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Ten years have passed since the North American Free Trade Agreement (NAFTA) went into effect. Dozens of anniversary reviews and analysis have been published (http://mhssn.igc.org/nafta18.htm).

Almost all of the reports have concluded that NAFTA has produced benefits for transnational corporations, while for everyone else – workers, family farmers and small businesses in all three countries, the social and ecological environment on the U.S.-Mexico border – NAFTA has been a net loss. The much-heralded "labor side agreement" – the North American Agreement on Labor Cooperation, or NAALC – has been a particular failure in protecting the rights, health and safety of workers in all three nations, but especially in Mexico.

In economic terms, NAFTA has been a great success for U.S.-based transnational corporations. Mexico’s exports rose 600 percent between 1993 and 2002, and foreign direct investment tripled between 1985 and 2002, rising to $55 billion in the 1994-2002 period. Labor productivity in Mexico has risen 45 percent since 1995. Mexico’s economy has become completely interlocked with its northern neighbor, as 65 percent of Mexico’s imports come from the U.S. while 89 percent of exports go to the United States.

As a model of development – Mexico’s promised ascension to the "First World" – NAFTA has failed completely, as the per capita gross domestic product of Mexico was the same in 2003 as it was in 1980. Only 4 percent of the inputs for maquiladora production in 2002 were of Mexican origin, meaning little or no growth of domestic industry. More than 40 pecent of the U.S.-Mexico trade is intra-corporate trade within divisions or subsidiaries of the same company.

Both absolute and relative levels of poverty have grown in Mexico since NAFTA went into effect. Of the 100 million plus Mexicans, 54 million now live in poverty (less than $2 a day), while 21 million live in extreme poverty (less than $1 a day). In December 2002, Mexico’s Labor Department reported that 75 percent of the economically active population had incomes below that needed to meet basic necessities of life – the equivalent of five minimum wages. Most maquiladora workers earn between two and three minimum wages. There are 19 million more Mexicans living in poverty today than 20 years ago.

A BROKEN SYSTEM

Under the NAALC, 28 cases were filed with National Administrative Offices in Canada, Mexico and the United States. Fifteen of these were investigated by the NAO of the country receiving the complaint, and seven of these related to workplace health and safety issues. The net result of these seven cases has been no gains for any other workers who filed them (such as correction of hazards described in the submissions) and no significant changes in government enforcement of existing regulations.

The NAALC established a long, drawn-out process of numerous steps, several with no time deadline or action requirements, in which the workers and NGOs who filed the complaints were excluded from participation after their initial presentation of the complaint. Complaints cannot be made about the inadequacy of a country’s workplace safety regulations, but only about the "persistent failure" of one of the three governments to enforce its own existing regulations.

None of the complaints went beyond the first of five steps after NAO confirmation of the validity of the allegations. That step is "ministerial consultations," closed-door meetings between government secretaries of labor without deadlines or requirements for action. All of the health and safety NAALC cases which had not already been "resolved" by Ministerial Consultations were terminated in 2002 by the formation of a "Tri-National Working Group on Occupational Safety and Health."

The Working Group consists solely of government functionaries who meet in private session and who have held several public forums on generic topics that have little or nothing to do with the substance of the NAALC complaints.

In the most recent study of the NAALC process, UCLA researcher Linda Delp concluded the failure to produce any meaningful results is due to "1) limitations inherent in the NAALC as negotiated, 2) lack of political will to address the problems that have come to light and, 3) refusal to include workers and their advocates in discussions to improve workplace conditions."

CROSS BORDER SOLIDARITY

If there is one positive result from the NAFTA process, it is the explosion of cross-border organizing and solidarity between grassroots organizations in the three NAFTA countries. Since 1994 there has been a tremendous growth of collaboration and joint projects between labor, environmental, occupational health, women’s, community and human rights organizations in Canada, Mexico and the United States – all attempting to deal with the lack of protection for labor rights and the environment under NAFTA and its labor and environmental side agreements.

This cross-border solidarity was the source of the only real victory for labor rights and workplace safety in the maquiladora sector during the 10 years of NAFTA: the Kukdong case. Kukdong, now MEXMODE, is a Korean-owned garment manufacturer which has produced for Nike, Reebok and other international brands selling in the U.S. market. In 2001, workers at Kukdong began organizing an independent union and experienced all the illegal obstacles placed in the path of workers in Mexico – illegal firings, widespread intimidation, "production layoffs," threatened and actual violence.

The Kukdong workers hung in there, but the key to success was a "perfect storm" of pressure exerted on the Korean operators by U.S. student and anti-sweatshop groups; "third party" monitoring organizations like the Fair Labor Association, International Labor Rights Fund, and Workers Rights Consortium; and by Nike and Reebok. As a result of this unprecedented, multifaceted campaign, the plant operator recognized the independent union, improved plant safety, and actually signed a contract with the union. A second, improved agreement was signed this year.

It is notable that this singular positive development occurred completely outside the NAALC process and only as the result of tremendous and persistent pressure from non-governmental organizations and the workers themselves. Such "perfect storms" cannot be expected to occur often, however, so more systematic elaboration and enforcement of labor rights protections must be incorporated into free trade agreements, if the lessons of NAFTA’s "toothless" side agreements are to be learned for the future.

These rights protections should include:

• incorporation of a step-by-step "upward harmonization" of labor standards, including OHS, between treaty partners;
• inclusion of health and safety as one of the International Labor Organization’s "core labor rights";
• establishing a mechanism to sanction companies that violate internationally recognized workers’ rights; and
• financial resources (such as the proposed "Tobin tax" on global financial transactions), technical assistance and technology transfer to governments in the developing world so they can actually enforce national and international standards.
  

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