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The Hidden Costs of Free Trade
We have already seen the devastating effects of the North American Free Trade Agreement in Massachusetts. According to conservative estimates, more than 100,000 manufacturing jobs have been lost in the last decade alone. Nationally, at least 3 million jobs have been sent offshore, and the wage gap continues to expand.
Our trading partners have suffered, too - with huge increases in inequality and massive displacement. For example, at least 1.3 million Mexican farmers have lost their livelihood under NAFTA. As a result, the number of annual immigrants from Mexico to the United States surged from 332,000 in 1993, the year before NAFTA went into effect, to 530,000 in 2000 - a 60 percent increase.
Despite the unsatisfactory record of NAFTA as a "free trade" model, the neoliberal economic policy has continued its march forward in the same direction. This week, the Democratic-led Congress will have its first vote on the Bush administration's latest NAFTA-like expansion, the US-Peru bilateral free trade agreement.
Some Democrats are supporting this effort because President Alan Garcia of Peru has agreed to improve some international labor laws with presidential decrees. But Peruvian labor leaders think this is insufficient and will not protect the rights of the majority of people, 75 percent of whom work in the informal sector of the economy.
Like many workers in Latin American countries, Peruvians face constant threats to their labor rights. Violations include discrimination against union organizers, illegal firings, and forced overtime without pay. Further, the new system of fixed-labor contracts and subcontracting radically undermines workers' rights because it does not guarantee a 44-hour work week or labor standards. The new, much-talked-about labor language added to the US-Peru agreement does not solve this or many other key labor rights issues.
Latin America is infamous for having the most unequal income distribution in the world. In Peru, the meager income growth of the last few years has not been shared equally. Peru's capital, Lima, the country's most densely populated city, has experienced growth at a rate twice that of the rest of the largely rural country. This manifests itself in limited access to critical services, including healthcare. According to the United Nations' Food and Agriculture Organization, nearly 15 percent of Peru's population is malnourished.
As if that weren't enough, there's an unseemly underbelly to the proposed deal that could lock Peru into a privatized social security system similar to the proposal by President Bush that Democrats successfully fought off in the last Congress. The main beneficiary of the provision seems to be Citibank, the largest shareholder in ProFuturo AFP, a company authorized to compete against Peru's national social security system.
An effective trade policy with Peru would create jobs and increase wages, reinforcing our national security by strengthening our industries, promoting economic opportunities abroad, and seeking specifically to alleviate income inequality in both countries.
Our policy makers must change the model if they expect to achieve a different economic result than the one NAFTA has produced. Halting our expansion of the NAFTA model into new bilateral trade agreements is not an end to trade. Rather, it is a starting point for a long overdue revision of trade models that consider not only maximum profits for multinational corporations, but critical improvements in the lives of working families of all trading partners.
Adrian Boutureira is the leader of the Global Economic Justice Initiative for United for a Fair Economy.
© 2007 The New York Times Company
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13 Comments so far
Show AllGood to see people finally waking up to the costs of so-called free trade. It would have been much better though if they would have paid attention back in 1992 when Ross Perot and people like myself were trying to tell everyone what was going to happen. Now, unfortunately, it may be too late.
Lobo Gris
I voted for Bill Clinton in 1992. After watching him enthusiastically pushing NAFTA through in 1993 without even pretending to push for adding labor or environmental standards to it, he lost my support.
Do you think the soon to be released Clinton papers will show that Hillary fought him on this?
First of all, there is no such thing as "free" trade. It is nothing but a backdoor to MAXIMIZING POVERTY and TERRORISM. If trade were for free, then why are these scams filled with Congressional pork, corporate pork, patents on just about everything to make then unfree, no provisions to remove national bans on hemp, etc ... ?
Dennis Kucinich isn't afraid to call a spade a spade when it comes to the "free trade" debacle. Gee, maybe that's why he's considered dangerous enough that the Russet's have to start paying attention and instead of ignoring him, they will try to make him a laughing stock. Look folks, the fact that they are even taking the time to do these dispicable slams, is because he carries a clear, cogent, and very populist message that poses a serious threat to the power elite. So now, they attack, and according to Gandhi, once they attack you, you win. Let us hope and pray that it is so.
