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Nothing to Celebrate

NAFTA at 20 Years

by NICK ALEXANDROV

This has already been a rotten year for Washington state’s Boeing workers, who “agreed to concede some benefits in order to secure assembly of the new 777X airplane for the Puget Sound region,” an Associated Press article claimed on January 4. Jim Levitt, a 35-year Machinist at Boeing, gave a shop-floor view of this “agreement,” explaining in a New Year’s Eve piece for Labor Notes that the deal was “rammed down our throats with a calculated voter suppression effort,” the vote slated by the International Association of Machinists & Aerospace Workers for “a day when many, possibly thousands, of our members will not be present.” “Besides losing the defined-benefit pension,” Levitt stated in a follow-up piece, “we’ve lost collective bargaining, for all intents and purposes,” with Boeing’s “new modus operandi” being “Take It or We Leave.” This threat is serious, revealed by the company’s diligent efforts to help eviscerate U.S. labor in recent years. “From 2001 to 2004,” historian Norman Caulfield writes, “Boeing cut more than 35,000 employees from its U.S. workforce,” part of some 3 million domestic manufacturing positions eliminated around the same time.

NAFTA, the so-called “free trade agreement” between Canada, Mexico, and the U.S. that turned 20 on January 1, secured rights for investors, and has helped spur this devastation of U.S. manufacturing. It was a bipartisan triumph, Jeff Faux reminds us, “conceived by Ronald Reagan, negotiated by George Bush I, and pushed through the US Congress by Bill Clinton in alliance with Congressional Republicans and corporate lobbyists.” And one of its accomplishments has been “accelerating the offshoring of jobs in the aircraft and aerospace industries,” Caulfield explains, noting that, in 2005-2006, “Cessna Aircraft, Bombardier Aerospace, and Raytheon Aircraft announced plans to move wire harness production from Wichita, Kansas, to various locations in Mexico.” Depicting these developments as “failures,” a common criticism, misses the point, since NAFTA’s supporters shaped it to serve their interests. Activists Kevin Danaher and Jason Mark list “Boeing, General Electric, Motorola, Caterpillar, and IBM, among others” as some of its chief backers—a group, in other words, that most definitely “did not include labor unions, public interest organizations, or small business associations,” sociologists Patricia Fernández-Kelly and Douglas S. Massey observe.

Critics warned immediately that the arrangement would ruin the lives of those excluded from the planning stages. Faux, in 1993, emphasized “the certainty that NAFTA will cause economic and environmental loss to a significant number of Americans,” while Sheldon Friedman, almost a year earlier, concluded that “[t]he victims of NAFTA will be many of the same workers who have already been devastated over the last decade or more by plant closings, permanent layoffs, and real earnings declines.” Furthermore, NAFTA’s proponents were well-aware of its predictable outcomes, having produced scant evidence to counter the grim forecasts. The U.S. International Trade Commission, for example, “found that the highest estimate of a potential NAFTA contribution to employment in the United States was” an impressive “eight one-hundredths of one percent,” Faux pointed out. And the “Hufbauer-Schott study, regarded as the definitive case for NAFTA,” omitted from its final version a table, appearing in a draft, “that showed a job loss over the long term from NAFTA.”

Since both advocates and opponents knew what the arrangement entailed, there was little possibility of its consequences being seriously debated. Paul Krugman, a great fan of the initiative, complained in 1993 about how “hopeless” it was “to try to argue with many of NAFTA’s opponents,” none of whom were able to grasp the obvious—namely, that “NAFTA will have no effect on the number of jobs in the United States,” the future Nobel Laureate proclaimed with a straight face. But NAFTA prevailed not because of its champions’ intellectual finesse, “but because of a mammoth lobbyprop conducted by corporate ‘big hitters’—including Federated Department Stores, Amana, Whirlpool, G.E., Westinghouse, Caterpillar, CitiBank, Fruit of the Loom, and Boeing—that insisted in media adprop campaigns that NAFTA was the key to prosperity,” communications theorist Alex Edelstein clarified.

These campaigns diverted attention from the fact that NAFTA was the key to labor’s misery, as intended. Dean Baker wrote recently that NAFTA was “designed to push down the wages of manufacturing workers by making it as easy as possible to set up operations overseas,” and it has contributed, the Economic Policy Institute’s Robert E. Scott explained, to growing “trade deficits with Mexico,” which “had eliminated 682,900 good U.S. jobs” by 2010, “most (60.8 percent) in manufacturing.” The term “trade,” as used in these contexts, takes on a bizarre meaning, bearing little resemblance to the phenomenon international trade theory purportedly describes. Peter Dicken notes that a significant portion of global “trade” today occurs “within the boundaries of the firm—although across national boundaries—as transactions between different parts of the same firm.” It’s believed that roughly a third of global trade is intra-firm, though Dicken admits “that is probably an underestimate.”

The U.S.-Mexico border, no barrier to the corporations that pushed for NAFTA, has become increasingly militarized over the past two decades, to the point where only the most hostile desert stretches remain free of Border Patrol swarms—a “physical layout” that “promotes the death of migrants,” in investigative journalist Óscar Martínez’s grim assessment. These migrants try to escape a country where huge swathes of the terrain have been transformed from lands serving subsistence needs into potential profit sources, shattering poor farming communities in the process. David Bacon, quoting business columnist Carlos Fernández-Vega, notes that, from 2000-2012, “about 26 percent of the national territory was given to mining consortiums for their sole benefit.” These transfers were concurrent with wipe-outs of both tariffs on agricultural goods entering the country, and subsidies for Mexican farmers—“a death sentence” for these people, Ronald Mize and Alicia Swords conclude, and Laura Carlsen points out that one-quarter of all Mexicans now lack access to basic food, while malnutrition plagues one-fifth of Mexico’s children.

Reviewing a similar catastrophe, the Irish nationalist John F. Scanlan argued in 1880 “that free trade is by far a more formidable agent than war in the subjugation of a nation.” Scanlan was referring to the British-Irish Acts of Union (1800-1801), “designed for British and imperial purposes,” in historian Alvin Jackson’s evaluation, and which created a “free trade area” between the two kingdoms. An earlier historian and economist, Henry Charles Carey, discussed in an 1872 book the impressions of one “English traveler” surveying the wreckage of “the free-trade provisions of the Act of Union” throughout Ireland in 1834; in Kilkenny, the wanderer recounted, rather than “finding men occupied, I saw them in scores, like specters, walking about,” while in Callan, “containing between four and five thousand inhabitants, at least one thousand are without regular employment,” with “six or seven hundred entirely destitute.” The similarities between past and present are obvious, and should be borne in mind, Faux writes, as U.S. officials shed “crocodile tears over jobs and inequality”—while Obama demands the authority to force through arrangements like the Trans-Pacific Partnership, described as “NAFTA on steroids.”

Nick Alexandrov reports on the deteriorating political climate in Honduras in the December issue of CounterPunch magazine. He lives in Washington, DC.