Twenty years of a bad deal for workers


In Mexico, Canada and the United States, workers and unions are marking the 20th anniversary of the trade agreement that has set much of the pattern for the globalised economy.

It is not a happy anniversary, and marches and demonstrations on 31 January 2014 will protest the way the North American Free Trade Agreement (NAFTA) has undermined the jobs, rights and living standards of workers in the three countries.

This pattern is set to be replicated on a larger scale, in the Trans Pacific Partnership (TPP), currently being negotiated among twelve countries around the Pacific rim, including the original NAFTA partners.

Richard Trumka, president of the American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) called NAFTA "only the first in a series of trade agreements that have undermined millions of middle-class American jobs and weakened our democratic structures."

The TPP, he said, would "strengthen corporate power and CEO profits, while putting downward pressure on wages and opportunities for the rest of us."

Sharan Burrow, General Secretary of the International Trade Union Confederation (ITUC), warned that the supporters of TPP ""will at any cost try to dismantle the social protections that bind our communities and societies together."


Job loss in the United States

The job loss record in the US due to NAFTA was documented for years by a provision of US law that assured extended unemployment benefits for workers who could show employers had moved their jobs to Mexico. The US Department of Labor (DoL) kept track of the claims.

When the total passed 500,000, however, US President George W. Bush ordered the DoL to stop compiling these embarrassing statistics.

"By 2010, trade deficits with Mexico had eliminated 682,900 good US jobs, most (60.8 percent) in manufacturing," according to Robert E. Scott of the Economic Policy Institute.

"Jobs making cars, electronics, apparel and other goods moved to Mexico, and job losses piled up in the United States, especially in the Midwest where those products used to be made."

In addition, Jeff Faux, former director of the Economic Policy Institute charges: "NAFTA strengthened the ability of U.S. employers to force workers to accept lower wages and benefits."

In 1997 (three years after NAFTA went into effect), Cornell University professor Kate Bronfenbrenner found that one out of every ten employers facing a union drive said they’d move to Mexico. In 2009, she reported that 57 per cent of employers facing a union election threatened to close their worksite.

In Canada workers didn’t do much better. The treaty "clearly has not delivered the goods," concluded Bruce Campbell, of the Canadian Center for Policy Alternatives. "It is time to reconsider whether NAFTA is contrary to the well being of Canadian workers (and indeed of workers in all three NAFTA countries)."


Devastation for Mexican Workers and Farmers

Linking the economies of the US and Mexico had a devastating impact on Mexican workers. When the current recession started in the US, some 400,000 workers producing for the US market in Mexican border factories (maquiladoras) lost their jobs, according to Martha Ojeda from the Coalition for Justice in the Maquiladoras.

NAFTA created an incentive for the Mexican government to hold incomes down in order to encourage corporate investment in factories producing for export.

"[Government] functionaries and businessmen tout Mexico as an ’export powerhouse,’ but this has not diminished low wages or social inequality," warns Arturo Ortiz Wadygmar of the Institute for Economic Investigation at Mexico’s National Autonomous University. "Instead benefits are concentrated in 500 transnational corporations."

"They say Mexico has labour at a competitive price, but this is just an elegant way of saying that it’s cheap."

In the 20 years since NAFTA was signed, Mexican labour protections have been rolled back. Former President Felipe Calderon forced through "labour reforms" to legitimise contingent work and erode workers’ rights.

Unions which opposed them have been attacked by both government and employers.

The head of the Mexican miners’ union, Napoleon Gomez Urrutia, was forced to flee to Canada after he’d condemned as "industrial homicide" an explosion in a mine belonging to one of Mexico’s wealthiest families.

In one particular case, 44,000 members of the Mexican Electrical Workers were fired and the state-owned company they worked for was dissolved. Current President Enrique Peña Nieto has forced through an "energy reform" that sets up the national oil and electrical industries for privatisation.

In the Mexican countryside, NAFTA’s impact was even sharper.

Fernando Ortega, of the Democratic Farmers’ Front of Chihuahua, charges that NAFTA forced small farmers to compete with huge agroindustrial enterprises in Mexico, the US and Canada, who all receive large subsidies.

About eight million Mexicans migrated to the U.S. in search of work as a result.

Nevertheless, movements to oppose the treaty’s effects have brought together workers and unions in all three countries.

Maria Elena Durazo, executive secretary of the Los Angeles County Federation of Labor, emphasises "international solidarity today encompasses more than just unions and worker organisations. It has become a movement of people."