PERSPECTIVES ON NAFTA : A Bad Deal, Especially for California : The middle class and the environment are already suffering, and the new side agreements don’t offer sufficient security.

I plan to vote against the North American Free Trade Agreement. NAFTA, negotiated by the Bush Administration and modified by the Clinton Administration’s side agreements, is not good for America and it is not good for California. NAFTA will cost California jobs and threaten America’s middle class.

Passage of NAFTA will accelerate the move of American companies to Mexico. With the current political climate, no company would willingly admit a plan to move operations to Mexico. But one poll of senior executives showed that 40% thought that it was “very likely” or “somewhat likely” that his or her company will shift some production to Mexico if NAFTA is ratified.

I supported the Clinton Administration’s efforts to improve NAFTA with side agreements on worker protection and the environment. Unfortunately, the agreements recently announced do not go far enough to protect California’s interests. The side agreement on labor should have included a specific plan to assist American workers who lose their jobs when American plants move their operations to Mexico. It does not. There are no guarantees that we will have the funds needed when it comes time to retrain those workers.

The side agreement on the environment should have contained language guaranteeing that federal and state environmental protections will not be challenged as an unfair trade practice. It does not. California’s strong laws protecting our air, our rivers and our coasts could be vulnerable to challenge.

The side agreement also should have guaranteed funds for projects to clean up environmental pollution on the U.S.-Mexico border. It does not. Instead, we have vague commitments for a border environmental agency that will provide loans financed by revenue bonds for these critical cleanup projects. But there is no specific guarantee that we will have the money when it comes time to stop untreated sewage from flowing onto San Diego’s beaches and to clean up the rivers that have been fouled by dumped waste.

American companies will be drawn to Mexico by its low-paid workers. Mexicans normally work a 48-hour week, with average wages and benefits of $2.35 an hour, compared to the roughly $16 per hour average wage in the United States. The minimum wage in Mexico is $4.21 a day, compared to the U.S. minimum wage of $4.25 an hour.

If our manufacturing and production jobs disappear, so will the foundation of this nation: the American middle class. A large and prosperous middle class is critical to our democratic system. I will not support a trade agreement that has the potential to divide our country into halves: the wealthiest who reap the gains from their investments in Mexico, and those displaced by the trade pact who are forced into jobs paying little more than the minimum wage.

This is not the time for the NAFTA gamble. The U.S. economy is sluggish. Growth is low and job creation is uneven. California is especially troubled: Unemployment is running at roughly 9%, and workers continue to fear for their jobs as we cope with defense conversion and corporate downsizing.

Economists’ predictions about the impact of NAFTA on American jobs range from short-term losses in the thousands to losses of hundreds of thousands. With our economy in this weak and troubled state, we simply should not take the NAFTA gamble. And I will not gamble with something as critical as California’s jobs and its economic recovery.

The NAFTA text does, however, provide substantial protections and standards for corporate investment and business property. Five of the 22 NAFTA chapters contain protections for investors. One section, for example, would limit the ability of Mexico to nationalize foreign property; another sets standards for protecting intellectual property.

I support those protections, but I feel that if we can establish standards and protections for our business interests, then we should have established standards and protections for our workers and our environment. The side agreements should have done this. They did not.

NAFTA also fails to lay the foundations necessary for massive economic integration of the vastly different American and Mexican economies. In 1992, the U.S. gross domestic product was roughly $6 trillion; Mexico’s was $334 billion.

The Mexican government keeps wages artificially low, even as worker productivity grows. And workers are unable to fight for higher wages because unions are discouraged and outspoken workers are intimidated, harassed and often fired. Mexico’s wages are also driven down by laws allowing 14- and 15-year-old children to work up to 36 hours a week, even during the school year.

Despite dramatic differences in our economies, no steps have been taken to ease Mexico’s transition toward a partnership with the United States and Canada. In contrast, the European Community admitted its new, less-developed members slowly. The EC cushioned the economic integration with $27 billion in “social cohesion” funds to retrain displaced workers and build necessary infrastructure. The EC also clearly recognized the need to harmonize workplace standards and minimum wages during the process of integration; 11 of the 12 EC members agreed to negotiate a social charter to deal with these issues.

Instead of adopting a flawed NAFTA this year, we should return to the negotiating table and forge a more rational policy for economic development in Mexico and all of Latin America. We should develop a common market for the Americas modeled after the European Community. This new policy must be based on the premise that expanding trade and business opportunities abroad are not done at the expense of our jobs, our workers and our environment.