would only go down a $1,000. And if the Caddie workers got paid twice what they get now the price of a Caddie would go up from 40 to 41 grand.
It is not the cost of labor that sends jobs out of this nation.
We should go further and force businesses to hire Americans only and pay them $30 per hour for their labor...
This will of course massively help the economy because we all know businesses are just greedy and they owe workers a living...
How will this help the economy???
Because Americans will have more money to spend because everyone is making much more money...
And then we'll all be rich!!
Death to NAFTA!!!
Force businesses to pay us what we want...
Because if it weren't for workers, businesses wouldn't exist!!!
We now return you to your regularly scheduled socialism...
When do they want it?
The question is: where does it get its money? I guaran-damn-tee you UNITE! doesn't give a flying fig about the poor oppressed people of Outer BFE.
Just like Greenpeace, PETA, The Sierra Club and every other left-wing wacko fringe group, all they care about is fattening their own wallets. And their lunacy ultimately ends up harming the very people they expect us to believe they care about.
At least the multi-national corporations they despise provide goods or services in exchange for their greedy quest for profits. What does UNITE! provide besides more class envy?
To hell with UNITE!....and take Canada with you.
In todays automated manufacturing the cost of labor is anything is peanuts. The amount of labor in most products is measured in seconds. The amount of the labor in making a can of Coca Cola for example is a very few seconds. The labor cost is insignificant. The same is true for a VCR or TV. It is not slave labor that is the problem. If Slave labor was the answer then the south would have beat the north in the civil war.
The NORTH had no Slave labor. The SOUTH had lots of slave labor yet the north out produced the south in the civil war. The North even produced more textiles than the south in the civil war.
NO NATION THAT EMPLOYS SLAVE LABOR has ever become an industrial power.
Maybe not but I'd sure like to know where I can get all the parts to build that Caddie for free. If I can get the water pump, barings , rubber and plastic moldings, bumper, fenders , axles , transmission, motor , windshield , radio, A/C, tires and everything else including the new smell for free I'll pay for 10 hours at 200 bucks just to have someone else put the thing together. Sell it to you for about 25% of the going wholesale price too.
Yeah right...you're so full of something that your eyes are brown.
So, Common spud, explain some history to us. How did the U.S. fund itself into a world power before your heroes (TR,WW &FDR)began to lay the ground work for your globalist utopia?
You globalist anti-conservatives amaze me. Let me ask you something, when you say the pledge, do you say, "...to the United States of Costco...?"
What makes you think a 1400 page document bears any relationship to free trade? The name?
I think your example is good but oversimplified. For example that GM plant is just doing final assembly on parts made elsewhere. Don't ignore all that labor.
Ah, the UNITE people. I see them out protesting in Philly from time to time, usually along with the Mumiacs. They are a bunch of princes, to be sure.