NAFTA and Labor in North America

Introduction

introduction On January 31, 2008, in Mexico City’s huge Zocálo plaza, tens of thousands of peasants and farmers converged from all over Mexico in convoys of tractors, motorcades, and other vehicles. Joined by labor activists from independent unions, the worker-peasant-farmer unity witnessed on that day delivered a powerful message to the Mexican government. The activists demanded the repeal of the North American Free Trade Agreement (NAFTA) entered into by the United States, Canada, and Mexico in 1994. In a manifesto, protestors declared that NAFTA had caused unemployment, the destruction of agriculture, the deterioration of purchasing power and wages, and extreme poverty to increase at alarming rates.1 In Chicago, home to the second largest urban concentration of Mexicans living in the United States, hundreds protested the visit of Mexican President Felipe Calderón by calling for the “renegotiation” of NAFTA.2 At the same time, a leadership delegation of copper miners from Cananea, Mexico, visited Capitol Hill in Washington, DC. Backed by U.S. and Canadian franchises of the United Steelworkers Union (USW), Mexican miners petitioned members of the U.S. Congress to withhold a $1.4 billion funding package for the country’s security forces proposed by the Bush administration. The miners and their USW allies asked that Congress hold public hearings to investigate the use of the Mexican police and military to violently crush a six-month-old strike over unsafe conditions at the huge Grupo México mining complex located along the U.S.-Mexican border. In 2005–2006, the USW had conducted its own strike against Grupo México in Arizona on the grounds that the company had bargained with the union in bad faith. In 2 . introduction the midst of these disputes, the USW filed a complaint under the NAFTA labor side agreement, the North American Agreement on Labor Cooperation (NAALC), alleging that the Mexican government had violated its terms by unilaterally removing Napoleon Gómez Urrutia as president of the Mexican mineworkers’ union.3 NAFTA has been a target of worker protest since its inception because it is a visible representative of larger developments that have taken place in the global economy since the 1970s. While those developments have adversely affected labor, perhaps most important they also have paralleled the relative decline of the United States as the world’s preeminent economic power. In 2009, this relative decline is projected to accelerate when China replaces America as the world’s leading manufacturing nation, a position held by the United States for more than a century.4 Accordingly, NAFTA is more than just a free-trade agreement among neighboring countries; it is part of much broader, historical context. The rise of the United States as the world’s leader in manufacturing depended greatly on its access to Canada and Mexico for sources of raw materials , labor power, and outlets for capital investment. Although Canada and Mexico did manage to develop a margin of economic independence as this process unfolded, by the time the United States achieved undisputed global hegemony after World War II, American domination over its North American neighbors had been firmly established. The postwar economic boom provided handsome profits for businesses, higher wages for workers, and the enactment of social reforms, all of which resulted in better living standards for workers in all of North America. Beginning in the 1970s, however, when Japan and Europe emerged to challenge U.S. economic hegemony, the postwar boom in North America faded, the rate of profit began to fall, especially in manufacturing, and with it labor’s fortunes started to change. Stagnating wages, rising unemployment, and soaring inflation combined with the building up of competitive pressures in the global economy not only posed greater challenges to U.S. hegemony abroad but also unsettled social relations at home. As domestic political pressures mounted from rising labor unrest protesting these economic developments, the U.S. government responded, at least in part, by enacting a series of legislative measures designed to protect a host of basic industries against foreign competition. But this punitive strategy that targeted nation-states like Japan had too many negative repercussions for United States–based corporations trying to do business in an increasingly competitive and integrated global economy. As a result, the U.S. government then attempted a more ambitious, mul- introduction · 3 tilateral gambit of rewriting the General Agreement on Tariffs and Trade (GATT), established by the United...