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Title: North American Free Trade? Author: Jon Bekken Date: 1992 Language: en Topics: NAFTA, free trade, North America, Libertarian Labor Review Source: Retrieved on April 16, 2005 from https://web.archive.org/web/20050416235918/[[http://www.syndicalist.org/archives/llr1-13/13e.shtm][www.syndicalist.org]]l Notes: From Libertarian Labor Review #13, Summer 1992
As the U.S.-Canada-Mexico Free Trade Agreement talks continue on the
fast-track, the labor movement — and in particular its left wing — is
mobilizing its efforts in a last-ditch effort to block an agreement they
say will devastate the U.S. and Canadian economies. The Canadian Labor
Congress estimates that 260,000 jobs have already been lost as a result
of the U.S.-Canada Free Trade Agreement (though they clearly didn’t find
their way down to the States, as is evidenced by the continuing
recession), and the AFL- CIO expects that two and a half million jobs
would go to Mexico if the Free Trade Agreement goes through.
The government has been relatively open about the rationale for a Free
Trade Agreement: “By lowering overall costs of U.S. manufacturing firms,
a free trade agreement would make U.S. firms more competitive...” (1991
Economic Report of the President) This competitiveness might be realized
by moving production to Mexico or by driving U.S. wages closer to
Mexican levels. Either approach makes U.S. firms “more competitive”
entirely at the expense of their workers.
Mexican workers are clearly cheaper than their North American
counterparts, and getting cheaper all the time. High inflation and a
rapidly devaluing Peso have resulted in average Mexican labor costs
(wages and benefits) dropping from $3.71 in 1981 to $1.57 in 1987, and
the Mexican economy is in free-fall. The Mexican government tightly
controls the major labor federation, and forcefully intervenes against
militant unions and unionists.
The result has been a cheap, relatively disciplined (though not always
docile) workforce conveniently located to manufacture products for North
American markets. Many firms have moved their manufacturing operations
to Mexico, in particular to low-wage “maquiladora” districts near the
U.S. border. U.S.-based companies have long had extensive investments in
Mexico, dominating its auto, rubber, mining and chemical industries even
before the maquiladora program began in 1965. The maquiladoras
manufacture products almost entirely for U.S. and other foreign markets,
and are largely exempted from U.S. import duties. Last year, about
500,000 workers were employed in 2007 maquiladoras, almost all of them
owned by U.S. companies.
U.S.-based companies have proven eager to expand operations in Mexico
(just as in other low-wage economies). Two years ago, Levi- Strauss shut
down a San Antonio plant, throwing more than 1,000 workers out of their
jobs. Last year, Pillsbury-Green Giant laid off nearly 400 workers from
its frozen food plant in Watsonville, California, to shift their
unionized jobs to a non-union plant in Mexico which pays workers only $4
per day. Louisiana-Pacific has closed a California plant and built a
state-of-the-art sawmill in Suarez, where it has already successfully
broken the longshore union by shutting down production for several days
and threatening to close the plant altogether. And Procter-Silex (a
manufacturer of irons, coffee makers, and similar items) recently closed
two profitable North Carolina plants to shift production to Juarez.
Already, corporations are blackmailing workers and governments in towns,
states and entire countries — using their mobility (made possible by
improved communication and transportation networks, and by the
increasingly global economy) to pit us against our fellow workers around
the world. Each concession we make to save our jobs is then used as
leverage to force concessions somewhere else, and the cycle soon returns
to slash our wages and/or working conditions again. The record clearly
demonstrates that companies do not use their savings from concessions or
tax breaks to modernize, they take the money and run. As a result, what
happens to our $1-a-day Vietnamese fellow workers affects us as directly
as what happens to our fellow workers in Alabama.
(Environmentalists, too, oppose the Free Trade Agreement, arguing that
it will result in environmental safeguards being abandoned as
impediments to “competitiveness” or as illegal restraints on trade.
However, the U.S. has long attacked environmental standards on such
grounds, as in the recent decision to resume clear-cutting in public
forests in Oregon even though this will likely result in the extinction
of the spotted owl.)
As we noted in LLR 2 (“What’s To Protect?”), however, maintaining
existing trade barriers or building new ones is not an effective
response. The American economy died long ago, and had been replaced by a
global economy in which most products long ago ceased to have any
meaningful country of origin. The 1992 Ford Crown Victoria, for example,
is assembled in Canada using parts from Britain, Germany, Japan, Mexico,
Spain and the U.S., while Toyota Corollas are assembled by a jointly
owned GM-Toyota plant in California. Harvard economist Robert Reich
notes that “almost any product weighing more than 10 pounds and costing
more than $10 is a global composite, combining parts or services from
many different nations.”
As long as our present economic system continues, the bosses will shift
manufacturing — and, increasingly, even service industries — around the
world to wherever they make the most money. Governments that obstruct
this process will quickly be brought to heel through the enormous
economic pressures transnational capital can bring to bear.
We can’t hope to gain anything by supporting “our” bosses against the
other guys, whether across the border or across the sea. Free trade or
no free trade, the bosses will always go where the money’s best, where
unions are weak, where they can maim workers and pollute the environment
to their heart’s content. They won’t be stopped by legislation (the Free
Trade Agreement isn’t even drafted yet, but employers have been setting
up shop in Mexico for decades) or by patriotic sentiment.
But that doesn’t mean that they can’t be stopped. The flow of low-paid
jobs to South Korea is slowing and employers are fleeing their
increasingly militant Korean workers in search of new low- wage
production sites. Rather than trying to make common cause with our
exploiters against our fellow workers abroad, we would do far better to
assist our fellow workers in their struggles to build militant,
independent unions and to win better working and living conditions. As
long as workers anywhere are repressed and poverty- stricken, the bosses
will find a way to exploit their misery — and to spread that misery, as
best they can, to the rest of us. But if we are organized
internationally to fight for our own interests, we can put the bosses on
the run.