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Free Trade Agreements Spur Illegal Immigration

By: Gina-Marie Cheeseman

[ Posted On: 2007-04-23 ]

Undocumented immigrants perform important jobs around the country. They toil on farms, harvesting crops so America can eat. In the March/April 2007 edition of Utne Reader, an article titled, "Putting a Stop to Slave Labor" appeared. The writer, Bryan Welch, compares undocumented labor to slavery, saying it serves "the same purpose as the Africans who slaved for American masters." Undocumented workers are virtual slaves, as they are paid meager wages and live in poverty.

It is hard to get a definite estimate for the number of undocumented workers in America, namely because out of fear of deportation, undocumented workers usually do not respond to census requests. Depending on the source, estimate range from seven to twenty million. A great number of undocumented workers are concentrated in California, with many of them working in agricultural fields in the San Joaquin Valley of California, considered to be the ‘agriculture center of America.’ Many of the fruits, vegetable, and even grains (corn in particular) come from the San Joaquin Valley.

Over 60 years ago, John Steinbeck declared that California farming, with its need for a "peon class" was "economically unsound under a democracy." The sad truth is that his assessment is as true today as it was then. Anyone who has spent time in California’s San Joaquin Valley during harvest time knows that farming there is still labor intensive.

Mexican immigrants are the laborers, and they have fled their homeland looking to escape the trap of poverty. The justification for labor intensive farming is that Mexican farm workers are making much more money here than they would in Mexico, thus their quality of life is enhanced by working in the fields. However, the question remains to be answered whether it is ethical to maintain farming that is labor intensive.

Many people in California cities, such as Los Angeles and San Francisco, are calling for tighter border controls. In the San Joaquin Valley it is rare to hear anyone talk about tighter border control without mentioning the fact that California farmers need Mexican labor. California farming is on tenuous ground due to its dependence on intensive labor.

NAFTA spurs immigration

Free trade agreements have been touted as good economic sense, and a means to boost the economy in Latin America. The truth of the matter is that they do neither, but harm both the economy in the United States and in Latin American countries. Free trade agreements hurt American farmers, as they create a glut on the market of produce from Latin America, which drives down the price of American crops. Free trade agreements also continue the trend of outsourcing, where jobs are outsourced to other countries, taking jobs away from Americans.

NAFTA is an acronym which should be mentioned every time the mainstream media reports on the illegal immigration issue. It stands for the North American Free Trade Agreement which established a free-trade zone in North America. Signed by the United States, Canada, and Mexico in 1992, it took effect on January 1, 1994, but immediately lifted tariffs on the majority of goods produced by the three participating nations, and called for the gradual elimination of most trade barriers over a 15-year period.

Touted as a means to lift Mexico out of poverty, NAFTA has actually driven it further into poverty. According to the Economic Policy Institute 2001 report, "Mexican wages have decreased 27% since NAFTA, while hourly income from labor is down 40%."

The reasons why free trade did not benefit the Mexican economy are because by definition free market trade includes privatization, which in turn eliminates state subsidies and controls, and almost never includes redistribtion.

The 2001 report by the Economic Policy Institute also found that when Mexico began NAFTA negotiations it had "noncompetitive production costs… due to higher prices for inputs such as diesel and electricity, higher financial costs, and higher marketing costs (due to deficient infrastructure in highways and warehouse storage…among other factors)."

John Warnock, economist and author of The Other Mexico: The North America Triangle Completed, defines free trade as being "about private investment rights." Warnock cited a World Bank Report from March 2006 where it is mentioned that the poorest 10% of the population earns only 1.5% of the total Mexican income, but the richest 10% earn 42.8%. "The distribution of wealth, which would be very hard to measure, is believed to be much worse." The March report by the World Bank also claimed that since NAFTA the amount of Mexican people that live below the poverty line is "62% of the economically active population." The minimum wage has fallen by 40.7%. The Mexican government sets the poverty line at two daily minimum wages for a family with five members, or 80 pesos, about seven dollars.

