Naftashock

The Giant Sucking Sound Revisited

AS THE SECOND anniversary of NAFTA presses near, its impact is at last becoming a matter of record. The report card reflects happy times for American multinationals and an accelerated version of the same grim trendlines for everyone else:

§ Contrary to promises that the trade agreement would create 200,000 new American jobs in 1994 alone, NAFTA to date has snuffed out well over a quarter of a million paychecks. Ralph Nader's group, Public Citizen, surveyed 66 corporations that had gone on the record promising new jobs if NAFTA was passed. Of these, 59 have reneged. Exact figures on cumulative job losses are impossible to come by, but the estimates start around 350,000--a sum derived by applying the rosy formulae of NAFTA's boosters--and go up from there. In an uncharacteristically blunt New York Times analysis, Bob Herbert wrote that the real job losses owing to free trade with Mexico likely "will reach one million by the end of the year."

§ The U.S. trade surplus with Mexico, which stood at $3 billion for 1993 and could only rise according to the Clintonite script, has turned into an $8.6 billion deficit for the first six months of 1995 alone. It's expected to match that in the second half.

§ Real wages for the 77 million Americans in production jobs fell 3 percent in 1994, the most precipitous single-year decline since wages started falling in 1973. To add insult, the $20 billion bailout for Wall Street following last December's peso collapse--"aid to Mexico" that for the most part never went any farther than New York City--was added to taxpayers' tab.

NAFTA was to be the rising tide that would lift all boats--modernizing Mexico's infrastructure, raising living standards, and turning it into a stylishly rustic version of the American consumer market. Capital's run for the border would end and new U.S. jobs would abound. But wages in Mexico have continued to drop as a share of the national income even as consumer prices have risen, and foreign investment in the interior has declined. Meanwhile, business in the border maquila zone, where there is no environmental enforcement and workers are paid pennies an hour, is "booming," attests the Wall Street Journal. Maquila Association chief Raul Avila told the Washington Post that 600 new plants would be built there in 1995, a 30 percent increase in just one year.

Conventional wisdom holds that NAFTA's dismal record is a function of Mexico's monetary collapse and not any inherent problem with the agreement. This is nonsense. As Herbert points out in his Times commentary, "the value of the peso relative to the dollar had already declined by nearly 15 percent" before the December crisis. "That wiped out any advantage the U.S. would have realized from NAFTA's lower tariffs. The average tariff decline was just 10 percent. In other words, the 'market access advantage' had vanished before the peso crash."

The peso's radical devaluation may have sent a wave of panic through investment banking circles, but it was good news for the operators of maquila plants, who saw their labor costs, including benefits, shrink from $2.54 an hour to $1.80. A June 1995 study by the Ciemex-WEFA consulting group estimated that it will be sometime in the next century before workers make it back to their 1994 wage levels. Presently the millions who live in the shadow of the border plants exist in a state of peonage that makes older versions of slavery look positively beneficent, squatting on poisoned ground in jerry-rigged plywood and tarpaper shacks. The transnationals are doing their part to keep it that way by engaging in terror campaigns against would-be union organizers at the maquila plants.

The environmental picture is just as sordid. The plants produce 164 tons of hazardous waste every day; according to figures cited by Public Citizen, 90 tons are disposed of in the U.S., 30 in Mexico, and 44 are altogether unaccounted for. Most of it goes into the streams, air, ground, and ultimately the people. In the border area around Brownsville and Matamoros, there have been dozens of cases of anencephaly in recent years: babies born with an exposed brain or no brain at all. The Nogales region features the highest incidence of lupus in the world. Clusters of cancer, birth defects, and immunological disorders are commonplace all along the border.

And the population there is surging, thanks in large part to NAFTA's agricultural provisions. The terms of the agreement forced the revocation of land reforms dating to the Mexican Revolution and allowed multinationals to begin buying up vast tracts in the interior, pushing untold thousands of peasant farmers off the land and into the labor pool of the maquilas. (It was this portion of NAFTA, more than any other, that helped to precipitate the Chiapas uprising--a lingering problem that has disappeared from the headlines but continues to occupy the best minds of the Mexican government. Lately they have taken to consulting officers of the Guatemalan army, which has disappeared something over 100,000 Guatemalans in the past 15 years, about this vexing aspect of modernization.)

A nice little racket. NAFTA of course did not create the maquilas, but it underwrote their unparalleled expansion; they are the crowning symbol of a free trade system based on ensuring the prerogatives of capital against the intrusions of governments, unions, and environmentalists. What the example of the maquilas portends for Mexico's development as an export market and for Americans still making $10 or $15 an hour at manufacturing jobs is obvious enough to anyone who is not paid to obfuscate the issue. Now it's being borne out by the numbers. Small wonder the only rising tide most American wage earners feel in NAFTA's wake is one of dread.

THIS WEEK'S ISSUE marks the first installment of Alexander Cockburn and Jeffrey St. Clair's environmental column, Nature and Politics, which will originate in City Pages and be distributed to other alternatives across the country. Let us know what you think.

 
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