Tuesday, July 26, 2011

Mexican and US workers both victims of capitalism's NAFTA

150,000 Mexican farmers attend anti- NAFTA protest
I just finished reading an essay in Foreign Affairs magazine on US immigration. (1) It was written by a couple of “experts”, an economist for a firm that figures out how to make the world business friendly and a “Senior Fellow” at the Council on Foreign Relations. The CFR is a think tank that includes Fareed Zakaria and Angelina Jolie as members; you know----ordinary folks. Another “senior Fellow” at the CFR is Elliot Abrams, former deputy security advisor for Middle East affairs in the George W. Bush administration; heavens help the working class of the Middle East. The CFR describes itself as “non-partisan” but its class position is quite clear as you can see.

The essay was all about the security, or lack of it at the US /Mexican border. It points out that the number of US Border Patrol agents has risen from under 3000 to more than 20,000 in the last 20 years while almost 700 miles of fencing has been constructed, yet there is no clear understanding of how many people cross illegally or how successful they are in staying. Despite the increased security, according to a Fox news poll last year, nearly “three quarters of Americans think the border is no more, or even less secure than it was five years ago"

Undocumented workers live a life of permanent insecurity and fear; they are abused by employers, landlords and rich people using them as cheap Labor. They are a main target as scapegoats for the crisis in the capitalist economy. All the corporate politicians use immigration in one way or another and try to outdo each other when it comes to getting tough on the issue. The US has “strengthened border security beyond what many believed was possible” Barack Obama told residents in El Paso Texas in May. “We have more of everything, ICE, border patrol, surveillance, you name it. So we take border security seriously.” he announced at a press conference in 2010. The annual budget for keeping out the marauding hordes is $17 billion, a gift to business involved in security but a waste for the rest of us.

The Foreign Affairs essay goes in to much detail about security and security related issues. There are “two types of deterrence relevant to border security” the authors claim, one is what we have described above, blocking them and catching them at the border, and the other is deterring immigrants from trying; “behind the border deterrence” as they call it. They then move on to a study that they seem to agree with which argues that “behind the border” enforcement has very little effect as “ attempted entries are driven by economics”. What geniuses. It’s obvious these folks are economic refugees. But what economics drives them?

What is astounding is that these “experts” never mention NAFTA. NAFTA, is the so-called free trade agreement that was the culmination of the opening of markets and elimination of barriers to trade between the US, Canada and Mexico; it is a major economic driver. The integration of Mexico in to the world economy and the embracing of the neo-liberal agenda intensified under the regime of Carlos Salinas De Gortari who was President of Mexico from 1988 to 1994, the signing of the NAFTA agreement. Gortari was an economist and Harvard educated.

NAFTA has had catastrophic consequences for Mexican subsistence farmers, particularly producers of corn. In 2000, these farmers were 40% of all Mexican corn producers. (2)
Sergio Broholm points out that 1.6 million of these subsistence farmers were “ejidaterios people” who farmed small plots of less than 5 hectares called “ejidos”. These ejidos, accounted for 62% of Mexico’s corn production. Corn is Mexico’s main crop but under such conditions with outdated equipment and technology, a huge section of the population each producing small amounts accounted for it as the numbers show. As Broholm points out, agriculture only accounted for 3.5% of Mexican GDP in 2009 but these millions were able to eke out an existence through this subsistence farming. Corn is also a Mexican staple and 60% of the land under cultivation in Mexico in 2000 was devoted to it.

The US was on the fast track for NAFTA aware that it had a huge comparative advantage over Mexico with regards to food productivity and a huge market for corn in Mexico. Only 1.2% of the US population works in agriculture according to the CIA world factbook but in a highly mechanized industry that is one of the most efficient agricultural producers in the world. US agribusiness was salivating at the thought of penetrating the Mexican market.

What NAFTA did was allow US agribusiness to export as much as 2.5 million tons of corn in to Mexico duty free in 1994 and to increase this amount by 3% annually until 2008. (3) So NAFTA allowed heavily subsided US corn, a staple of the diet and means of subsistence in Mexico in to that market without added costs.  One study points out that between 1990-92 to 2006-08, US corn exports to Mexico went from 2.014 million metric tons to 10.330 million. This is a five-fold increase. At the same time, the dependence of Mexicans on US imported corn “rose from 7% to 34% and the price of corn to the producer (these very same small farmers) dropped by 66%”. (4) The immigration issue in the US is connected to these developments.

Part of the Mexican government’s deal in that set up was being able to charge a huge tariff for imports of corn over and above the agreed upon duty free amount though the tariff declined each year until it reached zero in 2008. After that, the US has “unfettered access to Mexican corn markets” says Broholm.

The resulting exodus of Mexican farmers and their families from the land led many of them to head northward to the US. By 2001, 85% of Mexico’s rural population was living in poverty. As Broholm points out, “This has led to a disintegration of rural families that have experienced increased poverty and seen their members emigrate to the United States.” On top of all this, the demand for corn for ethanol production has caused an increase in tortilla prices that causes further misery.

