Don’t repeat NAFTA disaster, trade experts warn
By Mark Gruenberg
4 March 2007
WASHINGTON — The North American Free Trade Agreement, NAFTA, has been a disaster for workers and families, and even social institutions, in the three participating nations — the United States, Canada and Mexico — labor experts from the three countries told Congress.
Not only that, they warned that the pending U.S.-Korea Free Trade Agreement would be a repeat of that NAFTA fiasco. The U.S.-Korea FTA, like NAFTA, lacks worker rights and protections, while giving large rights and advantages to corporations, they said.
The briefing, assembled by the Economic Policy Institute, came as U.S. and Korean bargainers are still haggling over details of the U.S.-Korea FTA, with another negotiating session set for Seoul on March 11.
Bush regime Trade Representative Susan Schwab wants to sign the U.S.-Korea FTA by the end of March so Bush can send legislation implementing it to Congress for up-or-down votes — without amendments — before his fast-track trade pact bargaining authority ends on June 30.
In an echo of the NAFTA debate, Korean Confederation of Trade Unions Vice President Young-Koo Heo told lawmakers and their staffers at the Feb. 27 session the pending trade pact would be a disaster for his nation’s workers and farmers. Workers who protested it were oppressed, Heo added. When they marched against it, 62 Korean unionists were thrown in jail.
In answer to a question, Heo added the FTA would hurt U.S. workers far more than is realized because "56 percent of our workers in Korea are irregular workers, whose wages are less than one-half those of regular workers. If the U.S.-Korea FTA is signed they will be exploited."
That would let multinationals exploit the low wages of that segment of the Korean workforce, just as NAFTA exploits Mexican workers and drives down wages of U.S. and Canadian workers, the other speakers said.
The other experts at the session — Bruce Campbell, director of the Canadian Center for Policy Alternatives, Jeff Faux of EPI, Carlos Salas, Professor of the Institute of Labor Studies in El Colegio de Tlaxcala and EPI senior economist Robert Scott — spent their time comparing the real-world impact of NAFTA with promises that pact’s sponsors made 14 years ago. Those sponsors included business, the GOP and Democratic President Clinton. NAFTA backers claimed it would create at least 200,000 jobs.
Scott noted NAFTA was the template, and the same arguments were used, for other trade pacts, including normal trade relations with China and approval of the World Trade Organization. "Since 1990, we’ve signed 200 such agreements. They were supposed to create more jobs and higher wages" in both the U.S. and other nations involved. "It hasn’t happened," he said.
Other disastrous results:
Flat real incomes in the U.S. for more than 80 percent of the population, even as productivity virtually doubled since NAFTA was signed. Scott and Faux said the gains went into profits and corporate chieftains’ pockets, noting the increased income gap over the same time between the rich and the rest of us.
A reversal of trade balances. Faux said when NAFTA was signed, the U.S. had roughly equal trade with both Mexico and Canada and now runs substantial deficits with both, costing U.S. jobs.
Faux and Salas also noted while Mexico has had an export boom, it’s been in exports to the U.S., from plants that moved to Mexico to exploit cheaper labor there. Those products, such as cars, are then shipped back here. "Thirty-eight percent of our so-called ‘exports’ are fictitious," Salas added.
Faux said U.S. exports to Mexico since NAFTA was signed created 942,000 new U.S. jobs, but imports from Mexico — a large share of them from former U.S. plants whose owners shut them and moved — cost 2 million U.S. jobs.
Salas pointed out that while NAFTA’s sponsors, led by former President Carlos Salinas de Gortari, promised Mexican incomes would rise, they haven’t. "The rate of growth in Mexican per capita income since NAFTA is one-third of what it was in the 1960s-80s," pre-NAFTA, Salas said.
"Wages in Mexico haven’t grown due to a combination of government-led policies and business-led policies. The government’s policy is that ‘It is to the benefit of people to have a job, no matter how low its wages,’" he added. As for ex-President Salinas, one speaker said he flatly told the U.S. during the NAFTA debate: "Do you want our tomatoes — or our tomato pickers?"
NAFTA restrictions prevent Canada from moving away from its present resource-based economy, which depends on sending raw materials — notably oil, natural gas and electricity - south of the border. Canada is the largest U.S. trading partner and #2 in all three areas. But when Canadians try to develop industry that could compete, multinationals use NAFTA to prevent methods — from tax breaks to regulations — that could help increase competition. He also said NAFTA is helping erode Canada’s social safety net, as corporations attack its requirements.
Heo also said the U.S.-Korea FTA could destroy the agricultural economy, as Salas said it has done to small farmers there.
But unlike Mexico, the Korean small farmers and their culture would be wiped out and with no place to turn. NAFTA was designed to get Mexican campesinos to migrate to its cities, Salas said. They did migrate to the cities, or to the U.S.
And Scott warned that if the U.S.-Korea FTA goes through, Koreans "have been sold a bill of goods," because huge U.S. trade imbalances cannot continue. Nations that depend on such imbalances to keep their economies going or, like Korea, look forward to doing so, would suffer, he added.
Mark Gruenberg writes for Press Associates, Inc., news service. Used by permission.