Shafted

Free Trade and America's Working Poor

Edited by Christine Ahn

Food First books, 2003, paper

Anuradha Mittal, Food First
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On January 1, 1994, the North American Free Trade Agreement (NAFTA) was implemented, joining Mexico, Canada, and the U.S. into a common market to create the largest free trade area in the world, covering (at the time) some 360 million people. Meanwhile, negotiations to create the World Trade Organization (WTO) resulted in that organization's rules taking effect on January 1, 1995.

... The proponents of NAFTA, as of all trade agreements, ( promised it would raise standards of living and ensure full employment in the context of expanding trade, while upholding the objective of sustainable development. The truth is that NAFTA has sparked a race to the bottom of wages, employment, and working conditions, where workers in every NAFTA country have suffered. NAFTA was to bring over 200,000 new jobs each year to Americans. Between 1994 and 2000, the U.S. experienced a net loss of 3.2 million jobs. In one ten-month period, between September 2000 and June 2001, 675,000 jobs were eliminated in the manufacturing sector alone. These were generally union jobs with decent pay and benefits, and their loss left workers to find new work that paid only 70 percent of their former salary.

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The U.S. has captured world markets through low commodity prices, with the result that one out of three acres planted in the United States produces food or fiber destined for export much of it sold at below the farmer's cost of production. For example, the U.S. exports corn at prices 20 percent below the cost of production, and wheat at 46 percent below cost. Practically the only producers that can survive in this situation are big agribusiness farms that garner the overwhelming majority of government subsidies. So U.S. taxpayers keep big producers afloat, small farmers can't compete and disappear, and the low farm commodity prices that free trade fosters only increase the profits of processors, exporters, and seed and chemical companies.

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On January 1, 1994, the inauguration of NAFTA was answered by the uprising of the Zapatista Army of National Liberation (EZLN) in Chiapas. Since then, millions of people have taken to the streets in India, the Philippines, Indonesia, Brazil, Venezuela, Australia, South Africa, Europe-everywhere-in massive demonstrations to show their outrage against the free trade paradigm.

Unified by a commitment to universal values of democracy, social and economic justice, peace, and respect for life and human dignity, the global justice movement that has come together cannot be merely identified as an "anti-globalization" movement. It is the global movement for justice, for women's rights, for immigrant and indigenous peoples' rights, for workers' and farmers' rights. It is the movement with the conviction that a better world is possible and the alternatives that will bring it into being. This new human rights movement is an open challenge to the lies of free trade agreements.

Dena Hoff, National Family Farm Coalition
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Free trade is no longer about an exchange of commodities between countries-wheat for coffee or bananas. What free trade is really about is procuring the unregulated movement of unlimited amounts of capital anywhere in the world. To this end, farm families have become pawns in a dangerous game played by powerful people who trade away the futures of the next generations of farm families, who in turn neither understand nor consent to the rules of the game.

When Congress gives up the right to debate and amend trade agreements, they stop any meaningful participation by the American people in decisions that will affect every facet of their lives as well as the lives of every person on this planet.

Free trade is no longer an economic issue. It is a moral issue. Valuing trade over all, including citizens' right to participate in trade decisions and to hope that free trade can be fair trade, is wrong.

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In the nearly ten years since NAFTA, the facts show that the impacts to family farmers and ranchers in the U.S., Canada, and Mexico have been disastrous. Yet we stand ready to export this disaster to the rest of the Western Hemisphere.

Gary Grant
Black Farmers and Agriculturalists Association
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U.S. agricultural policy believes that Archer Daniels Midland (ADM) can feed a hungry world, and even worse, that they can do it better than a robust mixture of vibrant family farmers. In effect, the government subsidizes large corporate giants like ADM, Monsanto, and Tyson, which doesn't reduce hunger in the world, but increases the inequitable distribution of wealth, with wealth trickling upward and away from small family farmers.

John Bunting, Dairy farmer
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Dairy farmers are failing now in spite of every effort. Milk prices have continued at record lows for over a year. Many of us feel betrayed. In other parts of the state and the country, those who have gotten big upon the advice of experts feel an even greater sense of betrayal. There are record levels of foreclosures throughout the country.

While dairy farmers are seeing record low milk prices, imports of dairy products have poured in from all over the globe.

Cheese is coming from countries unknown for cheese production. Lithuania is now the fifth-largest exporter of cheese. We import from there a type of cheese called Goya. It has no tariff rate quota and when grated is indistinguishable from Italian type grated cheese. It is imported for about 42 percent of the cost of cheese from Italy.

If you consider the imports of powdered dairy products, you see the global corporate hand reaching to countries around the globe. There has been a steady increase of imported dairy proteins from India. We have increased our imports of caseinates from China this year. Dairy powders are coming from Russia, Belarus, and Ukraine. It is a known fact that milk from that part of the world is commonly contaminated with persistent radioactive residue from Chernobyl.

Pietro Parravano, Pacific Coast Federation of Fishermen's Associations
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Our markets for wild salmon have largely collapsed due to the flood of farmed fish imports. These farmed salmon operations are mostly owned by a few large European corporations that have been successful in externalizing their true costs of production, making the public pay for the environmental damage these operations cause-never mind the potential human health risks some of these aquacultured products present because of the use of antibiotics, pesticides, and food colorings in fish farms.

Cheap farmed salmon has driven down the price paid to fishermen for wild salmon to the point many can no longer break even, even in Alaska where salmon runs have been exceptional. As a result fishermen are selling out, if they can even find buyers for their boats and permits. Processing plants are closing and the fishing infrastructure of so many of our coastal communities is beginning to collapse.