With the end of tariffs on corn in 2008 Mexican corn farmers face unrestrained competition from US agribusiness which is far more productive than Mexico’s subsistence farmers. In 2005, US corporate agricultural production produced 9.3 tons of corn per hectare compared to 2.9 tons in Mexico. (5)

Sergio Broholm’s piece (note 2 below) makes many important points about the disastrous effects of NAFTA on millions of Mexicans including the negotiated rules for the service sector. It’s hard to imagine but with the entry of retailers like Wal Mart in to Mexico, cheaper Chinese manufactures such as toys have wreaked havoc on local producers. The savage laws passed in Alabama, Arizona and other states that make criminals out of undocumented workers and any of us who aid or assist them are not the product of a civilized society and are anti-Union and anti worker in general. These workers are our allies and our class brothers and sisters; it's an assault on all of us.

NAFTA has not been good for US workers either as capital has moved south in search of more lucrative profit making ventures. Mexican wages, kept down through brutal repression of Union organization have been as low as $1 or 60c an hour in some sweat shops. According to the Economic Policy Institute, as of 2006, NAFTA displaced into lower-paying jobs 523,305 US workers with a high school degree or less.

“Workers with at most a high school education were particularly hard hit by growing trade deficit” says the EPI, “they held 52% of jobs displaced; these workers make up 43% of the workforce.”

Most of the jobs displaced by NAFTA trade deficits are in the US manufacturing , which, as the EPI adds, “employs a higher share of such workers than any other major industry.”

The EPI breaks down the US job losses to NAFTA as of 2006 as follows:
"The 1 million job opportunities lost nationwide are distributed among all 50 states and the District of Columbia, with the biggest losers, in numeric terms: California (-123,995), Texas (-72,257), Michigan (-63,148), New York (-51,582), Ohio (-49,886), Illinois (-47,701), Pennsylvania (-44,173), Florida (-39,987), Indiana (-35,157), North Carolina (-34,150), and Georgia (-30,464) (see Table 1-2).

The 10 hardest-hit states, as a share of total state employment, are: Michigan (-63,148, or -1.4%), Indiana (-35,157, -1.2%), Mississippi (-11,630, -1.0%), Tennessee (-25,588, -0.9%), Ohio (-49,886, -0.9%), Rhode Island (-4,482, -0.9%), Wisconsin (-25,403, -0.9%), Arkansas (-10,321, -0.9%), North Carolina (-34,150, -0.9%), and New Hampshire (-5,502, -0.9%) (Scott 2005, Table 1-3)."


I didn’t read Broholm’s entire piece but he makes an observation that is important for all of us workers to grasp. Those of us in the trade Union movement will remember Bill Clinton’s promise to oppose NAFTA when he needed Union votes and money. As the Democrats always do, he reneged on that promise. Still, in the US which is a more Democratic country than Mexico, there was considerable debate on the issue between two sectors of the capitalist class, the protectionists and the free traders. Protectionism (buy American) and free trade, (open markets, privatization, reducing the restrictions on capital flow etc.) are both capitalist solutions to the crisis of overproduction/overcapacity and therefore profitability. Neither of these two solutions to this problem serve workers’ interests. Protectionism can only shift job losses around from one industry to another and lead to disaster and global conflict as it did in the 1930’s (see the Smoot Hawley tariffs). And there is no such thing as free trade as a mighty economic, military and political power like the US imposes its will on a smaller, former colonial country like Mexico. There is no solution along this road, even for capitalism.

So even in the US the debate was kept within the parameters of the market and what is the best way forward for the owners of capital. But in Mexico, the power of the President and the ruling party, the PRI was such that any opposition or debate even among sections of the capitalist class was almost non-existent. It was practically a presidential decree. As Broholm explains, “The agreement had to pass the Mexican Senate but Present Salinas de Gortari’s party (PRI) held 61 of the 64 Senate seats. The whole procedure was described by Tim Golden of the New York Times as,“a formality”.

With the monopoly the two big business parties have over political life in the US and the domination of one section of the bourgeois through the PRI in Mexico, the US and Mexican capitalist class decided the fate of hundreds of millions of workers on both sides of the border. If there is one conclusion we can draw from that it should be that our efforts and attention needs to be directed in one direction and one direction only; building unity, organization, and political power with the Mexican working class and rural poor totally independent of the capitalist class and in the struggle against US capitalism in particular. We have no independent political voice in the US and while we must always pressure the politicians of the two big business parties by mass direct action, our goal must be to build an independent political alternative based on our own organizations in the workplaces, communities and institutes of education.

The future of Mexican and US workers are intertwined. Any movement of US workers must recognize that it is in our interests to bring immigrant workers in to our fold and that includes our undocumented brothers and sisters who are forced by the policies hammered out in Congress and the boardrooms of corporate America to abandon their families and risk life and limb in the search of work, food and a decent life.

While there may be different views on the tactics in the struggle, the preamble to the constitution of the IWW is a good basis for determining our policy toward the workers of the world. It begins:
“The working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of the working people and the few, who make up the employing class, have all the good things of life.
Between these two classes a struggle must go on until the workers of the world organize as a class, take possession of the means of production, abolish the wage system, and live in harmony with the Earth.”

(1) Are US Borders Secure? Foreign Affairs, July Aug. 2011
(2) Re-visiting NAFTA: The Gap Between Prediction and Reality for Mexico’s Small Corn Farmers. Sergio Broholm
(3) Ibid
(4) US Subsidies Cost Mexican Farmers Billions
(5) Re-visiting Nafta
More on this blog about immigration:
Undocumented Workers are not the enemy of Labor
http://weknowwhatsup.blogspot.com/2011/07/undocumented-workers-are-ok-as-long-as.html

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