NAFTA on the rocks

By Faiza Rady
On his first official foreign trip, US President George W Bush visited Mexican President Vicente Fox last Thursday and waxed lyrical about his vision of the South. Pledging to build a "century of the Americas", Bush seemed to take after his predecessor, Bill Clinton, in appearing to edge closer to the Third World. "Some look South and see problems. Not me. I look South and see potential," asserted the novice US president.
Looking and sounding almost like twin brothers, Bush and Fox went on to praise the virtues of neo-liberalism in unison, with a special emphasis on promoting "free trade" as spelled out in the North American Free Trade Agreement (NAFTA).
Besides having found a useful ally in the Mexican president, Bush has hand-picked his cabinet to serve his purposes. A case in point is Paul H O'Neil, the secretary of the treasury. A definite asset to the Bush administration's radical version of globalisation, in addition to being a fervent supporter of NAFTA, O'Neil boasts a distinguished corporate career.
O'Neil has an impeccable record as chief executive of the eight plants owned by Alcoa Fujikura Ltd, a US-Japanese joint venture operating in the Mexican industrial zones set up on the US border.
Evidence of O'Neil's brilliant performance in the tax-free haven of the US-controlled maquiladora zone surfaced during a 1996 shareholder meeting in Pittsburgh, reported New York Times journalist Sam Dillon in a special report on labour conditions in Mexico. In his keynote address, the company's chief executive duly trumpeted Alcoa's soaring annual profit sheets in Ciudad Acuña. Padded by the maquiladoras' tax-free status, transnational profits are impressive indeed.
The Mexican government, on the other hand, has no share in the gold mine. "Multinationals pay taxes in New York or Tokyo or Stuttgart, but not in Mexico," explained Carlos Heredia, Mexican economist and member of Mexico's lower house of Congress. But this is precisely the point. Conglomerates operate 719 plants in 25 industrial parks, with exports totalling a staggering $55 billion in 1998.
At the shareholders' meeting, meanwhile, the future US secretary of the treasury went beyond mere profit figure-rattling to play the role of "boss with a conscience." Buoyed by his own social benevolence, O'Neil eloquently described working conditions in the Alcoa plants as equivalent to those in comparable US plants. "Our plants in Mexico are so clean they can eat off the floor," quipped O'Neil.
His performance was cut short by Juan Tovar Santos, however. The Mexican assembly-line worker from Acuña had traveled to Pittsburgh to denounce Alcoa's gross exploitation of its work force. Condemning the company's denial of the workers' fundamental right to organise, Santos described how Alcoa -- like all other maquiladoras for that matter -- were quick to sack any workers who initiated attempts to unionise.
Besides violating binding international labour conventions to which both Mexico and the US are signatories, Alcoa's management had also set a highly original precedent by devising a job category unique in corporate history. In a concerted effort to boost profits and slash costs by all means necessary, Alcoa hired special janitors to monitor and supervise toilet paper distribution. Strategically posted at bathroom doors, the janitors' job description specified that they were responsible for handing out no more than three pieces of paper to every worker using the premise.
On a more sombre note, Santos documented management's profit-motivated negligence of essential building maintenance, which resulted in gas leaks poisoning more than 100 workers.
Since the 1996 shareholders' meeting, O'Neil has reportedly somewhat improved working conditions at the Alcoa plants. Nevertheless, the situation remains highly volatile. Unionisation is still taboo, and negotiations between workers and management have not yielded significant results for labour. In the wake of a tumultuous but inconclusive meeting over pay raises and bathroom breaks last October, management called the police. The security forces duly tear-gassed and clubbed protesting workers into submission. A routine solution to quell workers' demands, police brutality is the transnationals' most effective strategy to bypass labour negotiations in the South.
Since Mexico signed NAFTA on 1 January 1994, the maquiladora regimen has compromised workers' rights countrywide by serving as a blueprint for effective corporate practices. While union busting is the order of the day, rampant liberalisation of the public sector has led to more of the same in the manufacturing and service sectors, resulting in massive unemployment and impoverishment.
NAFTA's casualty list reads like an old-fashioned horror story, without the high-tech frills and special effects. "The Mexican middle class is vanishing," reports Global Trade Watch (GTW), a Washington-based group that monitors the effects of globalisation. Hence eight million Mexicans have been pushed out of the middle class into poverty under NAFTA. Instead of the promised prosperity, NAFTA's much-touted liberalisation drive had pushed 60 per cent of the labour force below the poverty line by 1997 -- compared with 34 per cent in the 1984-1994 decade preceding NAFTA. The year NAFTA went into effect, middle class workers lost over 30 per cent of their purchasing power.
Despite NAFTA's ill-fated record, more of the same lies in store for Mexican workers under the Fox-Bush dual administration. The Mexican president and his neo-liberal crew, meanwhile, describe the macroeconomic outlook in Mexico in glowing terms. "True," agrees MP Carlos Heredia, "the Mexican economy is doing well. It's just that most Mexicans are suffering."
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