Between 1993 and 2000 the disparity between Mexican and American manufacturing wages has increased from $9.6 to $12.1 per hour. Reports by the Organization for Economic Co-operation and Development (OECD) state that wages in Mexico have dropped by 10% since 1995 while labor production increased by 45%. Work hours have increased from eight to twelve hours a day during the same time period. The number of people working more than 48 hours per week has increased since 1988 from 2.3 million to 9.3 million.

Economists at the National University in Mexico City wrote a study that cited 13.3 million workers in 2000 earned less than around $3.93 a day. The study also mentions that labor production’s part of the Gross Domestic Product has decreased from 34.16% to 30.66%.

Child labor is a huge problem in Mexico. Although the Mexican constitution prohibits children under 14 to work, UNICEF reports that five million Mexican children are working.

Free trade has brought a decline in the number of professional jobs. Without unemployment payments, no healthcare assistance from the government of any kind, Warnock believes that "Neoliberalism and NAFTA have been good for the rich in Mexico and the large corporations. The banks, privately owned and robbed by the Mexican rich, have been bailed out of bankruptcy twice by taxpayers. The illicit drug industry flourishes and is now more important than the oil industry, and free trade and cross-border trucking have made marketing much easier."

Farming has suffered greatly under NAFTA. The majority of Mexican immigrants in the U.S. were farmers with small plots of land without the access to subsidies and technology of their American counterparts. NAFTA has brought a flood of lower costing American goods to Mexico, making it impossible for Mexican farmers to compete. In a book titled, Stolen Harvest, author Shiva Vandana believes trade agreements import more food (and also export it) without first being allowed to meet the needs of the people, then local farmers are often undersold and driven out of business and national currencies earned do not get to circulate within that society. Hunger increases as a result."

In an autumn 2002 article in the Wilson Quarterly writer Amy Chua stated, "Throughout Latin America, educational reform and equalization of opportunities for the region’s poor indigenous-blooded minorities are imperative if global markets are to benefit more than just a handful of cosmopolitan elites." Or as Joseph Stiglitz, economic professor at Columbia University, and winner of the Nobel Prize for Economics puts it, "Trade liberalization puts downward pressure on unskilled wages (and increasingly even skilled wages), increasing inequality in more developed countries. Countries trying to compete are repeatedly told to increase labor-market flexibility, code words for lowering the minimum wage, and weakening worker protections. Competition for business puts pressure to reduce taxes on corporate income and on capitol more generally, decreasing funds available for supporting basic investments in people and the safety net."

The pro-immigration rallies in May 2006 mostly involved the sons and daughters of illegal immigrants. The result of the mainstream media’s failure to provide context is a lack of understanding by the majority of Americans about the true cause of Mexican immigration into America. Renowned economist James K. Galbraith wrote in the July/August 2006 issue of Mother Jones that, "Signs and speakers declared that many immigrants didn’t want to come to America. They were forced to, by the Latin American debt crisis, by NAFTA and the liberalization of trade in corn, which threw millions of poor Mexican farmers off their land. (Now the same will happen to Central America, with CAFTA.) It was predictable. Food goes south, people come north; the migrants are the victims, not the architects, of globalization."

Another renowned economist, Jeff Faux, founder of the Economic Policy Institute, calls NAFTA the "NAFTA nihilist nightmare of unregulated capitalism." Joel Rogers, University of Wisconsin professor, and contributing writer for The Nation magazine, claims, "Neo-liberalism declares unfettered business domination our best bet for material well-being." The irony is that free trade is called neo-liberalism by political experts, but it is neither new nor liberal.

The moniker free trade is not exactly appropriate either. As scholar and author, Noam Chomsky puts it, "It's called free trade, but it's just a particular variety of protectionism designed by the principal architects of policy in pursuit of the vile maxim, just as Adam Smith said. It's all written there in the Wealth of Nations, if you read the actual text, instead of the politically correct version given to you. And he's exactly right, and that's the way it translates into the modern period."

Economist Jane D’Arista traces the free trade movement back to 1971 when President Nixon ended the Bretton Woods agreement which resulted in a new international monetary system where payments are made by private banks in dollars instead of gold, thus creating a dollar-centric international monetary system. This had led to "export-led growth" which has the tendency to "suppress domestic wages and regulatory standards."

