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Report: NAFTA Largely A Failure for Workers
Published on Wednesday, April 11, 2001 in the Toronto Star
Report: NAFTA Largely A Failure for Workers
Notes job loss, lower wages and labour standards in 3 nations
by Linda Diebel
MEXICO CITY - Canadian, American and Mexican workers have lost jobs and seen their spending power erode under a free-trade deal that was promoted as ``win-win-win'' for workers in all three countries, a new economic report says.

``From the point of view of North American working people, NAFTA has thus far largely failed,'' notes the three-country study examining jobs, wages and labour standards after seven years of the North American Free Trade Agreement (NAFTA).

The report, to be released today, is authored by economic institutes that focus on labour issues: the Centre for Policy Alternatives in Canada, the Economic Policy Institute in the United States and the Mexican Institute of Labour Studies and Investigation.

The report describes stagnant and falling wages and, in Canada and the U.S., an increase in the ``threat effect'' in collective bargaining, in which companies threaten to move production to Mexico if workers don't make concessions. That applies especially in mobile industries such as manufacturing, communications and wholesale distribution.

Governments of all three countries consistently have argued that there has been a job boom under NAFTA.

But today's study, by groups that have previously criticized the trade deal, argues there has been a net job loss in the United States and Canada. While total employment grew in Mexico by 1.2 per cent according to the report, it says that is insufficient to meet the demand for new jobs.

U.S. economist Robert Scott reports NAFTA has eliminated some 766,000 manufacturing jobs, while Canadian economist Bruce Campbell details a net loss of 276,000 jobs under free trade, beginning with the U.S.-Canada deal in 1989.

Mexican economist Carlos Salas describes the other end of the equation, in which workers labour at foreign-owned duty-free plants, or maquiladoras, for a few dollars daily, and live in shantytowns that hug the U.S. border.

The Mexican study says the only types of investment that have grown since 1994 are the stock market and the maquiladora industry. These plants are increasingly moving south from the border to states with even lower wages and more lax environmental and health standards than Tijuana or Juarez.

``In the last decade, the minimum wage in Mexico lost almost 50 per cent of its purchasing power,'' says the report. ``The decline in real wages and the lack of access to stable, well-paid jobs are critical problems confronting Mexico's workforce.''

In the Canadian segment of the report, called False Promise, Campbell says workers should be concerned NAFTA is the economic model for hemispheric integration in the proposed Free Trade Agreement of the Americas (FTAA).

Next week, 34 leaders from the Americas and the Caribbean meet at the third Summit of the Americas in Quebec city to discuss the expanded free-trade agenda.

``Canada has become a noticeably more unequal society in the free-trade era,'' says the study. ``Real incomes declined for the large majority of Canadians in the 1990s (and) increased only for the top fifth. Employment became more insecure and the social safety net frayed.''

Copyright 1996-2001. Toronto Star Newspapers Limited


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