.. e for babies born in Cameron County, TX climbed to 19/10,000 babies, almost twice the national average. The public health crisis plaguing the U.S.-Mexico border attracted intense media scrutiny in 1991 after three babies were born with a rare condition called anencephaly (born brainless) during a 36-hour period at the same Cameron County (Brownsville) Hospital. The Texas Department of Health Neural Tube Defect Surveillance Project reported a new cluster of defects in 1995. The Department recently declared that The entire border area remains a high-risk area [for neural tube defects] compared to the rest of the U.S.
As the health crisis looms overhead, so too does the disparity in wage levels between U.S. workers and Mexican workers. Production workers engaged in manufacturing in the U.S., where the average hourly compensation is approximately $18.74/hr, must, because of NAFTA, compete directly with maquila workers now in new foreign-owned high-tech plants who are paid $1.51/hr. In the 1990’s U.S. workers have experienced wage stagnation followed by a couple of years of weak wage growth, notwithstanding sustained and much-herald economic expansion. Many economists attribute this wage stagnation to trade.
NAFTA makes it easier to suppress workers’ wages and to discourage unionization with threats of job relocation. According to a study undertaken under NAFTA’s labor side agreement, employers use the threat of relocation under NAFTA as a means of leverage against organizing efforts and salary demands or workers. Kate Brofrenbrenner of the Cornell University School of Industrial Relations found that the percentage of U.S. companies following through on threats to close in response to union drives tripled under NAFTA. NAFTA was engineered to raise living standards in Mexico so that Mexican citizens could develop into a consumer society, thus creating a relationship between two mature trading partners.
Yet the earnings of Mexicans have declined precipitously since NAFTA’s enactment: In 1997, 7,771,607 Mexicans were documented as earning less than Mexico’s legal minimum wage of $3.40/day, 20% more than in 1993. Among Mexico’s working class, salaries at the end of 1997 had fallen to 60% of their 1994 value. The disappearance of American Icons has begun. The following casualties have evidenced this: Huffy Bicycles closed the world’s largest bicycle plant in Celina, OH-laying off 650 workers and shifting its production to Mexico. Bass Shoes shifted production to Mexico after being located in Maine for 122 years, laying off 350. Thompson Consumer Electronics, successor to RCS-Victor, moved what was once the world’s largest TV factory located in Bloomington, IN to Mexico laying off 1,200 workers.
Only 8% found jobs that match or better their previous pay scale. The mutually beneficial proposition of NAFTA was to provide economic development and a better life for Mexicans and Americans. NAFTA was to make Mexico, in economic and social terms, more like the United Statesa more prosperous society with a middle class. Realistically, what has happened is that Mexico’s level of development has regressed under NAFTA. Poverty is greater, the middle class is smaller, wages are lower, and maquiladora employment offering substandard living wage jobs and a diminished quality of life along the border has flourished.
When asked, 67% of Mexicans say that Mexico has had almost no success with NAFTA. Proponents of NAFTA said the pact would place Mexico on a new development path, away from low-paying, oppressive, pollution-choked border maquiladora zones and toward the sort of development necessary for genuine and substantial growth. The day NAFTA went into effect, maquila employment along the U.S.-Mexico border stood at 546,433. As of April 1998, 983,272 Mexicans were employed in maquiladoras; the maquila sector is the top generator of employment in Mexico. While Mexican economic development has failed miserably, so too has standard of living for many Mexicans. Between 1984 and 1994, and through several currency devaluations, the Mexican poverty rate remained constant at 34% of the population.
As of 1997, 60% of the Mexican labor force now lives below the poverty line. Some other startling facts include: Under NAFTA, eight million Mexicans have been pushed into poverty and out of the middle class. Salaried workers in Mexico lost 34% of their purchasing power since 1994, the year NAFTA went into effect. One important, but little-known component of NAFTA is the new power it grants to private corporations to directly attack laws and policies they deem harmful to profitability. Under NAFTA’s new investment protections (Chapter 11), the decisions made by local and national governments in all three NAFTA countries are now subject to challenge before NAFTA tribunals by corporate plaintiffs.
This provision of NAFTA, which only took effect in 1996, has already produced seven challenges, demanding damage payments in excess of a billion dollars. Remarkably, in every instance these challenges have had little or nothing at all to do with international trade. Rather, public health, environmental zoning and state court civil procedures have been attacked. One such challenge has already led to the repeal of a major public health law in Canada. Knowledgeable observers believe that this initial spate of suits may be the harbinger of a far larger legal onslaught in the coming years as more corporations discover the potential uses of the new tool NAFTA provides. Law and policies can be challengedwhether or not they have anything to do with international tradeas long as an investor or corporation in one country has some actual or potential business interest in the country it wishes to sue.
