Making a Bad Deal Worse: How Trump’s NAFTA Renegotiation Will Hurt US and Mexican Workers

Al DiGiorno 🌽
Aug 24, 2017 · 11 min read

The first thing one has to grasp in order to understand the North American Free Trade Agreement is that despite its designation as a “free trade agreement,” its main goal was never simply to expand trade. After all, the U.S., Mexico, and Canada have been trading goods and services with each other for three centuries. Instead, NAFTA’s central purpose was to free corporations from laws protecting workers and the environment. It also paved the way for the rest of the neoliberal agenda in North America — the privatization of public services, the deregulation of finance, the dismantling of environmental protections, and the destruction of the independent trade union movement. The name of the game is always freedom for capital, and the strict rule of law for everyone else. Understood in this context, it should come as no surprise that the history of NAFTA is one of devastation and deprivation for all North American workers.

One of the major components of the agreement was that Mexican farmers would no longer be subsidized — but American farmers would. This allowed large American agricultural firms to flood the market with cheap goods, shattering the Mexican agricultural economy — to the point where Mexico is now a net importer of corn, a traditional staple in that country. Thousands of Mexican peasant farmers, now totally dispossessed, were forced to become laborers in the Maquiladora sweatshops that sprang up near the US border to manufacture cheap goods — goods that were now tariff-free — or else cross over illegally and try to survive as second class citizens in the United States. In the Maquiladoras, they face dangerous conditions and wages of just $8.50 a day. To come to the United states, they must abandon their home and take a dangerous journey, only to face the threat of deportation when they get here. This provision of NAFTA thus served a dual purpose for capital. First, it temporarily sated capital’s thirst for ever-expanding markets. However, it also served as a weapon of class war wielded by the capitalists against the working class. By proletarianizing peasant farmers in Mexico, capitalists could move production to where wages were lowest. This drives down wages for American workers, who are now forced to compete with the atrocious conditions of the Maquiladoras, and cripples labor’s ability to organize as a union and make demands.

Since NAFTA’s passage, workers have endured persistent structural unemployment, stagnant wages, and record income and wealth inequality. In the United States, total job losses as a result of NAFTA were estimated at 700,000 as of 2013. Reemployment was not nearly enough to make up the difference, and what little did take place was in low wage, non-union service sector and retail work as opposed to the relatively well paid (and unionized!) manufacturing jobs that were lost. In 1993, about 15% of American workers were unionized. By 2010, that number had fallen to 11%. When adjusted for inflation, median wages have been completely stagnant over that time span, despite steady annual productivity growth of 2 to 3%. As a result, in 2013, the richest .1% of families in the US owned about 22.5% of total wealth in the country, up from 12.5% when NAFTA was passed.

But the devastation caused by NAFTA has not been strictly economic. As I just pointed out, the wave of unauthorized immigration in the ’90s from Mexico to the US was driven largely by the policy changes associated with NAFTA, as dispossessed peasants crossed the border in search of employment. As NAFTA was being sold to the public, the ruling class promised that it would actually reduce immigration, as living standards in Mexico would rise. However, their actions reveal that this was a lie from the beginning. In fact, NAFTA explicitly authorized all three nations to take whatever actions they deemed necessary to close their borders and prevent freedom of movement. In 1994, the same year that NAFTA went into effect, the Clinton administration initiated Operation Gatekeeper, which expedited the deportation process and drastically militarized the border right here in San Diego, making the journey far more dangerous. The fact that these measures coincided with the passage of NAFTA was no mere accident. The ruling class knew the effect this would have on Mexican peasants, and ramped up border militarization in order to control the impending flow of migrants into the US labor market. Each successive president since Clinton has further militarized the border and built up the deportation machine. At the time of Operation Gatekeeper, there were around 4,400 Customs and Border Patrol agents. Today, there are over 20,000 — Obama alone doubled the size of the force. The increased enforcement has resulted in an estimated 10 thousand migrant deaths since 1994, and endless misery and fear for those that do make it across the border. Now, that apparatus is in the hands of a reactionary president that openly courts anti-immigrant and white supremacist hate groups.

NAFTA also opened the door to catastrophic environmental consequences. In Quebec, the St. Lawrence River is threatened by fracking. The Midwestern plains are being hit with oil leaks from the Keystone XL Pipeline. In Guadalcazar, Mexico, children are born with birth defects from toxic waste that the American corporation MetalClad refuses to clean up. Increases in export-oriented agriculture drive the consumption of fossil fuels, chemicals, and water. Environmentally damaging mining operations have been expanded in Mexico. NAFTA has fostered the integration of North American energy markets based on the development and trade in fossil fuels, including rapid expansion of Canadian tar sands. Environmental groups have observed higher levels of air and water pollution associated with the growth of maquiladora factories and relaxed emissions standards on trucks coming from Mexico to the US. Everywhere in North America, the environmental impacts NAFTA are visible.

