New Report: NAFTA's Broken Promises to Create U.S. Jobs
CHRIS MCGINN
NEW REPORT DOCUMENTS NAFTA'S BROKEN PROMISES TO CREATE U.S. JOBS
New Report Clouds Launch of NAFTA Expansion Campaign with 2/26 Chilean
President's Washington Visit
Washington D.C.....A new report by Public Citizen's Global Trade Watch
finds that the North American Free Trade Agreement (NAFTA) has failed to
deliver on the 1993 promises of its corporate and political advocates to
create new U.S. jobs. Ninety percent of the NAFTA corporate backers'
specific promises to create new U.S. jobs under NAFTA have failed to come
true.
"Actual U.S. jobs created under NAFTA remain as elusive as Bigfoot and the
Loch Ness Monster, said Joan Claybrook, President of Public Citizen. "The
real life record is that while the promised jobs have failed to
materialize, existing U.S. jobs continue to be lost to NAFTA," Claybrook
said.
"With NAFTA job loss growing and a huge new NAFTA trade deficit, we asked:
`Show us the jobs," said Lori Wallach, director of Public Citizen's Global
Trade Watch. "More than 600,000 Americans have lost their jobs due to
NAFTA. NAFTA is not creating the new jobs promised by its backers. The
public deserves the truth about NAFTA's broken promises," Wallach said.
Public Citizen's Global Trade Watch interviewed more than 80 firms that
made specific NAFTA job creation and export expansion promises in 1993. As
leading NAFTA promoters with promises listed in pro-NAFTA reports or
testimony, are most likely to embody NAFTA's promised benefits. The report,
NAFTA's Broken Promises: U.S. Job Creation Under NAFTA" reveals instead a
collection of broken promises cutting across geographic and industrial
sectors. The report finds:
* 60 of 67 company-specific promises were broken: the promises did not come
close to being fulfilled.
* That is, 89 percent of companies we contacted had not made any
significant steps towards fulfilling their 1993 NAFTA promises of U.S. job
creation or export expansion.
* Ninety percent of the NAFTA advocates promises to increase U.S. jobs (46
of 51) have been broken; 87 percent of the promises to increase U.S.
exports (14 of 16) have been broken. The actual number of jobs created due
to NAFTA is tiny fraction of the number of jobs lost because of NAFTA.
* One narrow Labor Department NAFTA unemployment program shows that since
this report's first edition in September 1995, NAFTA-related job loss
increased at least 276%. Jobs lost due to a "shift in production to
Mexico" from this groups has increased at least 480%.
* Five companies claim to have kept their specific promises to create new
jobs due to NAFTA. Zenith, created certain U.S. jobs since NAFTA, but has
a net NAFTA job loss of more than 290. Another firm reported creating 10
new jobs and the third reported creating 20 new jobs. One of the two
companies which kept a promise to increase exports to Mexico, Springs
Industries, a South Carolina textile manufacturer, was certified by the
Department of Labor as having laid off 200 workers at their City of
Industry, California plant due to a "shift in production to Mexico."
* NAFTA's Broken Promises also reveals that a number of companies,
including Allied Signal, General Electric, Johnson and Johnson,
Kimberly-Clark (formerly Scott Paper), Lucent Technologies (formerly AT&T),
Mattel, Proctor and Gamble, Whirlpool, Xerox and Zenith, that made specific
promises to create or maintain jobs, have all laid off workers because of
NAFTA as certified by the U.S. Department of Labor s special NAFTA
unemployment assistance program (NAFTA TAA).
Companies responses fell into three categories: (I) 7 companies that have
kept their pre-NAFTA promises; (ii) 59 companies that have broken their
promises; and (iii) 17 companies that made significant promises, but were
unwilling or unable to provide current data to our interviewers. Public
Citizen conducted the interviews with the identified companies in
conjunction with The Multinational Monitor, an international news magazine
published by Essential Information, Inc.
Public Citizen's report examined the promises of pro-NAFTA companies. The
report did not focus on the more than 1,400 firms in 48 states where
workers have filed petitions with the Labor Department as having lost jobs
due to NAFTA.
As of February 19, 1997, the Labor Department certified 109,384 workers as
qualified for assistance under the one narrow NAFTA unemployment program,
NAFTA-TAA. These numbers represent the tip of the iceberg of NAFTA job
losses because the NAFTA-TAA program is only available to some workers in
some industries, and many workers file for assistance under other, better
known and less complicated programs. For example, last year Guess Jeans
shifted much of its Los Angeles production, to Mexico. Yet, no L.A. Guess
facility or Guess contractor filed for assistance.
Total NAFTA job loss is estimated at over 600,000. The combination of NAFTA
and the new, low peso value has spurred relocation of high-paying U.S. jobs
into the Mexican maquiladora sector. Employment in Mexico's Maquiladora
plants increased 48% under NAFTA. Under NAFTA, a 1993 $1.7 billion trade
surplus with Mexico crashed into a record new NAFTA trade deficit of $16.3
billion in 1996, breaking the previous record $15 billion deficit of 1995.
Under NAFTA, the U.S. is suffering trade deficits twice as large as during
the last Mexico economic crisis in 1982. Through the current crisis, Japan
and the European Union have maintained trade surpluses with Mexico.
The Clinton Administration plans to launch its effort to expand NAFTA to
the rest of Latin America, starting with Chile with a visit on February 26,
1997 by Chilean President Eduardo Frei.
"Expand NAFTA? They must be kidding," said Wallach. "Three years of
evidence shows that NAFTA has been terrible failure for the people of North
America. NAFTA has failed -- it needs to be replaced.
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