November 21, 2003

NAFTA: A Decade of Devastation for Workers, Poor

By David Bacon

As demonstrators fill Miami streets to protest the proposed Free Trade Area of the Americas, the upcoming 10-year anniversary of another free trade agreement sheds light on what the Americas can expect from Bush’s free trade plan. The North American Free Trade Agreement’s (NAFTA) decade of devastation, wreaked in Mexico and the United States both, will be the key argument in stopping its extension to the rest of Latin America.

Communities of working people and the poor on both sides of the border have paid the price for trade liberalization. Benefits have been reaped only by the tiny clique who promoted NAFTA in 1994.

Successive Secretaries of the U.S. Department of Labor — ironically among NAFTA’s most ardent supporters — have kept close track of the treaty’s high cost in U.S. jobs. By 2002, the department had certified that 408,000 workers qualified for extensions of unemployment benefits because their employers had 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 U.S. jobs between 1994 and 2000 because of the rapid growth in the net U.S. export deficit with Mexico and Canada.”

While the job picture for U.S. workers was grim, NAFTA’s impact on Mexican jobs was devastating. Before leaving office, President Carlos Salinas de Gortari promised Mexicans they would gain the jobs the United States lost. On U.S. tours to promote the treaty, he promised that this job gain, although painful for U.S. workers, would halt the northward flow of Mexican job seekers.

Instead, NAFTA’s first year saw the loss of over a million jobs all across Mexico, in the wake of economic crisis. To attract investment, NAFTA-related reforms required the privatization of factories, railroads, airlines and other large enterprises. This led to further huge waves of layoffs. And as economic desperation in Mexico has increased, immigration to the United States has become the only hope for survival for millions of Mexicans.

Toxic waste, Tijuana. Outside a closed battery recycling plant on Otay Mesa in Tijuana, Mexico, open pits of toxic waste pit the landscape, and chemicals leaching up from the ground form a crust on the ground. In the barrio of Chilpancingo, below the mesa, 19 children were born with no brains in 1993 and 1994, because of pollution from this and other maquiladoras on top of the mesa. Photo by David Bacon. (File Photo)

At first it seemed that the growth of maquiladora factories along the border would make up for at least part of the job loss. By 2001, over 1.3 million workers were employed in more than 2,000 border plants, according to the Maquiladora Industry Association. But tying the jobs of so many Mexicans to the U.S. market, for which the plants were producing, proved disastrous. When U.S. consumers stopped buying as recession hit in 2001, maquiladoras shed workers. The Mexican government estimates that over 400,000 jobs disappeared. The association and the Mexican government tried to blame the loss in border jobs on Chinese competition, but the plants simply produced far more goods than a recession-plagued market in the U.S. could absorb.

The most serious consequence of NAFTA has been its failure to protect the rights of workers. To attract investment to the maquiladoras, Mexican government authorities cooperated with investors and compliant official unions in maintaining a low-wage economy, reinforced with a system of labor 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. 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 (2.2 pounds) of rice. Another study by the Economics Faculty of the National Autonomous University in Mexico City found Mexican wages have lost 81 percent of their buying power in the last two decades.

Maquiladora workers are required to belong to unions that have no intention of raising those low wages or helping them end exhausting and dangerous working conditions. Throughout NAFTA’s 10-year history, a long labor war was waged from plant to plant along the border. Workers’ efforts to organize independent unions have been met with firings, plant closures and physical violence.

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 right-to-strike guarantees under Mexico’s constitution and Federal Labor Law.

NAFTA’s sponsors promised that the treaty’s labor side-agreements would protect workers. But 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, under NAFTA historical labor 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, government authorities defied their decisions with impunity.

Four years ago, at the height of the protests against the World Trade Organization, Zwelenzima Vavi, the head of the South African Congress of Trade Unions, described the alternative to NAFTA and the free trade philosophy underpinning it. “In the pursuit of profit,” he said, “governments are told to remove worker protections, and then use that as an inducement for investment. But development is a wider concept. It includes social development, and the living conditions of the people. Development can’t exist with mass unemployment and poverty.”

This is the message that critics of NAFTA and FTAA are bringing to the trade ministers in Miami.

Bacon ( is a writer and photographer with long experience in Latin America. His book, “The Children of NAFTA,” has just been released by the University of California Press.

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