NAFTA's 7-Year Itch
It's been almost seven years since the North American Free Trade Agreement took effect. NAFTA now has a real life record. But the benefits promised by NAFTA's cheerleaders -- 200,000 new U.S. jobs per year, higher wages for Mexican workers, a growing U.S. trade surplus with Mexico, environmental clean-up and improved health along the border -- have failed to materialize.
"I don't see how it has helped hardly anyone," noted Rep. Bart Stupak, D-Mich, an opponent from the beginning. "All I've been doing since NAFTA is trying to repair the damage done. We've lost jobs, our trade deficit continues to soar higher than its ever been, drugs out of Mexico continue to be a problem, and food safety is a huge problem."
In addition to drugs like heroin and cocaine, stolen goods and even people are being smuggled into the U.S. at an alarming rate. "They're now using heat monitors as Mexican trucks cross the border, because there's so many people in them, packed around the strawberries or blueberries or even the frozen foods," said Stupak.
As the current administration continues to strengthen ties with China as Most Favored Nation, Stupak noted that international trade agreements such as NAFTA and GATT (General Agreement on Tariffs and Trade) serve only to help other countries, while hurting our own.
"There is no world economy without the U.S., so everyone wants access to our economy," he noted. "But some of us believe you should not have access until you can prove that you're fair to your people, you'll protect the environmental laws, respect our natural resources, and enforce the same standards that Americans expect when they go to the grocery store or the pharmacy. And they're not. There are no standards, and our government is very lax at enforcing them."
Threats to Our Food Safety
Our food safety was one of the biggest concerns when NAFTA was being debated. Opponents worried that the U.S. would be forced to import produce with higher pesticide residues than currently allowed; pesticides banned in the U.S., like DDT; and meat and dairy products with high levels of hormone residues, disease, bacteria, and fecal contamination. These concerns were dismissed with promises of improved practices in Mexico and better border inspections. But what has really happened?
According to the U.S. FDA, both the U.S. and Mexico now inspect far less imported food than they did prior to NAFTA. With 52 percent of all fruits and vegetables sold in the U.S. coming from Mexico, that's a serious problem. It might also be noted that beef labeled "U.S. Beef" is now allowed to have a high percentage of imported meat blended in.
And we're paying the price. In 1998, Minnesota health officials attributed a shigellosis outbreak in the Minneapolis-St. Paul area to parsley imported from Mexico. Shigellosis is caused by fecal contamination of food products and is contagious. In 1997, an outbreak of potentially-fatal Hepatitis A from frozen strawberries imported from Mexico sickened 270 people in five U.S. states.
With each new outbreak, some in Congress continued to push for the Imported Food Safety Act of 1999, which calls for labeling the foods so we know where they came from, as well as the ability to inspect imported foods in their country of origin, something not currently allowed.
"The only thing we're allowed to do right now is go down there and observe," said Stupak, one of the bills supporters. "You can't quarantine it, you can't stop it, you can't tag it for shipping, you can't do anything with it, because you're in another country. The only chance you have at stopping it is at the border."
Which would be great except that only one percent of imported foods are inspected at the border, noted Stupak. "Ninety-nine percent are going through uninspected."
More Jobs for U.S. Workers? Not!
NAFTA supporters promised hundreds of thousands of new, high-paying U.S. jobs. The reality? Over 200,000 U.S. workers had lost their jobs by 1997, and that's only those documented by the Trade Adjustment Assistance (TAA) program, established to help people who lost their jobs due to NAFTA. Many people are either ineligible or never learn of the program.
Many of the jobs destroyed or exported to Mexico or Canada are in high-paying sectors like the automobile, electronics, and manufacturing industries. In 1997, the U.S. Department of Labor projected that U.S. professions with the greatest expected future growth were cashiers, waiters and waitresses, janitors and retail clerks.
In February 1997, Public Citizen's Global Trade Watch conducted an investigation of companies that specifically promised to create jobs if NAFTA was enacted in 1993. Of the 67 companies studied, 60 had not created jobs or even increased their exports to Mexico. Rather, many of these companies were documented by the government to have laid off U.S. workers due to NAFTA.
Why? Simple math. NAFTA puts American workers earning $18/hour in direct competition with Mexican workers who work for $1/hour or less.
Here's just a few U.S. companies who succumbed to that "giant sucking sound" predicted by Ross Perot during the NAFTA debate:
Huffy Bicycles closed the world's largest bicycle plant, in Celina, Ohio, laid off 650 workers and shifted production to Mexico.
Bass Shoes laid off 350 employees and moved to Mexico after being located in Maine for 122 years.
Thomson Consumer Electronics, successor to RCA-Victor, moved what was once the world's largest TV factory located in Bloomington, Indiana -- the self-proclaimed "Color Television Capital of the World" -- to Mexico, laying off 1,200 workers. The Indiana Department of Workforce Development tracked the Thomson workers and discovered that only 8 percent found jobs that match or better their old pay.
Trade Deficits and U.S. Exports
NAFTA managed to transform the U.S. $1.7 billion trade surplus with Mexico in 1993 into a $14.7 billion deficit in 1998. Likewise, the 1998 U.S. trade deficit with NAFTA member Canada was $18.5 billion, meaning more jobs are being lost to Canadian imports than are created by exports to Canada.
