Let’s Not Trade Away Jobs to Mexico

The Bush Administration’s race to get a fast-track, free-trade agreement with Mexico may boost profits of some U.S. companies hungry for cheap labor, but it could be a disaster for millions of low-income workers in this country.

Carla Anderson Hills, the U.S. trade representative, is leading the Administration’s unseemly rush to get the agreement. President Bush said such a deal would also include Canada, which has its own free-trade pact with us.

Hills, who thinks on a grand scale, hopes in time to bring other countries into a Western Hemisphere free-trade agreement, which would surely mean the export of more U.S. jobs and would further depress U.S. wages.

It would pit U.S. workers against Latin American workers who, like the Mexicans, earn a small fraction of workers’ wages here.

The idea is simple enough. By removing almost all tariffs and other trade barriers, U.S. firms would be encouraged to open plants in Mexico and eventually throughout Latin America.

Providing more jobs for Mexicans and other Latin Americans is a great idea, but we shouldn’t ask workers here to pay for it with their jobs, especially as our unemployment rate is rising.

Sometime in future, exporting our jobs may develop Latin America and help the United States a bit. But that distant possibility will give little comfort to U.S. workers whose jobs are moved.

There’s nothing new about U.S. companies going abroad for cheap labor. However, the Administration’s proposed free-trade agreements will vastly expand the territory where the companies may recruit low-wage workers and escape U.S. laws that help protect workers and control pollution.

Negotiations for a U.S.-Canadian-Mexican agreement have started, and Hills hopes to have it completed by year-end.

Early next month, however, Congress could wisely slow the rush toward the pact by rejecting President Bush’s request for a two-year extension of his authority to negotiate a fast-track agreement that Congress could reject but not amend in any way.

Ramifications of a tripartite pact alone are uncertain, but it is ridiculous to compare a Western Hemisphere free-trade agreement with the 12-nation European Community scheduled to become a single market in 1992.

The EC includes many of the world’s most economically advanced countries, and none are as poor as most of the countries that would be our partners in a Western Hemisphere Community.

One way to predict what will happen to our workers is to look at those maquiladora plants owned and operated by U.S. companies just south of our Mexican border.

The U.S. firms usually make components of a product here and ship it to their maquiladora plants, where it is assembled and returned to this country for sale.

The free-trade pact would change that system, to our disadvantage. A study issued last week by the U.S. International Trade Commission said the proposed pact would allow Mexico to produce more of those component parts, 95% of which are produced in this country for use in the maquiladoras . That shift would mean the exportation of many more jobs from this country.

The poverty-stricken Mexicans urgently need jobs and so accept 60 to 80 cents an hour, with almost no fringe benefits, from the maquiladoras . That is less than the average that workers are paid in other parts of Mexico and doesn’t come close to our national minimum wage of $3.80 an hour or the $4.25 minimum wage in California.

The maquiladora owners also get favored treatment on tariffs and taxes. And because they operate in Mexico, where laws and enforcement are looser than in the United States, they seldom worry about such costly details as water and air pollution treatment, worker safety or sanitation.

It’s a good deal for the U.S. companies, as shown by their rush to get into the act. In 1988, 1,000 maquiladoras employed about 300,000 Mexicans at wages no worker could survive on in this country.

Since then the number of maquiladoras has doubled, and they employ nearly 500,000, most of them young women earning about 60 cents an hour. They live in squalid shacks, often without running water, sewers or electricity.

We must not expect our workers to compete with even more of those unfortunates.

The jobs provided to Mexicans by the U.S. companies are better than none, but they are not stopping the flow of illegal aliens, as some claim.

Last week in a U.S. Senate hearing on the proposed agreement, Thomas Donahue, AFL-CIO secretary-treasurer, noted that poor Mexicans won’t be deterred from trying to slip across the border, seeking jobs that pay several dollars an hour, just because a U.S.-owned maquiladora is offering work at 60 cents an hour.

The trade commission said the proposed agreement would lead to an expansion of maquiladoras throughout Mexico, no longer limiting them primarily to plants near the border.

Trade between the two countries may well increase under the proposed agreement. The trade commission concludes with the less-than-reassuring guess that the United States will “probably” end up, in time, with a net gain under a free-trade pact with Mexico.

The AFL-CIO’s Donahue said all of us must help raise Mexican living standards with everything from debt relief to expanded foreign aid and development. But he correctly complains that the proposed trade pact “asks only our workers to pay for Mexican development. There is no equality of sacrifice, no sharing of the burdens of assisting our neighbor.”

Organized labor may not stop the proposed agreement, but if Congress takes it off the dangerous fast track it is on, an agreement debated in depth might be devised that would help workers of all the nations involved, not mostly corporations in their quest for cheap labor.