Subject: LaRouche/Bevel pamphlet: part 17

From: [email-masked] (John Covici)
Date: 22 Oct 92 9:40:44 GMT

<                       - Chapter 14 -
- Why LaRouche Calls NAFTA `Auschwitz Below the Border' - 

On August 12, 1992, officials of the Mexican, U.S., and
Canadian governments shook hands on a treaty to break down
all tariff and other barriers to complete ``free trade'' in
North American--the so-called North American Free Trade
Agreement, or NAFTA. George Bush has been pushing for NAFTA
since he came into office, and has made his support of NAFTA
a central plank of his reelection campaign. The Democrats,
led by Bill Clinton and House Majority Leader Richard
Gephardt, Senate Finance Committee Lloyd Bentson, and others,
agree in all essentials with Bush, and have backed NAFTA
since May of 1991. Ross Perot, likewise, supports free trade.
All agree in claiming that the treaty will help launch an
unprecedented era of economic prosperity across the
continent, creating new markets for exports, and new jobs for
Americans. 
   Nothing could be further from the truth. 
   As leading officials of the U.S. trade union movement
have already asserted, NAFTA is a frontal attack on what is
left of the nation's labor movement. But it is more than
that. It is a blueprint for looting and destroying the labor
force of all of North and South America, to prop up the
bankers' bankrupt financial institutions and unpayable
foreign debts. Since 1982, the International Monetary Fund
(IMF), the international banks and the Western governments
led by Washington, have enforced a brutal regime of debt
looting, extracting from the impoverished economies of
Ibero-America over $250 billion in interest payments alone,
even as the debt rose. The IMF has forced every government to
slash wages, cut social services, sell off government
industries, lay off millions of workers, and cripple economic
investment. 
   Now, NAFTA and free trade are intended as the next step,
to turn the entire continent into one huge plantation, worked
by slave labor, to produce wealth under a new colonial system
for export to the United States. NAFTA is intended above all
to lock Mexico into this arrangement, by international treaty
agreement, such that no subsequent government could reassert
Mexico's traditional nationalism and try to back out of the
arrangement. The intent is to extend free trade agreements to
the rest of the hemisphere as rapidly as possible, and in
this way keep the bankrupt international financial system
afloat for another brief period. 