In addition to NAFTA’s immediate impacts wreaking havoc on workers and the environment, the agreement also served as the template for the rules of the emerging global economy, in which the benefits would flow to capital and the costs to labor. The ruling elite of the United states and its trading partners applied NAFTA’s principles to the policies of the World Bank, IMF, and the World Trade Organization, and attempted to expand them even further with the now defunct Trans Pacific Partnership. These agreements and institutions are not just bad policy, they are fundamentally antidemocratic. All of them contain provisions that allow corporations or financial institutions to dictate the policy of sovereign nations. In the case of NAFTA, this takes the form of what’s called investor-state dispute settlements, or ISDS. According to this provision, corporations can sue signatory states for regulations that violate the terms put forward in NAFTA. In other words, the profits of these corporations come before the already limited democratic means workers have to reign in the worst excesses of capital. Here are a few examples of how ISDS functions: In the case of Ethyl vs. Canada, an American chemical company successfully sued Canada for 13 million dollars in compensation for a ban on the toxic gasoline chemical MMT — the ban was also lifted. Mexico was forced to pay Metalclad, a US waste management corporation 16.2 million dollars for not granting them a construction permit for a toxic waste facility — the same toxic waste facility whose pollution poisoned newborns in Guadalcazar.

So, NAFTA is bad. That brings us to the present question of renegotiation. Most workers in the United States understand instinctively that trade deals like NAFTA aren’t good for them. You don’t have to have an economics degree or be a steeled Marxist to see how the industrial heartland of the United States has been hollowed out by global capitalist development, and the devastation that has followed as a result. NAFTA’s failure to raise (or even maintain) living standards has become so apparent that opposition to the bill was essentially a prerequisite for a serious presidential run in 2016. Even Hillary Clinton was compelled to make tepid criticisms of the deal, despite the fact that her husband signed it into law. However, in the realm of mainstream politics there is no coherent framework for understanding how and why these trade deals function at the expense of the working class. Even Bernie Sanders, the leftmost major politician in the U.S., frames his opposition to the bill in vaguely economic nationalist terms. American politicians shipped our jobs overseas, he argues, selling Americans out in the process. What the socialist left can offer is an internationalist perspective and a class analysis that shows that the drive toward ever-increasing mobility for capital and ever tighter restrictions on immigration are part and parcel of the same project: the domination of workers by capital. By loosening regulations on their own actions, capitalists can exploit workers and the environment more than ever. By imposing strict controls on immigration, they can keep the labor supply just so, and keep an entire class of immigrants so oppressed they can’t effectively fight back against hyper-exploitative practices for fear of state violence. NAFTA is not a case of this country or that “winning” or “losing” a trade deal. It is an assault by capital against workers in all three countries. We are facing an international attack, and so our perspective and struggle must also be international.

Because this perspective was not on offer in the 2016 election, Donald Trump was able to insert his bright orange brand of demagoguery as the only viable alternative to the milquetoast Clinton liberalism that landed so many ordinary people in this mess. Trump’s rhetoric around NAFTA, as in all things, has been erratic. The only thing that has been consistent has been his hyper-nationalist tone. He lambastes our “weak” leaders for being taken advantage of by shifty foreigners, often combining these attacks with tirades against Mexican immigrants. During his campaign, he would brashly vow to pull out of the deal as one of his first acts in office. But since being elected, he has steadily backed away from that position to the point that he has now decided to use the “art of the deal” to make NAFTA better for the United States.