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The shrimp fishery in the Southeast and Gulf is suffering a similar plight with the flood of cheap farmed shrimp imports from China and elsewhere. Cheap imports, mostly farmed fish products from nations that either directly subsidize fish farming or indirectly subsidize it by allowing operators to externalize costs, are just one problem facing fishing men and women from increased globalization.

U.S. fishermen are required under U.S. law to follow stringent conservation measures to protect fish stocks, other marine life, and ocean ecosystems. This is an acceptable standard, but it does come at a cost. This would not be a problem if we were competing with fish from other nations abiding by the same conservation and management standards, but we are not. The World Trade Organization (WTO) has held that many conservation measures are "impediments to trade" and has struck them down. Thus, U.S. fishermen have to abide by stringent conservation measures-which we believe in-but our competitors do not, thereby placing us at a competitive disadvantage.

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Last year's farm bill requires country-of-origin labeling and, for fish, a requirement that they be labeled as "wild" or "farmed." Those types of national labeling requirements, including even FDA requirements for labeling fish with food coloring or state requirements for labeling fish for mercury content, could be viewed by the WTO as trade impediments.

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... there is a big push among some large chemical and biotech firms to promote genetically modified food products. It's not just soy or corn. Transgenic fish are on their way. Even if nations or states decide to prohibit or control genetically engineered fish to protect native natural stocks or the environment, the WTO could overrule them. Who elected the WTO?

Dolores Huerta, United Farm Workers of America
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Free trade, as exemplified by NAFTA, has hurt hundreds of thousands of farmworkers here in the U.S. Since NAFTA, we have seen new waves of workers emigrating from the coffee growing regions of Veracruz, Mexico, where they were once small family coffee farmers. The free trade of coffee on the world market has destroyed the price coffee buyers once paid small family farmers. As a result, they are no longer able to support themselves and their families off the revenue generated from the coffee they grow, forcing them to leave their farms, risk their lives crossing the border to the U.S., and seek employment on farms in this country.

... This displacement is not only limited to coffee growers. is estimated that 1.75 million Mexican nationals have been displaced due to free trade. Throughout Mexico, thousands of small family farmers grow corn for their own consumption and for sale within Mexico. These farmers, however, cannot compete with the corn from the U.S. In 2001, U.S. corn exporters dumped over five million tons of corn on the Mexican market at 25 percent below market cost. The Mexican government has reduced subsidies for corn production by 61 percent since NAFTA went into effect; meanwhile in the U.S., commodity payments continue to favor large multinationals that both grow and purchase corn and other grains from U.S. growers.

In the U.S., we have witnessed the dramatic decrease in the acreage of crops such as apples, asparagus, broccoli, cauliflower, mushrooms, grapes, and strawberries. In the last five years in the Willamette Valley of Oregon, three major food processors have closed their doors due to the availability of cheaper crops from other countries. In eastern Washington, the largest asparagus processor in the U.S. threatens to close, due in large part to the continued importation of tariff-free asparagus from Peru, which is far cheaper than asparagus grown locally.

Kate Bronfenbrenner, School of Industrial and Labor Relations, Cornell University
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... the impact of trade and investment policy and capital mobility on workers and wages goes well beyond the union organizing process. Each day U.S. workers need only pick up the newspaper or turn on the news to hear yet another story of a major company shifting operations or threatening to shift operations to Mexico, China, or other countries. In fact, in just the first seven months after PNTR was passed by Congress in October of 2000, our research found that more than eighty corporations announced their intentions to shift production to China, with the number of announced production shifts increasing each month, from two per month in October to nineteen per month by April. The number of jobs that the major media estimated were lost through these production shifts was as high as 34,900, fourteen percent of which were in unionized facilities. During this same period, another 148 corporations announced plans to shift production to Mexico, covering another 29,000 jobs, 48 percent of which were union. However, these were just production shifts and job losses announced in the major media. According to our estimates, the actual number of jobs lost through production shifts to China and Mexico averages between 70,000 and 70,000 jobs each year.

The U.S. companies that are shutting down and moving out of the country tend to be large, profitable, well-established companies. They are primarily subsidiaries of publicly held, U.S.-based multinationals, including such familiar names as Mattel, International Paper, General Electric, Motorola, and Rubbermaid. Most have been in operation for nearly half a century, and many are unionized.

Thea Lee, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
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"Free trade" has been sold to the American public and American workers as a cure for all that ails us. Proponents of so-called free trade-regional agreements like the North American Free Trade Agreement (NAFTA), World Trade Organization (WTO) negotiations, and the granting of permanent normal trade relations to China (PNTR)-have claimed that these agreements would create high-paying export-related jobs here in the United States, bring prosperity to developing countries, and spur economic growth and political stability worldwide. The outcome has been quite different.

Since NAFTA and the WTO were put in place (1994 and 1995, respectively), the United States has lost over 3 million jobs, according to estimates by the Economic Policy Institute, which calculates the employment impact of changes in the U.S. trade balance.

Advocates of NAFTA promised better access to 90 minion consumers on our southern border and prosperity for Mexico, yielding a "win-win" outcome. Yet in nine years of NAFTA, our combined trade deficit with Mexico and Canada has ballooned from $9 billion to $87 billion. The Labor Department has certified that more than half a million U.S. workers have lost their jobs due to NAFTA, while the Economic Policy Institute puts the trade-related job losses at over 700,000. Meanwhile, in Mexico real wages are actually lower than before NAFTA was put in place, and the number of people in poverty has grown.

Since Congress granted China permanent normal trade relations in 2000 (and China acceded to the rules of the WTO), the U.S. trade deficit with China has grown by almost 25 percent, hitting a staggering $103 billion last year-our single largest bilateral deficit. Meanwhile, the Chinese government continues to arrest and brutally repress workers who advocate for independent unions or better working conditions.

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