                - NAFTA Means Slave Labor -
   A look at the condition of Mexican workers in the
unregulated factories along the U.S.-Mexican border--the
so-called {maquiladoras}--gives us a picture of the future
intended for all Mexican workers--and soon, for workers
throughout the continent. The {maquiladoras} are plants set
up under a special arrangement 25 years ago that removed most
tariffs on goods exported from the U.S., processed in Mexico,
and reexported to the U.S.--exactly what NAFTA will expand to
all industries. The conditions of these ``runaway shops'' speak
for themselves, as documented by many groups, such as the
AFL-CIO, other labor, church, social welfare, and
environmental organizations (see {{Figure 1}}): 
   @sb^Wage levels are abominably low. Contrary to some
claims, the average wages paid by the {maquiladoras} are far
below even the already abysmally low wages paid in the
non-{maquiladora} manufacturing sector of Mexico. According
to AFL-CIO figures, average {maquiladora} wages are
$.98/hour, compared to $1.56/hour for manufacturing in the
rest of the country. But many maquiladora workers receive
substantially less even than $.98. {{Figure 2}} contrasts
this low, and declining, {maquiladora} wage to the average
manufacturing wage in the United States, which has risen
slowly over the years. While in 1980, the wage differential
was about 5:1, it is now worse than 11:1. And even these
figures understate the comparison, as some U.S. workers still
receive fringe benefits up to 50 percent the value of their
wages; the {maquiladora} workers receive none. Meanwhile, the
average Mexican's consumption of staple foods has dropped
considerably ({{Figure 3}}). 
   @sb^The profile of the {maquiladora} labor force reads
like something out of Charles Dickens or New York City's
tenement factories before the first child labor laws at the
turn of the century. Two-thirds of the 500,000 workers in
them are females, and most of these are young girls, either
trying to supplement the income of desperately poor families,
or earning their first living away from home any way they
can. Turnover rates in the {maquiladoras} reach 120 percent
per year. 
   @sb^Working conditions are also 19th-century, with
widespread violation of worker safety laws, blatantly unsafe
working conditions, failure to inform the workers of hazards,
failure to use proper protective devices on machinery, and
other abuses amply documented by others. 
   @sb^Living conditions are crushingly poor, with the vast
majority of the 500,000 workers, plus dependents, living in
the so-called {colonias,} urban slums reminiscent of Brazil's
notorious {favelas.} Almost none of these residents have
indoor running water, many do not even have access to running
water at all, and drink from water collected in huge barrels
formerly used by local companies to contain toxic substances.
Sewage facilities are almost unknown in the {colonias,} and
open sewage runs through the camps. Conditions, according to
first-hand observers, are as squalid and hideous as anywhere
on earth today. It is scarcely an exaggeration to call them
concentration camps. Needless to say, health care and
treatment are all but non-existent as well, making these
camps ripe ground for cholera and other epidemics, which,
once unleashed, will not respect national borders. ({{Figures
4, 5}}). 
   Ciudad Jua@aarez, where fully one-third of all the
{maquiladora} workers live, graphically illustrates the
situation. 315 {maquiladoras} employ 135,000 workers, 65
percent of them women, 10 percent under 16 years of age.
Wages are $3.60 a day, and turnover is so high there is a
constant need for more workers. The city has been destroyed
by the {maquiladora} plague. Teachers there earn one-third of
their real wage a decade ago, and now spend more time earning
income in the informal economy than they do teaching--the
schools have become public markets for their wares. Housing
rents are double the levels across the Rio Grande in El Paso;
incomes are less than one-tenth the U.S. levels. 
      NAFTA will turn all of Mexico into one giant maquiladora.
It will also be used to smash the U.S. labor
movement, collapse wages, and eliminate a million or more
industrial jobs over the next few years. U.S. manufacturing
companies have been fleeing to Mexico for the past several
years, and many more are expected to follow as soon as NAFTA
is passed. Many more are already using the threat of pulling
up stakes to force their workers to accept lower wages and
other ``give-backs.'' In the context of the rapidly deepening
depression in the United States, this threat will become more
and more effective in sharply lowering wage levels,
eliminating health and safety provisions for workers, and
effectively eliminating the right to strike or bargain
collectively. 
   This process is already sweeping Mexico, as the Mexican
government has launched an assault to smash its labor
movement in order to attract foreign investment. In August,
the Government decertified the largest autoworkers union in
the country, at a Volkswagen plant in Puebla, allowed the
company to fire all the workers, and then to rehire only some
of them, who had to join a new, company union, with total
loss of seniority and benefits. Mexican President Salinas de
Gortari has made clear he wants an end to collective
bargaining. 
   In the U.S.A., the machinations of the auto companies are
paradigmatic of what will happen to unions, wages and working
conditions in the U.S. Citing huge losses, GM has led the
field in plant closings, with more to come. The message to
workers is clear: The unions are to give up the income
security and health insurance components of the contract, and
accept wage cuts, or face the flight of investment and
employment to Mexico. GM spokesmen off the record have made
clear how they view matters: with U.S. auto worker wages
averaging $16.50 an hour, and GM's 42,000 workers employed in
Mexican {maquiladoras} averaging $1.10 per hour, they say:
``The discrepancies are huge. Even with this subsidy from
Mexico, if auto sales in the U.S. keep collapsing, we will
not be able to produce cars in the United States.'' 
   Chrysler is perhaps in worse financial shape. Now the
company is under pressure from the government's Pension
Benefit Guaranty Corporation. Chrysler has $3.62 billion in
unfunded pension liabilities, which are due, but cannot be
paid. Chrysler, like GM, wants to reopen its contract. 
   The textile industry, for its part, fears that with the
elimination of remaining import tariffs on certain classes of
goods produced in Mexico, the industry in the U.S. will be
wiped out, perhaps in its entirety. 
   Many other industries are equally threatened, including
electronics, light machinery, and chemicals, not to mention
the entire U.S. farm sector. As one NAFTA ideologue
succinctly put it, U.S. companies will tell their unions:
``We don't want to move to Mexico. But in Mexico they want 57
@ct an hour and you guys want $15. Now you're going to have
to meet us half way, or at least part of the way.'' 
   NAFTA is not limited to manufacturing, either. By one
provision, Mexican truck drivers, who earn one-tenth the wage
of American teamsters, will be permitted to drive in the
United States, threatening the jobs of hundreds of thousands
of teamsters, and the wage levels of all truckers. By other
provisions, U.S. fruit and vegetable farmers will find
themselves competing with low-wage Mexican plantation labor
and stand to be wiped out. The agriculture secretary for the
State of Florida has warned that Florida agriculture stands
to collapse if NAFTA is passed in its present form. 
   Where does this leave the United States? {{Table 1}}
summarizes the employment and wages of some targeted sectors.
Although no precise forecasts are possible on the employment
side, if just 10% of employment in the textile and clothing
industries were displaced to Mexico, in all likelihood a
conservative estimate, that would represent a loss of 146,000
jobs--which would grow to 292,000 jobs if another 10% fled in
the future. In the auto industry, a 10% shift of employment
would lose 60,000 high-paying auto jobs, and hundreds of
thousands of ancillary jobs in the industries that supply the
auto industry. And so on. While the Bush administration only
concedes that some several hundred thousand jobs may
disappear (and they lyingly claim new jobs will be created to
replace them), most competent estimates indicate that at
least ten times this number, well over 1,000,000 jobs, are
in jeopardy in the next several years. 
   This is a recipe for upheaval and chaos inside the
United States. 