At first brush, Trump seems to present a difficult puzzle: an international businessman against free trade, and a waffler whose stated positions shift day to day. However, the people he has surrounded himself with and his policies so far can give us a good idea of what a renegotiation would look like under the Trump administration. Donald Trump and the nationalist wing of his cabinet have made a lot of noise about bringing jobs back to America. But this protectionist rhetoric is mostly just that — noise. There are 6 goldman Sachs alums in Trump’s cabinet, Wall Street fines are down 66 percent since he took office, and he signed an executive order mandating that two regulations be removed for every one signed into law. Despite what Steve Bannon might say, these are not the policies of a president prepared to crack down on global capital’s free reign. In fact, Wilbur Ross, one of the aforementioned Goldman Sachs alums and current US Secretary of Commerce, has publically stated that a renegotiation of NAFTA would be modeled on the Trans Pacific Partnership that failed to pass Congress during the Obama administration. That agreement was even more brutal than NAFTA — among other things it had even stronger ISDS provisions, strong patent provisions that would have potentially skyrocketed the cost of pharmaceuticals, and provisions to weaken internet privacy and net neutrality. Even if these people were to enact protectionist policies, it would only ever be to protect the interests of American capital, not American workers. Meanwhile, on the Mexican side of the border, the goals of capital for a renegotiation include privatization of oil, education and healthcare. To the North, Canadian president and liberal sweetheart Justin Trudeau has shown a keen interest in expanding fracking and oil exports. Under these circumstances, it is clear that any renegotiation will only make things worse for workers, the poor, and the environment.

Nevertheless, some sections of the American labor movement think that they can make gains by getting a seat at the negotiating table with Trump and the rest of the capitalist lackeys. This is magical thinking. The entire purpose of deals like NAFTA is to concentrate wealth and power in the hands of the capitalist class. Any new deal that had the opposite effect would simply be scrapped — there is just no way that the capitalist powers ultimately responsible for agreeing to these deals will act contrary to their own interests.

Others argue that we should oppose the renegotiation, but set the broader question of NAFTA as a whole aside. Attacking NAFTA now, they argue, will only bolster Trump’s ability to push through an even more ghoulish policy. Not only is this line utterly unprincipled, it doesn’t even work on its own pragmatic terms. It was the failure of NAFTA — or rather, its success in transferring wealth to the one percent — that paved the way for Trump’s economic nationalism. People all across North America already know that NAFTA screwed them — so pretending otherwise won’t work, as the failed Clinton presidential campaign clearly demonstrates.. The only thing that actually has the ability to stop Trump’s plan is a principled opposition to NAFTA as a whole.

So, how do we go about accomplishing this? Fortunately, we don’t have to start from scratch. If we look to our recent history we see that popular mobilizations against the TPP and the Free Trade Area of the Americas were able to stop those agreements. In each of these cases, the ruling class attempted to strike a backroom deal and then ratify it before the public had a chance to even learn what was in the agreement. These agreements ultimately failed not because of the differences among capitalists, but because ordinary people took it upon themselves to expose what they were doing, and then take to the streets to make it clear that these attacks would be met with mass resistance. In 2003, thousands of demonstrators convened in Miami to stop the Free Trade Area of the Americas despite violent police repression. The Trans Pacific Partnership was met with global opposition: A coalition of thousands of organizations formed to oppose the deal. Tens of thousands of people joined mass protests in Japan, Peru, Australia, New Zealand and other Pacific Rim nations. There was a more scattered but no less visible movement against the deal inside the US. People rallied outside the hotels and resorts that hosted the secret negotiations. Cancer patients were arrested protesting the TPP’s impact on healthcare. Internet freedom activists mobilized thousands of websites to bombard lawmakers with emails and phone calls demanding a stop to TPP’s assault on privacy and net neutrality. Advocates and academics worked tirelessly to reveal and explain leaked versions of the bill to the public. This movement dragged out negotiations by putting the would be conspirators behind the deal in the public spotlight and ultimately succeeded in laying TPP on its deathbed. Ordinary people tuned out the chorus of voices that told us that corporate power would always prevail in the end. And finally, we claimed our victory when TPP was rejected in Congress.

That will be the model for us today: mass protest movements from below that can drag these backroom deals out into the light and force the capitalists to abandon them. We need an international mobilization of workers and poor people that can tie together the labor movement, environmental movement, and indigenous rights movements. All of the attacks that workers face are inextricably linked, which means our struggles have to be too. Opposition to NAFTA and other capitalist “free trade” schemes is one of the flashpoints that can bring all of these struggles together in one place — because Trump and the capitalist class will ramp up attacks on all fronts with any new agreement. That is why we are calling for a press conference and rally here in San Diego on August 16th, and why we are building toward a cross border demonstration with our Mexican comrades in the Fall. Our goal is to stop this renegotiation, and then to go on and dismantle NAFTA altogether — but even that is not enough. So long as the global political economy is built on class domination, the ruling class will always devise new tricks to steal the wealth that we create. Ultimately, our movements have to be oriented toward a radically different future, a future where all can share in the fruits of our labor, a future called socialism.

)
Al DiGiorno 🌽

Written by

Building socialism one tweet at a time. I'm the Trot your mother warned you about.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade