What they won’t say about NAFTA

March 14, 2008

Hillary Clinton's and Barack Obama's criticisms of NAFTA make it seem like the U.S. is the biggest loser. Adam Turl sets the record straight.

HILLARY CLINTON and Barack Obama are waging rhetorical war on the North American Free Trade Agreement (NAFTA)--the free trade deal shepherded through Congress and signed into law by Bill Clinton in 1993.

While NAFTA was initially sold as a way to create new jobs in the U.S. and Canada and help Mexico modernize its economy (thereby preventing undocumented immigration to the U.S.), in truth, the agreement lowered wages in the U.S. and opened up Mexico's economy to restructuring for the benefit of U.S. companies--at the expense of ordinary people in Mexico.

In the lead-up to the critical March 4 primary vote in Ohio, Clinton and Obama tried to outdo each other to reflect workers' frustrations with NAFTA.

Obama told a group of unionists that he refused "to accept that we have to stand idly by while workers watch their jobs get shipped overseas." Hillary Clinton declared, "If you travel through Youngstown, and you travel through communities in my home state of Illinois, you will see entire cities that have been devastated as a consequence of trade agreements."

Behind this appeal for votes, however, the truth is that neither Clinton nor Obama are opponents of free trade. Both recently voted for a recent trade agreement with Peru.

The mismatch between rhetoric and reality probably contributed to Obama's defeat in Ohio after a Canadian government memo leaked to the press reported that economic adviser Austan Goolsbee met with Canadian government officials to assure them that the campaign's anti-NAFTA rhetoric "should be viewed as more political positioning than a clear articulation of policy plans."

Actually, this memo is a good summary of the real position of both candidates. The attacks on NAFTA are about winning votes in the primaries. When the "policy plans" of a President Obama or Clinton do get "articulated," there won't be much that will benefit Ohio workers, and certainly no repeal of NAFTA.

JUST AS important in the debate about NAFTA is what isn't being talked about.

For one thing, the candidates have less to say about other attacks on U.S. workers unrelated to the trade deal.

NAFTA has had a clear impact on manufacturing jobs, especially in Midwestern states--for example, the Economic Policy Institute estimates that the agreement cost Ohio 50,000 jobs between 1993 and 2004. But in just the last seven years, Ohio lost more than 200,000 manufacturing jobs--as a consequence of plants moving to the U.S. South, the shallowness of the 2000s economic recovery and increasing productivity, among other factors.

What's even worse about the Democrats' targeting of NAFTA, however, is the fact that neither Obama nor Clinton will utter a word about the trade deal's impact on Mexican workers. If workers in Ohio and elsewhere in the U.S. have been squeezed, Mexico has been hammered.

On January 31, tens of thousands of Mexican peasants and workers marched in Mexico City to demand the repeal or renegotiation of NAFTA, under the slogan, "without corn, there is no country."

This was a response to the elimination at the end of last year of Mexico's tariffs on corn, beans, sugar and powdered milk--the final stage of reductions in Mexican controls on agriculture imports, as required under NAFTA. Since December, white corn imports from the U.S. into Mexico have increased 384 percent.

Mexican agriculture has been devastated by NAFTA because it is unable to compete with U.S. producers, which benefit from subsidies from the U.S. government that were 20 times higher than Mexico's as of 2005.

The Agriculture Commission of Mexico's House of Deputies described the rural situation as "disastrous," with government financing of agriculture falling 90 percent and education and technical assistance programs for farmers cancelled under the NAFTA regime. Citing a drop in the percentage of the population engaged in agriculture from 26.8 percent in 1991 to 16.4 percent in 2004, the commission accused the Mexican government of "dismantling" agriculture.

In a few years, Mexico went from being largely self-sufficient in foodstuffs to relying on U.S. imports. In addition to the increased competition from the U.S., NAFTA required the dismantling of historic concessions to Mexico's peasants, such as the gutting of Article 27 of the constitution, which guaranteed communal farming lands.

As left-wing author Dan LaBotz wrote, the recent protests represent "what may be the final conflict between Mexico's peasants and their government, the last symbolic stand of a social class now withering away."

Under NAFTA, 3 million farmers migrated to Mexico's cities or to the U.S. in search of work. Not all of the peasants who left the countryside can be absorbed into the urban workforce, so going north to the U.S. becomes the escape valve for the social pressures of NAFTA. The Mexican government estimates that half a million people crossed the border into the U.S. in 2007 alone (with at least 562 losing their lives).

NAFTA HAS been responsible for a rural crisis and what can only be called the liquidation of a peasant class that once made up a majority of Mexico's population. But the agreement has also been a disaster for Mexican workers.

Bill Clinton and former Mexican President Carlos Salinas promised that NAFTA would propel Mexico into the ranks of advanced industrial nations. Instead, Mexico's economic growth has been mediocre--far lower than Latin American countries that have opted for a more independent relationship to the global market.

While trade with the U.S. has increased, Mexico has run an overall deficit of $8.3 billion a year. Some 3 million Mexican workers are tied to nearly 1,000 maquiladora plants that produce specifically for the export market. But these plants have made Mexico's trade deficit worse because they rely on foreign inputs.

On everything from oil contracts to the rural economy to the wages of the urban working class, NAFTA reoriented the Mexican economy to fit the interests of corporations based largely in the U.S. The value of the minimum wage in Mexico has dropped 23 percent, and the World Bank estimates that 48 million people--nearly half the population--live in poverty.

At the beginning of the current President Felipe Calderón's term, the cost of tortillas rose by 30 percent, sparking protests across Mexico. The attorney general for consumer protection reported that the price of a shopping basket of staples rose 35 percent during the Calderón's first year.

To maintain this savage inequality, it has been necessary for Mexico's ruling class to beat back labor and the left in Mexico--with U.S. help.

Like their counterparts in the U.S., Mexican unions have begun to show a decline in membership. Activists estimate that 80 to 90 percent of labor contracts are "protection contracts," designed to prevent genuine unions from taking root.

In recent months, there has been increased harassment of communities in Chiapas aligned with the Zapatista rebels, and over the past two years, the government has used the army and federal police against miners and steelworkers.

And the U.S. government is setting the stage for more repression. In October, George Bush requested $500 million as part of the Mérida Initiative, or "Plan Mexico": a $1.4 billion initiative to provide police equipment, training, helicopters and surveillance to the Mexican government. Like Plan Colombia, Plan Mexico is sold as an anti-drug program, but it will be used against workers and left-wing movements.

To hear Hillary Clinton or Barack Obama tell it, NAFTA needs to be renegotiated so that Mexico and Canada don't get away with unfair advantages against the U.S. But the record shows that Mexican farmers and workers haven't benefited from lost jobs in the U.S. On the contrary, they are worse off today than before NAFTA.

Mexico did not force the U.S. into NAFTA--it was the other way around. The biggest beneficiaries of all have been the owners of U.S. corporations.

By omitting the suffering of Mexican workers from their rhetoric, Clinton and Obama are omitting any analysis of the real villains of NAFTA--U.S. corporations and the U.S. government.

Further Reading

From the archives