                 - NAFTA Loots Mexico Too -

   Although it hurts the U.S., NAFTA doesn't thereby help
Mexico, as some U.S. opponents of NAFTA maintain. NAFTA is a
``negative sum'' arrangement--everyone loses, except for the
banks--as its key provisions make clear: 
   1) lifting, minimizing, or phasing out tariffs and
import quotas; ending other national border controls such as
inspection, license control of cross-border drivers, etc.
This is what will encourage runaway shops to relocate from
the U.S., but the only effect in Mexico will be to pay slave
labor wages to some workers. But many more Mexican jobs will
be lost than gained through the effect of cheap imports from
the U.S.A. in other industries which have already wiped out
hundreds of thousands of smaller companies in Mexico that
used to serve the domestic market. 
   2) lifting, minimizing or phasing out impediments to
foreign ownership and/or control of resources, foreign
companies and individuals doing business in Mexico. Already,
billions of dollars are flowing from the U.S. to Mexico, not
to invest in new industries, but to purchase existing
industries, starting with those the Mexican government has
``privatized,'' sold off to foreign investors. Many more
billions have flowed into speculative sectors such as the
stock market. Mexico is seen as a place to be looted, not
genuinely invested in. 
   3) opening up Mexico's banking sector, in particular, to
foreign involvement and ownership. U.S. banks will be allowed
to set up subsidiaries, and also to acquire 100% interest in
Mexican banks. The U.S. banks will gobble up Mexico's
financial institutions, allowing them to suck capital out at
will. Also, NAFTA will allow U.S. subsidiaries in Mexico to
operate in the United States under Mexican, not U.S., banking
law, thereby avoiding all U.S. banking regulation, including
the Glass-Steagle and other regulatory acts. 
   4) opening up much of Mexico's petroleum sector. While
lip service has been given to maintaining Mexico's national
control over the exploitation of petroleum, as required by
the Mexican constitution, most of Mexico's oil refining and
petrochemical sector is now open to foreign investment, and
foreign firms can participate with Pemex, the national oil
company, under special terms that augur the near-term opening
up of even the oil exploration and exploitation sector to
foreign capital. 
   5) Mexican farmers will be subject to competition from
U.S. grain producers, which will undercut the livelihood of
several million Mexican peasant farmers, who will be forced
off the land and into the cities looking for work. A large
percentage of these will also attempt to cross the border
into the U.S., in search of mere subsistence. It will also
hit the U.S. cattle industry, as the U.S. ships cheap feed
grain to Mexico to feed Mexican herds that are then
reexported back to the U.S. 