On September 22, 1998, Mexico formally requested formal dispute resolution ( a binding arbitration panel) under NAFTA to force the U.S. to open its border to Mexican trucks with destinations anywhere in the U.S. (presently, Mexican trucks are limited to destinations within a certain distance from the U.S.-Mexico border). The border had been scheduled to open on December 17, 1995, but the U.S. Department of transportation denied full access to the U.S. market to Mexican truckers because of safety concerns.
If the arbitration panel decides in Mexico’s favor, the U.S. will be forced either to open its border to Mexican truckers or pay compensation to Mexico. A 1997 U.S. government report highlighted many environmental reasons for not opening the U.S. border to Mexican trucks. Since NAFTA was enacted, none of the concerns regularly voiced by the U.S.
government and public safety advocateslike the existing problems of gun and drug smuggling across the borderhave been addressed. There are many frightening facts to confirm the fears associated with complete open borders to be fed by Mexican truckers. Issues such as truck safety: According to the Government Accounting Office, fewer than 1% of the 3.3 million trucks crossing the border into the U.S. every year are inspected. Nearly half of those checked are put out of service because of safety concerns. In 1998, at least 5,000 trucks per day were crossing into the U.S.
through Texas, but only five (5) inspectors are on duty during week days. In El Paso, only one (1) inspector is on duty to inspect 1,300 trucks that pass through per day. The number actually inspected: 10-14 per day! Most cocaine comes across the U.S.-Mexico border. The U.S. DEA estimates that 70% of the cocaine smuggled into the United States comes across the U.S.-Mexico border. U.S.
Customs Service estimates that 300 tons of cocaine are smuggled into the U.S. from Mexico annually. U.S. Customs reports that one of the hottest U.S. exports, stolen cars, are funneled through Mexico.
Of the 200,000 stolen vehicles shipped from U.S. ports annually, at least 10% of these are simply driven across the California border; this does not include those smuggled across the California border by rail or truck or those driven or smuggled across Mexico through other border states. Beyond smuggling vehicles, gun smuggling between the U.S. and Mexico is a problem that has only been exacerbated by the more permeable border between the two countries: 90% of illegally owned guns come across the U.S.-Mexico border. Finally, if there is a hidden advantage to this dark cloud, it should come in the form of ameliorating harmed workers. NAFTA’s Trade Adjustment Assistance Program was designed to provide assistance to workers who lose jobs due to NAFTA.
Unfortunately, the majority of workers clearly displaced by the agreement never receive benefits. Indeed, the program’s harsh eligibility restrictions virtually guaranteed this outcome: workers are only eligible if they produce a product that is directly affected by NAFTA. Thus, all service workers and all retail and agricultural workers are automatically excluded, as are small manufacturing workers who lose their jobs because their industry is indirectly affected by the agreement-for example, makers of inputs for manufacturers who have reelected to Mexico. NAFTA’s so-called side agreements were supposed to be the saving grace-counterbalancing any NAFTA damage to the environment and the rights and interests of workers. The labor side agreement, the North American Agreement on Labor Cooperation (NAALC), added to NAFTA by the Clinton Administration to win Congressional votes crucial to the pact’s approval, has been a model of regulatory toothlessness. Despite repeated efforts by labor unions and others to use the labor side agreement for the purposes for which it was intendedto stop abuse of workersthe agreement has proven useless. The new NAFTA labor commission has identified major instances of abusive practices, yet, to date, not a single enforcement action has been leveled against an offending country nor a targeted practice abolished.
Nineteen (19) submissions have been brought forward under the NAALC: twelve against Mexico, six against the United States and one against Canada. None of these have resulted in fines against the offending country. Although the right to organize is a universally recognized fundamental human right, under the NAALC, failure by Mexico, Canada and the U.S. to enforce the right to unionize is not a punishable offense. It is widely recognized that the institutions established under NAFTA’s environmental side agreement have failed to ameliorate the infamous environmental degradation along the U.S.-Mexico border.
Since NAFTA was enacted, Mexico still has not begun to collect data on environmental pollution, in violation of the North American Agreement on Environmental Cooperation, the environmental side deal. The problems of pollution, toxic waste and other public health threats cannot be identified and addressed until data is collected and analyzed. Meanwhile, the explosion of the maquiladora employment has exacerbated public health crises along the border; 500,000 people on the U.S. side of the border live in colonias (unincorporated settlements), many of which lack running water and sewage systems. Consequently, there is clear and convincing evidence that NAFTA is not in the best interest of the United States. Whether arguing on the economic front, public health or safety issues, or environmental impact, I opine that this lassize-faire trade arrangement was poorly constructed and implemented.
Investment capital is leaving this country, and I assert that there has been and will continue to be an overall decline in our country’s standard of living. Something must be done about this situation now, before it develops into a disaster for all parties concerned. I firmly believe that NAFTA has the potential to damage our nation’s economy, drastically increase unemployment, and to stunt the pride and nationalism felt for our country. That is, of course, if it hasn’t done so already. Endnotes Politics Essays.