10. The Broken Promises Of NAFTA

SOURCES: COVERT/ACTION QUARTERLY, Fall 1995, "NAFTA's Corporate Con Artists"; Author: Sarah Anderson and Kristyne Peter; MOTHER JONES, January/February 1995, "A Giant Spraying Sound"; Author: Esther Schrader

SYNOPSIS: The promises of prosperity that the North American Free Trade Agreement (NAFTA) would bring the USA and Mexico were most loudly proclaimed by USA*NAFTA, a pro-NAFTA business coalition. The USA*NAFTA coalition promised that the free trade pact would be all things to all people. It would improve the environment, reduce illegal immigration by raising Mexican wages, deter international drug trafficking, and most importantly, create a net increase in high-paying U.S. jobs.

Now, some two years after the agreement became law, USA*NAFTA's own members are blatantly breaking the coalition's grand promises. Many of the firms -- that only a short time ago were extolling the benefits of NAFTA for US workers and communities -- have cut jobs, moved plants to Mexico, or continued to violate labor rights and environmental regulations in Mexico.

An analysis by the Institute for Policy Studies revealed how the original promises are being broken in Mexico: while the standard of living may be better for the wealthy, there's been a 30 percent increase in the number of Mexicans emigrating to the US; the peso devaluation of December 1994 cut the value of their wages by as much as 40 percent (making them far less able to buy US goods today than they were before NAFTA); interest rates on credit cards climbed above 100%; retail sales in Mexico's three largest cities have dropped by nearly 25%.

The continuing economic crisis in Mexico is expected to cause the loss of two million jobs in 1995, and economic desperation is blamed for the 30 percent increase in arrests by US border patrols between January and May 1995.

NAFTA's promises to US workers also have been broken: the Department of Labor's NAFTA Transitional Adjustment Assistance program reported that 35,000 US workers qualified for retraining between January 1, 1994, and July 10, 1995, because of jobs lost to NAFTA. A University of Maryland study estimates that more than 150,000 US jobs were cut in 1994 as a result of increased consumer imports from Mexico. And since the peso devaluation in December 1994, the US trade surplus with Mexico has turned into a deficit expanding from $885 million in May 1994 to $6.9 billion a year later, wiping out any basis for claiming that NAFTA is a net job creator for US workers.

And, finally, an investigative piece by Mother Jones revealed that the environmental impact of NAFTA has been as severe as the economic impact. While government officials promised that NAFTA would reduce the level of pesticides coating Mexico's fields, this hasn't occurred.

The competition that NAFTA has set off between growers may actually increase the amount of pesticides used on Mexican crops. In fact, since NAFTA, Mexican growers are spraying more toxic pesticides on fruits, vegetables, and workers. Responsibility for pesticide use lies not only with Mexican growers but also with their US agribusiness partners. The Mother Jones investigation also revealed that these companies, which supply capital to more than 40 percent of large-scale agribusiness in Mexico, distribute produce that has been sprayed with pesticides not permitted for use in the United States.

COMMENTS: Sarah Anderson, coauthor of the CovertAction Quarterly article with Kristyne Peter, notes the general theme of the article is "the hypocrisy of pro-NAFTA US corporations which, less than two years into the agreement, are already confirming the fears of NAFTA critics. It looks at the broader range of NAFTA's impact, and attempts to raise awareness of the links between workers and communities on both sides of the border. The worse things get in Mexico, the worse things will get in the United States, but the mainstream media seem to have missed that point.

"The general public could benefit from an increased awareness of how free trade leads to downward pressure on labor and environmental conditions on both sides of the border. If US citizens begin to see their fates as being linked to those of workers in Mexico and other low-wage countries, they will begin to redirect their frustrations away from Mexican workers and immigrants and toward the real culprits-the corporations that are pitting workers and communities against each other in a race to the bottom. I also hope that this article will help increase the already growing concern about the excessive influence of corporations over our political system. The vast majority of people who worked in opposition to NAFTA came away from that battle convinced that the first step towards achieving more socially responsible economic and trade policies is to get money out of politics.

"Clearly, it is the corporate con artists who are benefiting from the lack of media coverage of this issue. While the leaders of these corporations were eager to appear in the media before the vote on NAFTA to promote what they claimed would be its numerous benefits for the US public, they are now noticeably absent from the limelight.

"Pat Buchanan, as the only presidential candidate talking about free trade, has become the most prominent NAFTA critic. Unfortunately, Buchanan's racist views leave the impression that anyone who is opposed to the agreement is also a nationalist and a protectionist. The mainstream media have reinforced the false impression that the debate on trade has only two sides (free trade vs. protectionist). There are many who believe that trade can be beneficial, but want to ensure that these benefits are reaped by the greater public, not just the corporate CEOs. Buchanan's virtual monopoly of the trade issue makes it imperative that those who promote an internationalist approach to trade policy try even harder to get this view into the mainstream media."

Esther Schrader, author of the Mother Jones article, said she was not surprised the subject of her article-the investigation into Mexican worker deaths associated with pesticides-was not undertaken by anyone else. However, she was disturbed the subject did not surface in major media during the NAFTA debate, where concern over pesticides was limited to fears about their effect on U.S. consumers eating fruit and vegetables. Never in the NAFTA debate did the frightening effect of pesticides on Mexican workers in the field receive major media coverage.

Schrader notes, "In the most callous sense, US residents are not at all affected by improving conditions for Mexican workers. But if the tremendous harms suffered by Mexican workers in the fields every day were taken up by the mass media, the US government might feel compelled to exert pressure on its Mexican counterparts to enforce their own laws. With the establishment last year of the NAFTA environmental commission, Mexican officials can now be censured for their failure to adhere to their own laws. All that is lacking is desire on the part of US officials.

"Of course Mexican agribusiness and the Mexican government, both interested in increasing exports to the US, benefit from the limited coverage given the abuse of pesticides on Mexican farms. But powerful US agribusiness would also be harmed by closer attention to this subject, since US growers are the powerful owners of many Mexican agribusiness operations."

Schrader concludes, "It is a shame that the environmental commission set up under NAFTA does not take up this issue and other similar abuses. Until Americans are dying, I doubt they will."

The revelations concerning NAFTA's broken promises cited in the original source articles by Covert/Action Quarterly and Mother Jones were confirmed January 12, 1996, when the Washington Post reported that, "During 1995, the Mexican economy shrank by six percent and lost more than one million jobs as it sank into its deepest recession in 60 years. The value of the peso dropped nearly 60 percent, the annual inflation rate exceeded 50 percent, tens of billions of dollars in capital fled the country, and Mexicans complained of a rise in violent crime." Further, the Post added, "As a result, illegal border crossings rose substantially last year. Across the entire 2,2,000 mile border, apprehensions were up 92 percent from a year earlier, INS officials said."