Up for grabs: it was sold on a promise of boosting employment, increasing wages and bringing job security. But a decade later, the effects of the North American Free Trade Agreement have been nothing short of disastrous—especially in Mexico. David Bacon explains

New Internationalist, Dec, 2004 by David Bacon

THE North American Free Trade Agreement between the US, Canada and Mexico is 10 years old. President Bush calls it a great success and vows to extend it to the rest of Latin America. Bill Clinton before him promised that the rising tide of cross-border trade would 'lift all boats', benefiting everyone.

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The agreement certainly produced some winners. Large corporations building factories south of the US/Mexico border have been able to cut labour costs and increase profits. Mexico created a new generation of billionaires during the treaty's lifetime.

But the swell of profits and productivity did not lift all boats. Instead, on both sides of the border, communities of working people and the poor have paid dearly for trade liberalization.

If anything, predictions of US job losses were underestimated. By November 2002, the US Department of Labor (DoL) had certified 507,000 workers for extended unemployment benefits because their employers had moved their jobs south of the border. The number was so embarrassing that Bush told the DoL to stop counting.

Most observers believe half a million is a significant undercount--partly because many jobless workers don't know they qualify for benefits. According to the Washington-based Economic Policy Institute, NAFTA eliminated nearly 880,000 jobs.

While the job picture for US workers was grim. NAFTA's impact on Mexican jobs was devastating. Before leaving office (and Mexico itself, pursued by charges of corruption), President Carlos Salinas de Gortari promised Mexicans they would gain the jobs the US lost. And promised the US that new jobs south of the Rio Grande would halt the flow of Mexicans heading north.

Instead, during the first year of the deal Mexico lost over a million jobs as NAFTA-related reforms required the privatization of factories, railroads, airlines and other large enterprises. This led to waves of layoffs. And because unemployment and economic desperation in Mexico increased, the flow of migrants to the US actually increased. Meanwhile, Salinas de Gortari's stock plummeted and he became the most unpopular president in Mexican history.

For a while it seemed that the growth of maquiladora factories, little more than sweatshops, along the border would make up for at least some of the job losses. According to the Maquiladora Industry Association more than 1.3 million workers were employed in 2,000 border plants by the end of 2001. Most maquiladoras produced exclusively for the US market. But tying the jobs of so many Mexicans to this market proved a disaster as well. When Americans stopped buying during the recession of 2001, the maquiladoras shed thousands of workers. The Government estimates 400,000 jobs disappeared. As the saying goes: 'When the US economy catches cold, Mexico gets pneumonia.' The industry association and the Mexican Government blamed the job losses on Chinese competition, burying the fact that the plants produced far more goods than a recession-plagued US market could absorb.

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But the most serious consequence of NAFTA has been its failure to protect the rights of workers. To attract investment Mexican authorities worked with compliant 'official' unions to maintain a low-wage economy--reinforced with a system of 'labour control'.

According to Martha Ojeda, director of the Coalition for Justice in the Maquiladoras, the government-mandated minimum wage for workers on the border is about $4.20 a day--the same as it was 10 years ago when the treaty came into effect.

According to the Center for Reflection, Education and Action (a church-based research group), a gallon of milk which costs $3 in a Tijuana supermarket takes 5-6 hours of a maquiladora worker's labour to buy. Another study by the Economics Faculty of the National Autonomous University in Mexico City found that Mexican salaries have lost 81 per cent of their buying power in the last two decades.

In the barrios of Torreon, three hours south of the Texas state line, it takes 1,500 pesos a week to provide for a family of four. A normal maquiladora worker makes about 320-350 pesos. 'In our communities, you see kids nine or ten years old bagging groceries in supermarkets or washing cars on the corners,' says local resident Betty Robles.

Maria Ibarra, who works at the Maxell plant in Tijuana, describes the impact of poverty-level wages on her children:

'My oldest one is 19 and works in a maquiladora. He's been there since he was 15. He couldn't continue at school because we couldn't get by on what I was earning. The younger one is 16, he just started in a small shop where they're teaching him the job. He earns enough for his bus fare and his food, that's all.

'I felt very bad when they first went to work. Children should be in school. When they were babies, I thought they were going to study and become something in life. But I was forced to send them to work so we could survive, so that we could live a little better. And it's not just my children--they're just two of many.'