Up for Grabs
[Mexico & 10 years of NAFTA]
by David Bacon
New Internationalist magazine,
The North American Free Trade Agreement
between the US, Canada and Mexico is 10 years old. President Bush
calls it a great success and vows to extend it to the rest of
Latin America. Bill Clinton before him promised that the rising
tide of cross-border trade would 'lift all boats', benefiting
The agreement certainly produced some
winners. Large corporations building factories south of the US/Mexico
border have been able to cut labour costs and increase profits.
Mexico created a new generation of billionaires during the treaty's
But the swell of profits and productivity
did not lift all boats. Instead, on both sides of the border,
communities of working people and the poor have paid dearly for
If anything, predictions of US job losses
were underestimated. By November 2002, the US Department of Labor
(DoL) had certified 507,000 workers for extended unemployment
benefits because their employers had moved their jobs south of
the border. The number was so embarrassing that Bush told the
DoL to stop counting.
Most observers believe half a million
is a significant undercount - partly because many jobless workers
don't know they qualify for benefits. According to the Washington-based
Economic Policy Institute, NAFTA eliminated nearly 880,000 jobs.
While the job picture for US workers was
grim, NAFTA's impact on Mexican jobs was devastating. Before leaving
office (and Mexico itself, pursued by charges of corruption),
President Carlos Salinas de Gortari promised Mexicans they would
gain the jobs the US lost. And promised the US that new jobs south
of the Rio Grande would halt the flow of Mexicans heading north.
Instead, during the first year of the
deal Mexico lost over a million jobs as NAFTA-related reforms
required the privatization of factories, railroads, airlines and
other large enterprises. This led to waves of layoffs. And because
unemployment and economic desperation in Mexico increased, the
flow of migrants to the US actually increased. Meanwhile, Salinas
de Gortari's stock plummeted and he became the most unpopular
president in Mexican history.
For a while it seemed that the growth
of maquiladora factories, little more than sweatshops, along the
border would make up for at least some of the job losses. According
to the Maquiladora Industry Association more than 1.3 million
workers were employed in 2,000 border plants by the end of 2001.
Most maquiladoras produced exclusively for the US market. But
tying the jobs of so many Mexicans to this market proved a disaster
as well. When Americans stopped buying during the recession of
2001, the maquiladoras shed thousands of workers. The Government
estimates 400,000 jobs disappeared. As the saying goes: 'When
the US economy catches cold, Mexico gets pneumonia.' The industry
association and the Mexican Government blamed the job losses on
Chinese competition, burying the fact that the plants produced
far more goods than a recession-plagued US market could absorb.
But the most serious consequence of NAFTA
has been its failure to protect the rights of workers. To attract
investment Mexican authorities worked with compliant 'official'
unions to maintain a low-wage economy - reinforced with a system
of 'labour control'.
According to Martha Ojeda, director of
the Coalition for Justice in the Maquiladoras, the government-mandated
minimum wage for workers on the border is about $4.20 a day -
the same as it was 110 years ago when the treaty came into effect.
According to the Center for Reflection,
Education and Action (a church-based research group), a gallon
of milk which costs $3 in a Tijuana supermarket takes 5-6 hours
of a maquiladora worker's labour to buy. Another study by the
Economics Faculty of the National Autonomous University in Mexico
City found that Mexican salaries have lost 81 per cent of their
buying power in the last two decades.
In the barrios of Torreon, three hours
south of the Texas state line, it takes 1,500 pesos a week to
provide for a family of four. A normal maquiladora worker makes
about 320-350 pesos. 'In our communities, you see kids nine or
ten years old bagging groceries in supermarkets or washing cars
on the corners,' says local resident Betty Robles.
Maria Ibarra, who works at the Maxell
plant in Tijuana, describes the impact of poverty-level wages
on her children:
'My oldest one is 19 and works in a maquiladora.
He's been there since he was 15. He couldn't continue at school
because we couldn't get by on what I was earning. The younger
one is 16, he just started in a small shop where they're teaching
him the job. He earns enough for his bus fare and his food, that's
'I felt very bad when they first went
to work. Children should be in school. When they were babies,
I thought they were going to study and become something in life.
But I was forced to send them to work so we could survive, so
that we could live a little better. And it's not just my children
- they're just two of many.'
