NAFTA and the elite

Bob Herbert

November 11, 1993|By Bob Herbert

THE intellectual and political elite have lined up in support of the North American Free Trade Agreement, but it's the grunts, the ordinary working men and women of America, who will face the consequences in the form of wage contraction, lost jobs and reduced standards of health and safety.

It's too bad Ross Perot is the leading opponent of NAFTA. Working people deserve better. When Mr. Perot starts waving his arms, tossing out misleading data and shrieking about "that giant sucking sound," his noise drowns out the serious discussion of the problems with NAFTA.

American workers have been hammered for a decade and a half and they're scared. Now comes the Clinton administration -- which claims it stands for change -- and it decides to go to the mat politically for a trade agreement that is the delight of Republicans in Congress and the multinational corporations.

Why wouldn't workers be wary? These are the same corporations that have made downsizing their mantra, thereby terrorizing millions of employees and their families. It's clear what the corporations want, and NAFTA helps them get it: an expanded market, cheaper labor and less restrictive health and safety standards.

The catastrophic scenarios offered by Mr. Perot and others are not in the cards. NAFTA is a relatively modest trade agreement. But U.S. companies and jobs are already going to Mexico, and common sense suggests that this would only increase under NAFTA.

In a letter to President Clinton this week, Ralph Nader, who opposes NAFTA, said, "It is known inside your circle of White House and corporate allies that companies are pursuing an informal moratorium on announced relocations of factories to Mexico until after the NAFTA vote in Congress."

Mr. Nader said a similar moratorium had been observed by companies operating plants in Canada before a decisive vote on the Canada-U.S. Free Trade Agreement in 1988. For a variety of reasons it was cheaper, under that trade agreement, for the companies to operate the plants in the U.S.

Mr. Nader said approval of the agreement had been followed "by a rush of shutdowns and relocations." He and others, especially labor officials, have noted that just the threat of a move to Mexico by a U.S. company can have a dampening effect on wages here. A smaller paycheck looks better than no paycheck at all.

Meanwhile, an important issue that is not getting enough attention is the danger that free-trade agreements will begin to erode some of the high health and safety standards developed over several decades in the United States.

As Vice President Gore noted in the debate Tuesday, NAFTA is just a warmup for the much broader revised General Agreement on Tariffs and Trade, a global effort to reduce trade barriers. Final GATT negotiations are scheduled for completion in Geneva next month.

As the competition grows increasingly intense in the global marketplace, the traditionally higher standards of health and safety in the U.S., which add substantially to the cost of doing business, can be viewed as a handicap.

And under international agreements like NAFTA and GATT, other countries can (and will) complain that certain U.S. standards amount to barriers to free trade. Mr. Nader cites, as an example, auto safety standards. A foreign country that feels U.S. standards are too tough -- even though they apply to all cars sold in the U.S. -- could complain that it is being unfairly kept out of the U.S. market.

The mechanism for resolving such disputes is ominous. Under NAFTA and GATT, international tribunals composed of trade officials will convene in secret to study such disputes and to issue binding rulings.

If a safety standard in the U.S. were found to be an unfair trade barrier, the U.S. could either waive the standard or pay perpetual damages to the offended country for the loss of sales in the U.S.

"The new trade agreements are invading internal sovereignties, becoming involved in things that are none of their business," said Mr. Nader.

The elite may be sold on NAFTA, but it deserves much closer scrutiny by everyone else. As for the Clinton administration, it might find an easier route to free trade if it could only manage to do something real about jobs here at home.

Bob Herbert is a columnist for the New York Times.

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