Fostering a lasting grass-roots global solidarity

One measure of the success of the demonstrations in Quebec this past spring lies in the way established media have responded to them. Advocates of the Free Trade Area of the Americas (FTAA) defend their rush to extend corporate trade principles to the rest of the hemisphere in language that mimics the protests. Some corporate lobbies now promise that the new trade agreements will include labor and environmental protections.

Mainstream media suggest that new global trade agreements are the best way to improve the lot of the poor worldwide. Nonetheless, globalism will take on a human face only if labor and environmental activists continue to resist the president’s campaign for “fast track” authority to negotiate his own deal. These activists in turn are most likely to succeed if they build alliances with their labor and environmental counterparts abroad.

President Bush and the global media have made a familiar claim for FTAA. Expanded trade will allow the spread of advanced products and production processes to the entire hemisphere, thereby creating more good jobs for all. Unfortunately, experience with the North American Free Trade Agreement does not support such optimistic scenarios. Working-class incomes failed to keep pace with gains in worker productivity. A recent joint study by Canadian, Mexican and U.S. economists published here in the states by the Economic Policy Institute (EPI) show some of the reasons why.

The report documents an increase in what the authors describe as the “threat effect” in collective bargaining. Companies threaten to move production to Mexico if workers don’t make concessions. Such threats have been most prevalent and credible in mobile industries such as manufacturing, communications, and wholesale distribution. These threats gain credibility because NAFTA has resulted in a net loss of 766,000 U.S. jobs, while Canada suffered a net loss of 276,000 jobs under trade agreements going back the U.S.-Canada deal in 1989. (EPI puts Maine’s net loss at 3,300 jobs.)

When labor activists respond to such studies with the demand that future trade agreements include labor standards, they encounter a familiar rejoinder. They are accused of wanting to impose U.S. standards on poorer nations and thereby shut them out of trade and economic development. FTAA supporters argue that labor throughout the so-called developing world supports expanded trade and wants more multinational investments.

Yet as the EPI study points out, even Mexico has suffered under NAFTA. New jobs have been created. Nonetheless, those new jobs have failed to keep pace with the number of peasants displaced by NAFTA-induced removals of agricultural subsidies. In the last decade, the minimum wage in Mexico lost almost 50 percent of its purchasing power.

Workers in the global South hardly speak with one voice. Some South American unions do seek expanded trade. They are rightly suspicious of U.S. unions, some of whose leaders have a history of protectionist agendas inimical to South American development. Many of these South American unions are, however, controlled by their governments. These establishment unions have spawned their own rank and file resistance. That resistance includes many activists who are concerned about the ways the “threat effect” is now extended to Mexico itself.

Some of the maquiladora industries are now moving or threatening to move out of Tijuana and Juarez to nations with even cheaper labor and more lax environmental standards. Global trade agreements protect corporate facilities and intellectual property but say little about labor rights. Effective resistance to these agreements will nonetheless require a higher degree of international labor solidarity than has yet been achieved.

One start in this direction is a set of proposed international trade standards that guarantee activists everywhere more knowledge about current corporate practices. Rep. Cynthia McKinney, D-Ga., has introduced HR 460, Transparency and Responsibility for U.S. Trade Health. This act requires U.S. firms to disclose the following information regarding their foreign subsidiaries: 1) Location, address and corporate name; 2) financial agreements and investments; 3) worker rights practices, working conditions and labor standards; 4) age, gender, wages and number of employees in each facility; 5) environmental performance, including disclosure of all pollutants released and the amount of natural resources extracted.

These requirements neither dictate wages abroad nor impose environmental standards. They do, however, provide citizens everywhere the information needed to assess corporate practices and initiate appropriate remedial responses. It is very clear that many foreign subsidiaries of major multinationals are able to pay better wages and improve labor and environmental conditions, but McKinney’s bill would leave to local governments and citizen activists decisions about when and how to press such demands.

Because such an approach would avoid the heavy handed efforts to impose one-size-fits-all standards, it is less likely to be regarded as veiled protectionism and it would improve the possibility of more fruitful international ties among labor and environmental groups. Without such ties, the promises of globalism will continue to ring hollow for most citizens everywhere.

John Buell is a political economist who lives in Southwest Harbor. Readers wishing to contact him may e-mail messages to jbuell@acadia.net.