According to a 1997 report by the International Trade Commission, many U.S. exports to Mexico never reach consumer markets. Rather, these exports are sent to U.S.-owned maquiladora plants along the border, assembled by low-wage workers, then quickly re-imported into the U.S. as finished products. This "industrial tourism" under NAFTA now constitutes a larger percentage of U.S. exports to Mexico than was the case at the beginning of the decade.
Farmers Can't Compete with $6/Day Wages
The "free market - free trade" farm policies of the 1990's have practically eviscerated U.S. wheat, winter fruit and vegetable, and tomato producers. As a result of NAFTA, U.S. producers are now forced to compete with multi-national corporations now operating in Mexico. Agribusiness -- not farm workers or consumers -- are benefitting from lower wages and less rigorous standards on pesticide residues, bacterial contamination and other potential public health threats.
Consequently, the number of small U.S. farmers has declined nine percent while the percentage of U.S. farm households at or near the federal poverty level has skyrocketed to 93 percent, so noted "The Fast Track Myth" in the July 16, 1998 issue of "Agri News."
Tomatoes are a good example. Under NAFTA, Mexican tomato imports have increased 63 percent, causing over 100 Florida tomato farmers to go out of business and 24 packing houses to close. According to the Bureau of Labor Statistics, the loss of tomato farmers cost Florida agriculture $1 billion between 1993 and 1998. The same is beginning to happen with California Brussels sprouts.
"It's simple math," said Steve Bontadelli, a third generation California brussels sprouts producer. "In Mexico, they pay workers $6 a day. That's what we're paying per hour. We just can't keep up."
Promised Clean-Ups Along the Border Never Happened
One of the big NAFTA debates was how it would affect pre-existing environmental and public health problems generated by all the export manufacturing plants in the free trade zone along the U.S.-Mexico border -- the "maquiladora" sector.
NAFTA proponents promised that it would relieve pressure on the border region by extending trade benefits to Mexico's interior, thus reducing the incentive for U.S. industrial firms to locate along the border. Since NAFTA, however, the maquiladora zone has undergone explosive growth, compounding pre-existing environmental and health problems. The latest count puts the number of border maquiladoras at 1,947, 37 percent more than in 1993.
The problem of illegal dumping of hazardous waste along the U.S.-Mexico border is well-documented. Among the 2,900 Mexican maquiladoras, only 751 had filed compliance manifests on the proper disposal of hazardous waste since 1991, according to a 1998 report by the EPA.
More than four years after its closure, 6,000 metric tons of lead remain at the Metales y Derivados site in Tijuana, Mexico, a plant owned and operated by the San Diego-based New Frontier Trading Corp. Despite the risk to local residents and efforts of local environmental groups, the Mexican government has failed even to begin clean-up.
Then there's the 25 million gallons of sewage being dumped daily a few miles from the shores of Imperial Beach, California, by the South Bay International Wastewater Treatment Plant in Tijuana. Toxic substances found in Tijuana's sewage system include dioxins and pesticides, including DDT, solvents, and heavy metals.
Compounding the potential health risks caused by exposure to these chemicals and the threat to marine life, the water where the dumping occurs contains currents which circulate back towards land.
Mexican Living Standards No Better
NAFTA was supposed to be a win-win proposition, making Mexico, in economic and social terms, more like the United States -- a more prosperous society with a middle-class. Yet Mexico's level of development has regressed under NAFTA: poverty is greater, the middle class is smaller, wages are lower, and maquiladora employment offering sub-living wage jobs and diminishing the quality of life along the border has burgeoned.
"I've been to Mexico since NAFTA, and we've spoken to human rights people and labor leaders," said Stupak. "Things have gotten worse, not better, for them under NAFTA. All those side agreements that were supposed to do wonderful things didn't work."
NAFTA was supposed to place Mexico on a new path, away from the low-paying, oppressive, pollution-choked border maquiladora zones and towards the sort of development necessary for sustainable growth. Just the opposite has happened.
The day NAFTA went into effect, maquila employment along the U.S.-Mexico border stood at 546,433. By April of 1998, that figure had risen to 983,272. The maquila sector is the top generator of employment in Mexico, yet wages in the manufacturing sector there are 16 percent lower than wages in Mexico's manufacturing sector as a whole.
And, by 1998, an estimated 28,000 small businesses in Mexico had been destroyed by competition with foreign multinationals and their Mexican partners.
Drugs and Stolen Goods
The U.S. Drug Enforcement Agency estimates that 70 percent of the cocaine smuggled into the U.S. comes across the U.S.-Mexico border. U.S. Customs estimates that 330 tons of cocaine are smuggled into the U.S. from Mexico annually. The Texas Commission on Alcohol and Drug Abuse reports that the increase in drugs, including heroin, has increased considerably since the NAFTA deal, because of the influx of Mexican trucks crossing the border.
One of the hottest exports in the U.S. -- stolen cars -- are also funneled through Mexico. According to U.S. Customs, of the 200,000 stolen cars shipped from U.S. ports annually, at least 10 percent of these are simply driven across the California border. This doesn't include those smuggled across the borders by rail or truck.