REVIEW: The Selling of Free Trade
By John MacArthur
Hill and Wang Publishing, 2000;
Review by Roger Bybee
When Master Lock officials announced in 1999 that they were shifting nearly 800 jobs to Nogales, Mexico from their plant in inner-city Milwaukee, they were brutally frank about the hopelessness of the workers’ situation.
“‘We can’t pay you little enough to make the locks here,’ they told us,” recalls Don Burmester, a 21-year UAW member at Master Lock. “They said, ‘There’s not enough concessions we can take from you legally to keep the work here’.”
The announcement rang down the curtain on almost two decades where Master Lock was, quite ironically, synonymous with “labor-management cooperation,” high productivity, and, until the advent of competition in the late 1990s from ultra-low-wage, high- repression China, consistently high profits.
But the workers at Master Lock make up just a few of the casualties of the North American Free Trade Agreement, which essentially guarantees that Mexico’s low-wage, corporate-serving political environment will remain irrevocable regardless of changes in elected government.
Since NAFTA’s passage in 1993, the U.S. trade balance with Mexico has shifted from a $1.7 billion surplus in 1993 to a deficit of over $14.7 billion by 1998, suggesting a loss of roughly a half-million factory jobs; manufacturing wages in the U.S. have stagnated while those in Mexico have fallen sharply; the U.S.-Mexican border has exploded with nearly a 50 percent increase in the number of U.S.-owned “maquila- dora” plants paying 80 cents to $1 an hour and continuing to spew untreated toxic wastes into the air and drinking water.
Such ominous results were quite correctly predicted beforehand by the labor movement and diverse voices including Ross Perot, Pat Buchanan, Jesse Jackson, and Ralph Nader. Moreover, with polls showing 64 percent of the American people opposing NAFTA and only 26 percent supporting it in August 1993, how did the backers of “free trade” manage to prevail? That’s the question that’s at the core of John MacArthur’s excellent book, The Selling of “Free Trade”: NAFTA, Washington, and the Subversion of American Democracy.
MacArthur’s answer is not an appetizing one for those who believe that America’s democratic institutions remain responsive to majority concerns or that corporate-driven globalization will lift all boats. He skillfully paints a detailed and sordid picture of the immense and manipulative corporate lobbying campaign that eventually sold Congress on NAFTA.
Corporate America and its newfound ally, the Clinton administration, pulled out all the stops to ram NAFTA through Congress. Highly-skilled lobbyists from both the corporate world and the administration combined to recruit high-profile salesmen like Lee Iacocca. They worked to mobilize “grass-tops” support among political and community leaders, generate “astro-turf” (pseudo-grass- roots) pro-NAFTA activity, assemble a vast package of political pork for congress-people willing to sell their vote on NAFTA for a government project in their districts, and set up the H. Ross Perot-Al Gore debate (where Gore used specious and irrelevant arguments to prevail over Perot) which decisively shifted momentum in favor of NAFTA.
America’s editorial writers were virtually unanimous and ardent backers of NAFTA, with (by my count) just 2 of 1,300 daily papers opposing NAFTA. If such unanimity were found in the editorial viewpoints of any other nation’s media, it would be viewed as damning evidence of a press corps cowed by dictatorial power.
The role of the commercial media is a facet that MacArthur could have developed much more, but he does include one splendidly revelatory comment by Rahm Emanuel, a hard-driving Clinton administration lobbyist for NAFTA: “You go back and look at all the press; it wasn’t whether NAFTA was good or bad for the economy. Because of the elite value system that runs through the media. …The media were very clear about what they thought of NAFTA: NAFTA was good; it produced jobs; it’s the future. And those who opposed it? Well, they’re just being political chickens because of political forces…. There was no merit discussion in the media on NAFTA. You find a media merit story on the front page, and I’ll write a book for you.”
The corporate-Clinton lobbying machine also enlisted dozens of corporations to make predictions of enhanced employment in high-wage U.S. manufacturing jobs due to increased exports to Mexico under NAFTA. However, as Nader watchdog group Public Citizen documented four years later, 61 of 66 firms failed to meet their promises of U.S. job expansion. Meanwhile, the same old pattern of “industrial tourism”— unfinished parts going from the U.S. home of a corporation to its Mexican subsidiary for completion and then back to the U.S. for sale—accelerated from 40 percent of U.S. exports to Mexico in 1993 to 62 percent by 1996.
While the advocates of “free-trade” who dominate America’s political and media elites publicly maintained that the North American Free Trade Agreement was needed to fully tap Mexico’s markets for American goods, some corporate voices were more forthright on the real nature of the U.S.-Mexico economic relationship. For example, a 1992 Wall Street Journal headline proclaimed, “US Companies Pour Into Mexico, Drawn Primarily by One Factor: Low Wages.”
“The reality of (Mexico) is that only between 10 percent and 20 percent of population (then 93 million) are really considered consumers,” an American Chamber of Commerce of Mexico publication admitted. But media elites swallowed the public line of Corporate America about increasing exports to Mexico’s consumer market.
MacArthur humanizes the effects of the abstract economic arrangement known as NAFTA by focusing on Swingline, the stapler manufacturer whose parent company, ACCO (formerly known in previous incarnations as American Brands and Fortune Brands) also happens to own Master Lock. He presents a highly detailed account of how Swingline, started by a Russian immigrant and eventually employing over 1,200 workers in Long Island City, was bought by ACCO and moved to a modern Nogales, Mexico facility large enough to contain both Swingline and hundreds of the Master Lock jobs shifted from Milwaukee.
In Nogales, workers typically make roughly $1 an hour for 48-hour weeks and live in shacks that provide little protection from the elements.
As for Swingline’s Long Island plant, it has fittingly been converted into a juvenile detention facility. “The house that Jack Linsky with his immigrant’s pluck, the building where so many immigrants had followed to make their way in the New World, was to become a starter jail,” MacArthur bitterly observes.
The Selling of Free Trade in the case of NAFTA, as it was with the recent granting of Permanent Normalization of Trade with China, was essentially a matter of power and money, in the words of Rep. David Bonior, the Democratic whip from Michigan who has been an ardent foe of corporate-style globalization and the resulting race to the bottom.
“Power and money go hand in hand,” Bonior said ruefully after the NAFTA vote. “And money provides the opportunity for power. You get the money from being on the side of the people who have it.”
Clearly, Clinton and Gore sided with those with the money to ram through NAFTA. As Mickey Kantor boasted to MacArthur, “George Bush could never have passed NAFTA. No Republican president could have, because he couldn’t have brought (along) enough Democrats.” The price of NAFTA’s passage for the Democrats was felt in 1994, first when a betrayed labor base understandably failed to enthusiastically rally behind Clinton’s insurance company centered health plan, and later when a very low turnout of working Americans permitted the Republican takeover of Congress led by Newt Gingrich.
The Selling of Free Trade could have been strengthened by drawing on the outstanding work on the U.S.-owned maquiladora plants by William Greider and Charles Bowden, author of Juarez: City of the Future, as well as a more thorough summary of the Center for Public Integrity’s splendid study of the Mexican government’s extraordinary 25 million lobbying campaign to influence the U.S. Congress. Despite this minor limitation, it offers a powerful antidote to the zealous worship of “free trade” practiced daily in Congress and on the nation’s editorial pages. Z
Roger Bybee works with the Wisconsin Fair Trade Campaign.