BE WARY of the much-ballyhooed trade accord reached last week by the United States, Mexico and Canada. The North American Free Trade Act (NAFTA), which still needs approval by the legislatures of the three nations, does not include proper safeguards for workers or incentives for American manufacturers to remain in the U.S.
Even Democratic presidential nominee Bill Clinton, originally a supporter of NAFTA, is now expressing doubts about the agreement's protection of jobs and the environment.
According to Business Week, the maquiladoras (U.S. runaway businesses) in Mexico now amount to over 2,000 manufacturing and assembly plants, providing Mexicans with almost 500,000 jobs. These U.S.-owned plants pay average wages of $1 an hour.
The Ford Motor Co. has a plant in Hermosillo, Mexico. The International Motor Vehicle Program at Massachusetts Institute of Technology has concluded that the production quality at this Ford Mexican plant is better than at any other factory except Mercedes-Benz in Germany. Every car is produced for export. An assembly worker starts at $1.35 per hour (high for Mexico), while the same job pays a United Auto Workers union member $16 an hour in Michigan.
How can workers in American factories fail to lose their jobs or their entitlements, acquired after decades of labor struggles? This is not a level playing field.
Example: On July 27 , Smith-Corona, the last U.S. typewriter manufacturer, announced it would move its plant from Cortland, N.Y., to Mexico. Manufacturers can move their capital across the Rio Grande to Mexico easily, but what about workers? They may be "free" to move, but would they want to work in a maquiladora? U.S. corporations are allowed to send in material made in the U.S., assemble the material and import the finished product back to the U.S. without paying duty except the value of the labor.
Canada, the other partner in NAFTA, has concluded an agreement with the U.S. which by 1999 will virtually eliminate all trade barriers between the two nations. The Canadian government says 403,000 manufacturing jobs have been lost since Jan. 1, 1989, and only 185,000 lower-paying service jobs have been added since the agreement came into effect. As of June 1992, unemployment has risen to 11.6 percent. Only 6 percent of Canadians believe that Canada has won any benefits from the accord with the U.S.
Example: Burlington Industries (a U.S.-owned multinational company) had an integrated carpet mill in Canada that had become unionized. Workers were making about $10 an hour. After the accord with the U.S. was signed, Burlington decided to close the Canadian plant and make carpeting in the nonunionized U.S. South for export to Canada. Now Burlington is preparing to set up a carpet mill in Mexico, which will be able to export to both the U.S. and Canada.
While wages in some industries in Mexico have risen from as low as 50 cents an hour to as high as $1.65, pressure is on these workers not to push for higher wages. U.S. firms are now setting up plants in Honduras and Guatemala, where wages are even lower. Thus the drive for lower and lower wages is almost bound to affect the situation of U.S. and Canadian workers. The upward spiral of unemployment in both countries is the clearest evidence of this.
What is bound to happen to these two industrialized countries? In order for workers to compete, they will be forced into giveaways on entitlements (Social Security, Medicare, unemployment benefits, health care benefits.) This is what the "new depression" is all about. It is not a recession. What the corporations are depressing is their costs -- through restructuring/downsizing (cutting jobs, wages, benefits -- or moving to a Third-World country). In the process, communities like Cortland are destroyed. Formerly self-sufficient breadwinners are demoralized, lack of medical benefits damages human health and psychological depression contributes to the drug problem. How can a family maintain "family values" in such circumstances?
Finally, cutbacks in environmental protection may mean benefits for the manufacturer in the short term. But in the long term, for all of us, they mean destruction of the ultimate source of our health and livelihood: the Earth.
It must be remembered that the dream of NAFTA is driven by the fear of being shut out of the vast European Community (EC) now coming into being. However, EC nations are well-industrialized countries that are paying somewhat equivalent wages. The difference in wage scales between the U.S. and Mexico runs at least 10-to-1.
EC countries are working to standardize environmental regulations. And they all have low population growth. During the last decade alone, Mexico's population has increased an additional 20 million.
The EC also has adopted a flexible immigration system. At the request of the United States, the problem of undocumented Mexican workers illegally migrating to the U.S. has been left out of the new agreement. These factors have been completely ignored by NAFTA. Why should they not be included?
We should be resisting the signing of this agreement.
Marjorie Hope and James Young are free-lance writers. Their latest book is "The Faces of Homelessness."