NAFTA and GATT—who benefits?

T he last U S-based typewriter company, Smith Corona, is moving to
Mexico. T here’s a whole corridor of maquiladoras [factories where
parts made elsewhere are assembled at low wages] along the border.
People work for five dollars a day, and there are incredible levels of
pollution, toxic waste, lead in the water, etc.
One of the major issues before the country right now is the
North American Free T rade Agreement. T here’s no doubt that
NAFTA’s going to have very large effects on both Americans and
Mexicans. You can debate what the effect will be, but nobody
doubts that it’ll be significant.
Quite likely the effect will be to accelerate just what you’ve
been describing—a flow of productive labor to Mexico. T here’s a
brutal and repressive dictatorship there, so it’s guaranteed wages
will be low.
During what’s been called the “Mexican economic miracle” of
the last decade, their wages have dropped 60%. U nion organizers get
killed. If the Ford Motor Company wants to toss out its work force
and hire super cheap labor, they just do it. Nobody stops them.
Pollution goes on unregulated. It’s a great place for investors.
One might think that NAFTA, which includes sending pro -
ductive labor down to Mexico, might improve their real wages,
maybe level the two countries. But that’s most unlikely. One reason
is that the repression there prevents organizing for higher wages.
Another reason is that NAFTA will flood Mexico with industrial
agricultural products from the U nited States.
T hese products are all produced with big public subsidies, and
they’ll undercut Mexican agriculture. Mexico will be flooded with
American crops, which will contribute to driving an estimated
thirteen million people off the land to urban areas or into the
maquiladora areas—which will again drive down wages.
NAFTA will very likely be quite harmful for American workers
too. We may lose hundreds of thousands of jobs, or lower the level
of jobs. Latino and black workers are the ones who are going to be
hurt most.
But it’ll almost certainly be a big bonanza for investors in the
U nited States and for their counterparts in the wealthy sectors in