Published on Thursday, April 12, 2001 in the Toronto Globe & Mail
The Secret Free-Trade Agenda
Accessing cheap foreign labour is good for companies, but only dreamers think it benefits workers
by John R. MacArthur
The upcoming "free-trade" fest of politicians and their tenured valets (also known as economists) in Quebec City has provoked the usual posturing from both sides of the global political divide, with leftists denouncing the conclave as antidemocratic, exploitative of the Third World and skewed toward further enriching the rich.
These critics of "globalization" are not wrong, of course -- the two miles of chain link fence surrounding the FTAA conference area and the 6,000 cops serve to make their point better than they are capable of doing. We can safely say that President George W. Bush and his 33 would-be counterparts are not coming to La Belle Province with a plan to feed the masses more equitably.
But this doesn't stop the left, as well as large elements of organized labour from playing straight into the hands of powerful interests they purport to despise. In every do-gooder attack against the White House and its academic henchman on the trade issue, one can hear the flip side of American hegemonic arrogance -- a belief that the world can be reformed across frontiers into a global system of liberal social justice.
We demand, cries much of the left, that the U.S. and Canadian governments make the rest of the world more like we are; we demand reform in China and Sri Lanka in our own image. To this collective plea comes the specious reply from Jean Chrétien, the Bushes (father and son) and the new Democrats led by Bill Clinton: Why, "free trade" will do just that by making everybody richer, and freer.
So much time is wasted praying, or chanting, for international social change, that the left can hardly see the damage being done directly in front of it, here or in very nearby Mexico. So frightened are the antiglobalists of being called ugly, old-fashioned nationalists, that they can't see what's good about what they've still got -- a partially functioning democracy with labour laws and a minimum wage.
Similarly, the AFL-CIO so dreads being called "protectionist" and "Luddite" that it concedes the "inevitability" of so-called globalization. We must, says the union hierarchy, make the global system more fair, not raise U.S. tariffs or penalize companies that export factory jobs. Every year, the labour federation president John Sweeney attends the World Economic Forum in Davos and lectures the attendees on their moral responsibility to the workers of the world. He would do better if he stayed home and organized a sit-down strike in front of Motorola corporate headquarters in Schaunburg, Ill. Motorola, already non-union, recently closed its last domestic cellular phone factory and is currently building a huge new phone and semiconductor plant in cheap-labour China, a country that will never have U.S. or Canadian-style labour law.
It's not for lack of information that the left and the union bosses lose their nerve when the conversation turns global. NAFTA is a fine test case for anyone fantasizing about international labour and environmental agreements raising standards in the poorer countries. Due largely to NAFTA, by the end of 2000 there were about 3,700 maquiladoras in Mexico, mostly concentrated along the U.S. border, employing 1.35 million people.
These assembly platforms, many of them deceptively modern and clean, are the big lie of the free-trade lobby. Most of their workers still make about $1 an hour for a 48-hour week; huge numbers subsist in sprawling shack cities with no running water or electricity.
Visit a border city -- Matamoros; Juarez; Nogales; Tijuana -- and you will be appalled by the open sewers, the parched landscapes, the gimcrack structures made from pallets and tar paper, the ragged children. Here, the Mexican worker can join the official union, the CTM, but woe unto anyone who seeks to form an independent union that actually fights for higher wages; he may pay with his life.
The new reform President of Mexico (and former Coca-Cola comprador), Vicente Fox, has so far done nothing substantial to deregulate his country's monopoly union, which helps keeps wages down and U.S. factories humming. A realist, he understands how much Mexico, stripped of tariff protection by former president Carlos Salinas, has become a labour colony of the United States. One fact tells the story: Last year Mexican contributions of raw material and components to maquiladora production fell to a microscopic .82 per cent from an already infinitesimal 1.07 per cent in 1999.
And yet the free traders have the gall to promote NAFTA and FTAA as foreign aid to the disadvantaged, rather than exploitation of the indigent. Even worse, they tout the NAFTA "side agreements," allegedly designed to protect labour rights and the environment in Mexico. Not one such case before a NAFTA "tribunal" has resulted in real redress for Mexican working stiffs. (As well, remember the U.S. environmentalists suckered into supporting NAFTA in hope of cleaning up the Rio Grande. It's now filthier than ever.)
Of course, no respectable economist would call NAFTA or FTAA a free-trade agreement because real free trade implies not only duty-free movement of goods and capital, but free movement of labour across borders, which neither the U.S. nor Canada can tolerate. Pure free trade is a utopian madhouse, even crazier in concept than communism. Just imagine the damage to the social structure -- not to mention wages -- if either country permitted unlimited Mexican immigration.
The naive, internationalist left can't face these facts of life. Manufacturing employment, which usually pays better, went into free fall in the United States long before the stock market began its slide -- for what business person in his right mind could pass up dollar-an-hour wages (with little pension or health insurance obligation) so close to the home market, or the even cheaper labour available in China? The political question becomes: Who speaks for the former factory worker now cleaning offices or flipping hamburgers?
There is an alternative: The left could embrace the battered working class at home and unashamedly acknowledge that its first responsibility is to the citizens of the U.S. and Canada, now being sold out by the political elites. If Americans want to help the world's poor we can lead by example, we can fight for more foreign aid, or -- not the worst alternative -- we can leave the dispossessed foreigners alone. U.S.-style "free trade" is already wrecking Mexico; must it now wreck the rest of the hemisphere in the name of helping it?
John R. MacArthur is the publisher of Harper's Magazine and the author of The Selling of 'Free Trade': NAFTA, Washington and the Subversion of American Democracy.
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