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“Of the Rich, For the Rich and By the Rich”

Twelve years after the signing of the North American Free Trade Act (NAFTA), a pattern of deceptive promises and exaggerated benefits become clearer to those who feared it most – the working class.

The original, declared, intention of NAFTA was to open the door and encourage trade between the United States, Canada and Mexico. The real impact of the agreement has been to destroy the social fabric of workers’ rights, the environment and democratic accountability across the continent to the benefit of large corporate investors and others in the economic elite.

The promises that were sold to workers in each of the three countries were similar in some ways but the message was tailored for each national group.

Americans were promised that NAFTA would generate large numbers of net new good jobs with the increased exports to the other two countries. Workers in Mexico were told that they would enjoy increases in both the amount and quality of employment and earnings. Canadian workers were promised an increase in economic growth, income, employment and a rise in living standards.

The effects of NAFTA have far exceeded the fears of its critics.

In the U.S., almost three million workers have been displaced or lost their jobs due to the agreement. Most of these have been high paying manufacturing jobs. With the loss of these industries, Americans have found most durable goods are only available as imports. The result of loss of manufacturers and off-shore purchases has led to the highest trade deficit in U.S. history. This has also created a downward wage spiral as the few manufacturing companies still remaining in the U.S. vie to remain competitive.

Workers in Mexico have been stranded somewhere between unemployment and insecurity. The agricultural industry took the initial hit as workers fled the countryside for the “maquiladoras.” In 1991 over one quarter of Mexicans worked in the agricultural sector; by 2004 that number had fallen to one out of six. From 2000 to 2004 a dynamic growth of jobs occurred but many of these were low wages with little or no social contracts. The internal migration associated with these jobs created a new problem as many of the new hires were young women and many older male wage earners were left unemployed.

A low Canadian dollar during the late 90’s until about 2003 allowed Canadian companies an export benefit over its’ southern neighbor. Contrary to proponents of free trade, Canada’s industrial diversification has remained dormant except a few areas such as high tech products. Manufacturing lost about 400,000 jobs in early NAFTA years and then started a steady incline until the dramatic rise in the Canadian dollar which reflected with losses in jobs. Personal disposable income has been on a continual spiral downward due to stagnant wage increases.

In each nation, workers’ share of the gains from rising productivity fell and the proportion of income and wealth has gone to those at the very top of the economic pyramid. The ability to shift production out of the country and then sell the products back home, gives that company or corporation an enormous advantage in bargaining leverage over workers. This leverage has also created a corporate influence over economic policy in all three nations since the agreement was signed. The result undermines the protections established in the previously separate domestic economies and allows companies to deny social protections using the international integrated market for its excuse.

The praises of NAFTA are led by those corporations and their executives who have profited greatly at the expenses of workers.