I don't think the "soon to be released" Clinton papers will show Hillary fighting Bill on anything. He is her little trolly all the way to the nomination-God forbid. Bill was a democrat in name only and so is his wife. I, for one, am sick to death of this sordid and sickening Bush-Clinton-Bush...Clinton ? pattern. Please folks wake up-almost any other democrat running is more acceptable that Hillary
Free trade is good for the corporate bottom line and little else. Sure it brought us a lot of cheap goods, and it's a good thing, since it has meant lower wages for many. But now we're finding that even those "cheap" goods are tainted.
All those cheaper goods came at a cost, to our fellow citizens, who lost their jobs, a good future, and yes the only beneficiary is the corporate bottom line, and investors, all these faceless entities that feed off of misery without a conscience. What has been created is a sick and twisted economic system.
"The Free Market is the weapon of the economically powerful," Otto von Bismarck.
FrederickJohnson has it right on. For too long, the progressives have allowed the neoliberals to frame "free" trade as somehow helping the "economy". It's pathetic that the US will all of a sudden rail against "illegals" all the while living off their "cheap" labor. The working/lower/middle class in both the US and elsewhere is supposed to be united against the corporate elite, not divided and fighting amongst themselves on "immigration" vs. "illegals" which Corporate America loves. There is no such thing as free lunch and likewise the same goes on markets and trade, PERIOD.
1- are you sure you can measure 100000 jobs out of 200000000??
2-3 million jobs lost and 4 million gained.
3- why are some countries rich and others poor? Honk kong and south korea come to mind and others poor like cuba and north korea.
4- In 1976 chile and peru had identical per capita gdps. Now chile is 300% richer because they persued policies completely antithetical to everything you believe. If we follow your advice America will be much poorer.
genghis
Actually, Chile is doing well because the price of copper (and other extracted minerals) is skyrocketing. And Chile's copper mines and processing industries are nationalized.
The nations located near around the perimeter of China: the governments of Hong Kong, Taiwan, S. Korea, etc. were "allowed" to actively intervene in their economies in monetary controls, protected national markets, government lead industrial policies, egualitarian land distribution schemes, etc. because the US wanted to surrond Red China with a cordon sanitaire of successful capitalist states.
I could go on and on and give you historical evidence that "free" trade is usually promoted by either the elite of wealthy nations or the elite of poor nations.
The elite of poor nations always know that though they impoverish a large number of their people the US will bail them if there are any revolts.
Third and Second World elite tend to be cheap labor contractors. They help keep the native labor cheap and docile and, in return, they take a cut in the corporate profits.
Last, no wealthy nation became wealthy via free trade. The elite gained their wealth by using their governments to protect their infant industries via high tariffs, to enact navigation acts (which controlled what ships could carry what), to maintain strict monetary controls, to gain vast government land grants (US R & Rs), to sponser government- or bank-financed monopolies, and award government contracts, and fight colonial warfare (to gain and control more markets).
The benefits of mythical free markets is meant to fatten the heads of the slaves with self-subjegating fantasies; the masters know the difference between fantasy and reality.
Freedom for the rich is slavery for the poor.
Free trade is only "free" for the already wealthy and powerful. The newspeak we are experiencing in this country would be amusing if the results weren't so dreadful. The free market is touted by conservatives (or more aptly named radicals) as the solution to all the world's economic problems. In fact, what we have is nothing even close to a free market or pure capitalism. We have corporate welfare and subsidies along with government no-bid contracts that support companies like Haliburton. Much of the funding for the research and development by drug companies that skyrocketing drug prices is supposed to pay for is actually coming from our tax dollars - it's one reason the cost of medical is so high per capita in American compared to other countries.
If all businesses incomes were taxed using the same criteria as individual incomes, and if there were no subsidies at all from the government, big business would have to make it on their own. That would be real capitalism - not that I advocate allowing businesses to run rampant without regulation, but it would surely change the nature of the economy for the government to stop funding them.
I also voted for Clinton the first time around and not the second time. Hillary Clinton gives me the screaming willies, and I will not vote for her even if it meant another Republican in office. Kucinich gets my vote no matter who is on the ticket.
No matter how many times it's repeated, it bears repeating again: In the words of Eugene Debs, "I'd rather vote for what I want and not get it than vote for what I don't want and get it."
I don't want Hillary Clinton, Barrack Obama, or John Edwards almost as much as I don't want any of the Republican nutjobs who are running. Voting for Clinton in the primaries in the hope that she will beat the Republican is just setting us up for disappointment and more of the same old, same old corporate-run America.
Check out this article and more at the Labor is Not a Commodity blog -- there are links to take action here: http://laborrightsblog.typepad.com/international_labor_right/2007/11/the-hidden-cost.html