If a country can’t afford to pay for imports or attract foreign investment, it has to export more than it imports "to one or a few countries that issue the global means of payment." The countries that must do this adopt policies that depress wages and exchanges rates.

D’Arista calls for a "new international monetary that can open access to international trade and investment for all nations on equal terms by allowing all currencies to be used in cross-border as well as domestic transactions."

In a July 2005 article journalist David Bacon wrote about the impact of NAFTA on the labor movement in Mexico. "Protection contracts and charro unions are the primary system of labor control for foreign corporations that have built factories on the border. This system allows them to pay extremely low wages, even by Mexican standards, and to maintain dangerous and even illegal working conditions, with little fear of organized worker resistance." The term charro unions comes from the 1920s Mexican labor leader who dressed like a charro (cowboy).

Thousands of contracts in Mexico are "arrangements of mutual convenenience among corrupt unions, the government and foreign investors who own the factories," according to Jesús Campos Linas, the dean of Mexican labor lawyers. Big payments are regularly made under NAFTA contracts to union leaders. Wages in manufacturing have significantly decreased. For example, automotive workers in Mexico earned one-twelfth of what American automotive workers made in 2000, but in 1980 they earned one-third of American automotive worker’s wages.

Border Factories: The Exploitation Zone

Factories, called maquiladoras, were established along the border in order to create a "border zone" where protections are not in place for labor unions, health, safety, and environmental laws. In Bacon’s article he claimed that "By 2001, more than 2,000 such factories were employing more than 1.3 million people, and border cities like Tijuana and Juárez had mushroomed into industrial urban centers with over a million residents each." 35% of all new employment in manufacturing was in maquiladoras, which pay low wages. A report by the Latin American Working Group reported that "the purchasing power of the minimum wage fell by 17.9% through 1999."

Certain American industries benefit from the protectionism of NAFTA. In a speech at the University of Virginia in 1993 Chomsky said that one of the main goals of the American government in regards to NAFTA is "to increase protection for things in which the US has an advantage…intellectual property." In other words, new technology, "the technology of the future" is what the U.S. wants to protect. NAFTA is only the beginning of free trade agreements between the U.S. and other governments. The Central American Free Trade Agreement, ratified by both houses of congress last summer, would include the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. CAFTA is seen as a stepping stone to the Free Trade Agreement of the Americas which would include every Latin American country (except Cuba) and the U.S. The FTAA itself is a stepping stone to the Multilateral Agreement on Investment (MAI) which would include the countries in the western and eastern hemisphere.

Free trade expands to Central America

The Central American Free Trade Agreement (CAFTA) (which includes the U.S., Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua) was approved by the Congress summer 2005, and signed by President Bush. In order to be established it must be approved by all participating nations. Costa Rica, Nicaragua, and the Dominican Republic have yet to do so. [verify]

CAFTA does not contain worker or environmental protections. It ignores the standards set by the International Labor Organization, and requires only that participating countries enforce existing laws. In Central America, laws for workers are far from adequate. The U.S. Trade Representative’s (USTR) CAFTA Policy Brief claims that, "The enforcement of labor laws in the region needs more attention and resources." (p.2)

CAFTA is a stepping stone to FTAA, Free Trade Americas Agreement, which would include the United States and every Latin American and Caribbean country, except Cuba, totaling 34 countries.

Central America and the Dominican Republic make up the second largest U.S. export market behind Mexico, and is the 10th largest U.S. market worldwide. There is an economic chasm between the U.S. and Central America the size of Texas. The combined Gross Domestic Product (GDP) of Central America is equal to less than 0.5 percent of the U.S. GDP.

Central American farmers are concerned that they will not be able to compete with U.S. exports. Two/thirds of the Central American population rely on agriculture for employment.

The Pew Hispanic Center estimates twenty-two percent of undocumented workers are from Central America. If NAFTA is any indication, the implementation of CAFTA will increase the number of immigrants from Central American countries, who will end up being exploited as cheap labor for both corporations and farmers.

Article Source: http://www.afroarticles.com/article-dashboard

About The Author: Gina-Marie Cheeseman is a freelance writer with a passion for social justice. Growing up in a farming community in the San Joaquin Valley, she spent much time in the Fresno sun, but it did not fry her brain.

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