Omar Gil, who works in an auto parts plant
in Nuevo Laredo comments: 'I've been in these factories since
I was 19 and now I'm 26. I don't have time for any kind of personal
life. I am so tired that on weekends I don't even want to leave
the house. I just want to rest. I feel like my youth has passed
To enforce this system, maquiladora workers
are required to join unions that have no intention of raising
wages or ending dangerous working conditions. Throughout NAFTA's
10-year history, workers have sought to break free in a long labour
war waged from plant to plant along the border. They have organized
independent unions to fight for a larger share of the enormous
wealth the factories produce. But these efforts have been met
with firings, plant closures and even physical violence.
In those few instances when workers successfully
formed independent unions - as they did at Tijuana's Han Young
plant in 1998 - their strikes were broken, despite guarantees
under Mexico's Constitution and Federal Labour Law.
NAFTA's sponsors promised that the treaty's
labour side agreement would protect workers, even though the treaty
itself was intended to demolish all barriers to foreign investment.
The side agreement proved toothless. In ten years not one fired
worker has been returned to their job, and not one independent
union has gained legal status.
Instead, the labour protections built
into Mexico's legal system have been systematically undermined
and eliminated as obstacles to investment. Even when Mexican judges
held that strikes were legal their decisions were defied with
impunity by government authorities.
The maquila model has become the goal
for the World Bank as well. In 2002, Mexican President Vicente
Fox announced he would support the Bank's recommendations to scrap
most of Mexico's Federal Labour Law - eliminating mandatory severance
pay and the 40-hour week. Mexico's historic (though not always
enforced) ban on strike-breaking and guarantees of healthcare
and housing would be gutted as well.
The recommendations were so extreme that
a leading Mexican entrepreneur, Claudio X Gonzales, called them
'over the top', charging that the World Bank wouldn't dare make
such proposals for a developed nation.
The policy of encouraging foreign investment
at all cost also led to the wholesale privatization of Mexican
industry over the past decade and the effects have been devastating.
While three-quarters of the workforce belonged to unions three
decades ago, less than 30 per cent do today. Private owners reduced
the membership of the railway workers' union from 90,000 to 36,000.
During the last two decades the income
of Mexican workers has lost 76 per cent of its purchasing power.
Under pressure from foreign lenders, the Mexican Government ended
subsidies on the prices of basic necessities - including gasoline,
electricity, bus fares, tortillas and milk - all of which have
risen drastically. An estimated 40 million people live in poverty
and 25 million in extreme poverty. The country's new independent
union federation, the National Union of Workers, claims more than
nine million people are out of work - a quarter of the workforce.
Well before NAFTA the disparity between
US and Mexican wages was growing. Mexican salaries were a third
of those in the US in the 1970s. They are now less than an eighth.
It is this disparity which both impoverishes Mexican workers and
acts as a magnet drawing production from the US. By exacerbating
these trends NAFTA forced working communities in Canada, the US
and Mexico to ask some basic questions.
Do workers in developing countries have
the right to pursue economic development in their own interest?
Is there an alternative to becoming a low-wage export platform
with increasing social and economic inequality?
Unless the international trade structure
is changed drastically, national development alternatives, based
on rising wages and production for a domestic market, will not
be possible. Proposing a social clause within that trade structure,
even one that limits the prerogatives of foreign investors, does
little to make national development less dependent on transnational
'The struggle by unions, social justice
groups and environmentalists is about more than just winning a
seat at the table or a social clause or environmental rules,'
the Canadian Labour Congress declared at the time of the World
Trade Organization negotiations in Seattle. 'We're determined
to change the entire trade regime.'
Four years ago, at the height of the protests
that shook those negotiations, Zwelenzima Vavi, the head of the
Congress of South African Trade Unions, described the alternative
to NAFTA and the free trade philosophy underpinning it.
'In the pursuit of profit,' he said, 'governments
are told to remove worker protections, and then use that as an
inducement for investment. But development is a wider concept.
It includes social development, and the living conditions of the
people. Development can't exist with mass unemployment and poverty.'
That one-sided development - productivity
and profits for the few, unemployment and poverty for the many
- is NAFTA's legacy..
David Bacon is a San Francisco based writer
and photographer. His book The Children of NAFTA has just been
published by the University of California Press (www.ucpress.edu).
NAFTA / FTAA page