Organizing Labor in Opposition to Elite Interests

The Clinton administration has been handed for its approval two dangerous agreements: the North American Free Trade Agreement and The Uruguay Round General Agreement on Tariffs and Trade. The NAFTA and GATT agreements will impede the raising of living, protective and environmental standards for the majority of the people in the US, Mexico and Canada, and will curtail our local rights to decide policy by threatening existing federal, state and local laws as technical barriers to trade. The Government of Mexico and several US business organizations are mounting a $100 million campaign to press for congressional ratification of NAFTA; many labor and other organizations across the country are urging that these agreements not be approved.

The publicly proclaimed argument for the ratification of NAFTA and GATT is that they will “jump start” the economy (just as an aside, since everyone keeps using that phrase, doesn’t the need to jump start something most often indicate a basic problem with the innards of the engine?). Bush administration claims that liberalizing trade rules will produce phenomenal growth are inaccurate, however. Global economic integration has witnessed more internationally synchronized business cycles which undercut foreign markets’ abilities to absorb US exports during downturns. The narrow focus of the agreements is not suited to overcoming two decades of long-term structural economic stagnation. Such agreements serve only the needs of selected transnational corporations and business concerns, and do not include components to raise incomes or standards, or expand domestic markets of the counties of the “South”. As such the agreements are oriented toward the demand side and will probably deepen global economic stagnation. These agreements cater to the needs of the corporations — focusing on cost-cutting flexibility in the interests of the firm — while ignoring the needs and rights of workers.

As it exists, NAFTA benefits the economic elite in the three countries: the agreement is thus harmful to most of the citizens of those countries. Since the driving principle behind it is to facilitate corporate exploitation of cheap labor in Mexico (and according to GATT, other areas of Latin America in future), it would accelerate deindustrialization of Canada and the US, cause severe levels of net job loss in those countries and exert strong downward pressure on wages in manufacturing and some service sectors. The Economic Policy Institute projects the loss of 500,000 high wage jobs in the US in the next ten years; a University of Massachusetts study projects 440,00 jobs lost by 2000. 500,000 US jobs have already been fast-tracked to maquiladora plants, not particularly surprising, since compensation costs for US manufacturing jobs averaged $15.45 hourly in 1991, seven times the $2.17 average in Mexico. The US- owned maquiladora plants pay an average of only $1.25 an hour. In a recent poll of 455 Wall Street executives, 25% openly admitted that they will likely use NAFTA to bargain down wages. Mexico would also experience a net job loss, downward pressure on wages, and thus increased emigration pressure. The agreement serves to extend the extreme exploitation of workers in the maquiladora plants throughout Mexico. Mexicans will be displaced from subsistence farming and smaller (currently protected) industries, but only a small portion of these displaced workers will be absorbed by the jobs created through NAFTA. The effect in all three countries, then, is to allow the loss of those jobs about which the governments do not particularly care (such as small farmers, most especially in the US producers of fruits and vegetables, dairy products, sugar, beef, and peanuts) in order to realize a much smaller gain in the sort of employment that the economic elite prefer.

NAFTA does nothing (nor does the “parallel track” Integrated Border Environmental Plan do very much) to clean up the existing massive pollution situation on the northern Mexican border, caused by the maquiladora plants, a situation producing severe health effects on each side of that border. It provides no effective means and no funding to protect against Mexico’s becoming a “pollution haven” for transnational corporations (which to a great extent it already is). It does not address Mexico’s foreign debt burden, which after all stimulates environmental dumping and the flight of Mexican workers to the US.

Under the agreement, countries are allowed to lower environmental standards in order to attract new investment. Laws regulating hazardous wastes, auto emissions, endangered species, pesticides and food labeling could all conceivably be considered trade barriers, and thus weakened or eliminated through challenges by any of the three countries signatory to the agreement. Since NAFTA allows countries to set standards that limit trade only if the effect of the laws does not extend beyond national boundaries, laws that could be designated as violations of NAFTA include the Endangered Species Act, the bans on the importing of whale and ivory products, the Clean Air Act, the prohibition on importing of products with ozone-depleting substances, and the Marine Mammal Protection Act of 1972 (which prohibits the importing of tuna caught in such a manner that large numbers of dolphins are killed).

Mexican trucks driving into the US, under the agreement, will have full access to US roads but will have three years to meet US standards on emissions, pollution, inspection, maintenance repair, brakes and securing of cargo. Drivers will have three years to meet motor carriers’ safety compliance standards. For railroads there is a six-year phase-in period for compatibility of regulations concerning transportation of dangerous goods.

NAFTA’s food standards are those of the Codex Alimentarius, a Rome- based UN subgroup whose standard-setting process has involved numerous food, chemical and agribusiness countries. Codex allows chemicals long since banned in the US, such as DDT on grains, meat and dairy products, and heptachlor on fruits and vegetables.

In these instances the connection to the new GATT is significant. Since NAFTA repeatedly affirms its subservience to GATT (which trade agreement involves 108 nations) and since the proposed revisions to GATT would empower it to dictate world trade policy and to order the elimination of any national, state or local law which threatens the commercial interests of any GATT member country, any environmental or consumer law which is stronger than the international least common denominator could be ordered eliminated or severely weakened by GATT.

