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 MexicoUs 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. PessimistsU 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 criticsU fears have come to pass, while the proponentsU
promises have proven illusory.
A new, extremely well documented report card from Public CitizenUs 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 NAFTAUs 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. WorkersU
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.
(c) Russell Mokhiber and Robert Weissman
Focus on the Corporation is a weekly column written by Russell Mokhiber
and Robert Weissman. Please feel free to forward the column to friends or
repost the column on other lists. If you would like to post the column on
a web site or publish it in print format, we ask that you first contact us
([EMAIL PROTECTED] or [EMAIL PROTECTED]).
Focus on the Corporation is distributed to individuals on the listserve
[EMAIL PROTECTED] To subscribe to corp-focus, send an e-mail
message to [EMAIL PROTECTED] with the following all in one line:
subscribe corp-focus <your name> (no period).
Focus on the Corporation columns are posted on the Multinational Monitor
web site <www.essential.org/monitor>.
Postings on corp-focus are limited to the columns. If you would like to
comment on the columns, send a message to [EMAIL PROTECTED] or
[EMAIL PROTECTED]
