Later this month, former President Bill Clinton will visit Grand Rapids to speak at the Economics Club of Grand Rapids annual dinner. In response to his visit, Media Mouse is continuing a series of pieces examining the legacy of Clinton. Yesterday we covered Clinton’s Iraq policy and today we will examine Bill Clinton and the North American Free Trade Agreement (NAFTA).
In his signing statement, President Clinton was praised by Vice President NAFTA as an issue that was able to “transcend ideology” and gain bipartisan support. Clinton compared the signing of NAFTA to the fall of the Berlin wall, while promising that “NAFTA means jobs.
American jobs, and good-paying American jobs.” Clinton promised that “NAFTA will create 200,000 American jobs in the first two years of its effect” and “a million jobs in the first five years of its impact.” Of course, this did not happen.
For residents of Michigan, the impacts of the NAFTA have hit close to home. As corporations have moved jobs outside of the United States to maximize profits by paying lower wages and to escape regulations, the economy in Michigan has suffered. According to the Economic Policy Institute, all fifty states have experienced job loss due to NAFTA, although Michigan is among the hardest hit states. The Economic Policy Institute has determined that Michigan lost over 63,000 jobs due to NAFTA. In a 2004 video produced by Media Mouse titled “The Adventures of the NAFTA Bunny,” Media Mouse documented several thousand jobs lost in West Michigan at area companies ranging from Electrolux (2,700) to Johnson Controls (885).
While explaining that “jobs moving to Mexico” is a result of NAFTA is commonplace in Michigan and around the United States, less examined is the role of Bill Clinton in passing NAFTA. NAFTA was negotiated and signed under the Bush administration, but was ratified in Congress in 1993 following an aggressive push by Bill Clinton who made NAFTA a major legislative priority. Clinton aggressively promoted NAFTA as part of his agenda despite public opposition of 2-to-1 against the trade agreement. Clinton joined the rest of his administration and corporate lobbyists in a “full-court press” for votes on NAFTA, making it a “do or die” vote. In order to secure the votes for its passage, Clinton aggressively lobbied Republicans and offered money for pork projects in exchange for votes, while organizing a series of ineffective “side agreements” that were designed to counteract opposition from the labor and environmental movements.
The ratification of NAFTA and its subsequent results fit within a larger foreign policy goal of the Clinton administration of advancing United States interests, summarized by Clinton’s Treasury Secretary who stated that “I’m tired of a level playing field…We should tilt the playing field for U.S. businesses.” Moreover, NAFTA helped to advance the interests of the global ruling class, with NAFTA making a significant amount of money for the ruling elite in government and the private sector. NAFTA was pushed with the support of the media system, despite the fact that much of the public was opposed to the deal. Clinton would continue passing similar trade deals throughout his administration, with the Clinton/Republican alliance pushing through the World Trade Organization (WTO) and China’s being granted PNTR. However, while the effects of NAFTA on workers in Canada, Mexico, and the United States as well as who the likely benefactors would be received attention in the alternative press at the time, the full story on NAFTA has still been largely ignored by the corporate media.
The effects of NAFTA has been the subject of a plethora of books, studies, and articles, and cannot be exhaustively covered within this article. The effect on jobs in the United States, mentioned previously, has been significant. The United States government has certified that more than 525,000 jobs were specifically lost to NAFTA as companies took advantage of provisions in NAFTA making it easier and more profitable to relocate to Mexico. Corporations based in the United States have also used the threat of moving to Mexico as a way of weakening unions and union organizing drives. Many of the workers who have been displaced by NAFTA have found significantly lower paying jobs in the service industry, which offers pay of twenty-three to seventy-seven percent less and few or no benefits. According to Public Citizen, “NAFTA has aggravated the problem of deindustrialization and helped perpetuate the stagnation of real wages for millions of hard-working Americans and their families.”
In Mexico, over 1.5 million farmers have lost their farm-based livelihoods due to the flood of United States corn, while wages in the manufacturing sector fell from an average of $5 per day to $4 per day. Prices paid to corn farmers, once the backbone of Mexico’s agricultural sector, have fallen by 70%. As a result, half of the Mexican work force works on less than $8 per day. Furthermore, a third of the 800,000 jobs created in Mexico by NAFTA–many in the low-wage maquiladora sector–have left Mexico and relocated to Asia. Thousands of Mexicans have been displaced from their homes due to changes in the agricultural sector, and have relocated to the border region where they live in poor conditions and work low-wage jobs.
NAFTA also has effects on national sovereignty and democracy. Rights and protections within NAFTA gave preferential treatment to foreign investors. In many cases, this treatment exceeds what is available under domestic law, with NAFTA provisions allowing corporations located within any of the three countries to sue the other countries over regulations–including health, zoning, or environmental regulations–that impede a corporation’s ability to make profit. This has happened, with Canada reversing its ban on a gasoline additive called MMT, which destroys catalytic converters and is a suspected neurotoxin, after U.S. Ethyl Corporation filed a NAFTA Chapter 11 case for $201 million alleging the public health policy violated its NAFTA rights. In Mexico, the government was required to pay U.S.-based Metalclad Corporation $16 million in compensation after a Chapter 11 claim that the denial of a municipal construction permit for a toxic waste facility in an environmentally sensitive zone near the city of Guadalcazar violated its NAFTA rights. Moreover, these cases are filed in secret under NAFTA’s Chapter 11 rules, making oversight next to impossible.