Clinton, on October 4, 1992, outlined his approach to NAFTA; he identified problems with the agreement but proposed to leave the Bush text intact rather than to renegotiate it, and proposed five “unilateral steps” the US needs to take, and three “supplementary agreements.” The “unilateral steps” are:

1. “trade adjustment assistance that includes training, health care benefits and income supports, and assistance to communities to create jobs.” In principle this sounds rather like the EPA Superfund idea. Corporations will be allowed to abandon cities and lay off workers as they rush off after higher profits, and then tax money will be used to retrain the affected workers, offset the loss in wages, and provide health care. Leaving aside the predictable inefficacy of such a program, the bottom line is that corporations are not expected to bear the burden of paying to clean up after themselves either environmentally or economically.

2. “environmental clean-up and infrastructure investments in our country…” One is struck by the different levels of specificity reflected in NAFTA and in Clinton’s response to it. In any case, refer to #1 above.

3. Assistance to farmers who are threatened including “strict application of American pesticide requirements to imported food… help some growers shift to alternative crops… transition assistance” similar to that for displaced workers.

4. Congressional legislation to provide “public participation in crafting our position… and to give citizens the right to challenge objectionable environmental practices by the Mexicans or the Canadians.” As discussed above, the US is considering ratifying an agreement under which it effectively abnegates the right to establish environmental or safety controls more stringent than those of the other signatory countries. Where exactly is the logic in signing an agreement in order to immediately violate it? Of course, maybe the US government doesn’t really intend to violate it, and we will be told that we can’t fulfill “unilateral steps” #3 and #4 after all. Oops.

5. Provisions concerning foreign workers, e.g., to keep out strike breakers and to enforce trucking safety standards. Regarding the former, cf. Adam Katz’s piece in this issue. Regarding the latter, see numbers 3 and 4 above.

Clinton’s three proposed supplementary agreements are equally questionable, although the biggest question is the most obvious. If an agreement is not acceptable except in the event that it is followed by three supplementary agreements, doesn’t that seem, logically, to suggest rewriting the agreement in question before ratifying it? In any case, the “supplementary agreements” follow.

1. “establish an environmental protection commission with substantial powers and resources to prevent and clean up water pollution… encourage the enforcement of countries’ own laws… and provide a forum for complaints.”

2. “a second commission… for worker standards and safety [with] extensive powers to educate, train, develop minimum standards and have similar dispute resolution powers and remedies…”

“Perhaps the toughest issue of all is how to obtain better enforcement of laws already on the books on the environment and worker standards. It’s interesting that the agreement negotiated by the Bush team goes a long way to do this in protecting intellectual property rights and the right to invest in Mexico, but is silent with respect to labor laws and the environment .”

3. An escape provision in case there is an “unexpected and overwhelming surge in imports… which would dislocate a whole sector of the economy” in an unremediable way.

Again, the logic of ratifying an agreement with which Clinton finds so many problems is questionable at best, and one wonders what pressure there would be on other nations to negotiate the proposed “supplementary agreements” after NAFTA has already been ratified.

Some of Clinton’s proposals simply contradict the existing agreement: for example it makes little sense to call for “public participation” in light of NAFTA’s secret trade dispute resolution panels. Clinton’s proposals leave unmentioned many of the problematic aspects of NAFTA, for course. In addition to those indicated above, no environmental impact assessment has been done for NAFTA, as required by law. Energy conservation, renewable energy technologies and natural resource conservation are undermined by the agreement. And just as an afterthought, immigrant rights are not addressed; indeed democratic and human rights in Mexico are not addressed, and should be preconditions to any such agreement.

The process by which the agreement was drafted was undemocratic at best. It was forced through as an element of the reelection campaign, and is so skewed toward the interests of certain transnational corporations that it is more properly called a transnational corporate rights agreement (it has little or nothing to do with free trade).

Since there are those of us locally and nationally who rather dislike the idea of mortgaging jobs and the environment in the name of corporate greed and slave wages, petitions are being circulated to urge members of congress to oppose the trickle- down NAFTA and GATT agreements. Those who oppose these misnamed “free trade” agreements which guarantee corporate profits by eliminating jobs, lowering wages and destroying the environment, are urged to sign the petition at the very least, and to help organize the opposition effort at the very most (we could use your help!). Petitions are available in the AO office (126 Schine). For more information contact the Fair Trade campaign of Central New York (463-4591), Mark Rupert (476-8590) or, I guess, me through the AO.

[The following were used as source materials in this article. Indeed, at times the very sentences were plagiarized shamelessly. It is hoped that the authors of the cited materials will endorse this stealing of their ideas both in the interest of solidarity and in a very real and legally binding sense. Which is to say, lawsuits are overrated: Robert Lehman, “Why NAFTA Needs to be Renegotiated” (unpublished, San Francisco, 11-23-92); “North American Free Trade Negotiations” from The Jobs Debate: Fiction & Reality (AFL-CIO, #21, 1992), from which piece come the allusions to Jeff Faux and William Sprigs, “U.S. Jobs and the Mexico Trade Proposal”, Economic Policy Institute briefing paper, 1991, and Timothy Koechlin, Mehrene Larudee, Samuel Bowles, and Gerald Epstein, “Effects of the North American Free Trade Agreement on Investment, Employment and Wages in Mexico and the U.S.”, University of Massachusetts (1992); “STOP NAFTA” leaflet from the Public Citizen, Washington, DC; and leaflets from the Minnesota Free Trade Coalition, Saint Paul. Thanks to Karen Peissinger for actually getting all those documents to me so I could plagiarize]

♦ ♦ ♦