         - Behind NAFTA: The Push for Free Trade -
   About 15 years ago, the Council on Foreign Relations
publicly launched the present campaign for ``free trade'' in
North America, and worldwide, on behalf of the Anglo-American
financial elite, as part of a drive to wipe out national
boundaries and impose new and deeper private looting
arrangements to back up their own increasingly unpayable
debts, real estate speculation, and other worthless
accounts--now blowing apart in the 1990s. 
   The record is clear on free trade. It is a form of
centuries-old find usury. Over 200 years ago, the American
Revolution was fought, in part, against the London policy of
``free trade,'' and the theories of its advocate Adam Smith.
Under this policy, colonial America was told by the British
East India Company and the British crown that colonial
enterprises were forbidden to produce, export, or utilize
home-produced products such as nails, hats, and a list of
other proscribed manufactures. 
   Following the Revolution, leaders of the new nation,
from George Washington through Abraham Lincoln and McKinley,
were vigilant in their opposition to renewed attempts by the
British to attempt such ``free trade'' practices as dumping
goods onto the U.S. market, and undercutting American
producers. U.S. leaders instead supported selective
protectionism on behalf of fostering the domestic industrial
and agricultural base, for reasons of security and
prosperity. 
   Starting in 1986, Mexico began lowering tariff barriers
as part of the GATT (General Agreement on Trade and Tariffs)
effort to foist free trade on the entire world. Together with
the effects of paying $10-$12 billion a year in interest on
the foreign debt ({{Figure 5}}) and imposing a severe
IMF-dictated austerity program on the Mexican population,
Mexico suffered terrible effects, such as rises in disease,
malnutrition and impoverishment in Mexico. 
   Now the banking elite wants this process intensified by
treaty agreements, such as NAFTA and GATT. 
   In 1986, the GATT--the General Agreement on Tariffs and
Trade agency of the United Nations--convened in Punta del
Este, Uruguay, and began a GATT ``Uruguay Round'' of talks
aimed at producing a sweeping global treaty that would
override national rights ranging from banking to medicine
patents, and even to food and farm policy. The original
deadline for the treaty was 1990. When it wasn't met because
of dissension among GATT member nations, especially between
the Anglo-American bloc and continental Europe, the free
trade interests demanded negotiations continue, and talks
scheduled for fall 1992 mark the seventh year of sessions. 
   GATT represents on a global scale the same economic
warfare that NAfTA represents against Mexico and the rest of
Ibero-America. It is just as bad as NAFTA. Both must be
defeated. Although it is the 11th hour, it is still possible
to defeat NAFTA and GATT. These treaties and the Malthusian
policies underlying them must be reversed permanently, in
favor of pro-growth measures which will lead to the rapid
industrialization of the Americas--North and South. 

                - NAFTA: Myth and Reality -
   The Bush and Salinas de Gortari administrations have
launched a full-scale public relations drive to convince
their respective populations of the marvels of NAFTA. In
reality, each of their principal claims of the benefits that
will supposedly be achieved, is patently false. Chief among
these are: 
   {Myth #1}: NAFTA means more jobs for Americans.
U.S. exports to Mexico will increase sharply under NAFTA--by
as much as $14 billion, according to former Commerce
Secretary Robert Mosbacher. Since each $1 billion in exports
translates into 25,000 jobs for U.S. workers, he claimed,
NAFTA means millions of new jobs for Americans. 
   {Fact}: NAFTA means fewer jobs for Americans.
Vastly cheaper wage rates mean that U.S. runaway shops will
flee to the }maquiladora} zone, which will soon be
extended to encompass the entire nation of Mexico. As for an
export boom to Mexico, it won't happen. The market for
exported U.S. consumer goods is limited by the terrible
poverty of the majority of the Mexican population. The IMF
and Mexico's creditor banks will not permit it anyway: They
are demanding that Mexico export more and import
{less}, in order to pay off the country's gigantic
debt to the banks. 
   {Myth #2}: NAFTA means that U.S. investment will
pour into Mexico, and help Mexico develop. The Bush
administration is projecting rates of $5 billion per year and
higher. 
   {Fact}: Under NAFTA, most of the ``investment''
that will go into Mexico will be to take over existing plant
and equipment. It is a transfer of ownership into the hands
of foreigners, not the creation of new wealth. 
   {Myth #3}: NAFTA will create millions of new
jobs in Mexico and thus help stem the tide of illegal
migration across the border into the United States. 
   {Fact}: NAFTA will mean a net destruction of
jobs in Mexico. Domestic manufacturing will be wiped out by
the dumping of cheaper U.S. imports on the market. The only
jobs that will be created will be those in the expanding
{maquiladora} zone, under conditions so horrendous
that ``Auschwitz'' is the only word that properly describes
them. This will foster the very conditions driving desperate
Mexicans across the border looking for jobs in the United
States. 
   {Myth #4}: NAFTA will make the U.S. competitive
once again with Germany and Japan, by reducing the labor
component of manufacturing costs. 
   {Fact}: There is no doubt that the wage bill in
{maquiladoras} on the Mexican side of the border will
be far lower than in the U.S. today. But this will destroy
the U.S. economy, and, in particular, the educational and
technological training that comes with a higher standard of
living, which are the true sources of productivity and
competitiveness. 
   {Myth #5}: NAFTA will open up the Mexican
banking and financial sector and modernize it. This will
attract vast flows of international finance capital. 
   {Fact}: NAFTA's banking takeover will open up
the banking system of the Americas to all sorts of
speculative hot money flows--including those of the drug
trade. Such activity does not aid production; it destroys it. 

----
         John Covici
          [email-masked]