Donald Trump gallops, once again, to the defense of the American worker, this time on the matter of free trade treaties, specifically the North American Free Trade Agreement (NAFTA) and the proposed Transpacific Partnership (TPP).
There will be people who will swallow this hokum, in spite of the improbable fact that it is being promoted by a billionaire with worldwide financial investments and often abusive corporate practices. But with friends like Trump, U.S. workers don’t need enemies.
Trump correctly states that NAFTA and the TPP are problems, and that Democratic Party administrations and politicians have promoted them (he forgets to mention that many Democratic Party politicians have opposed them very strongly, and almost all Republicans have promoted them to the hilt). But where Trump really shows his true colors is on how he characterizes the relationships among countries that exist in NAFTA and would exist in the TPP. True to form, Trump twists the facts about these treaties to support his xenophobic narrative about crafty foreigners taking advantage of the United States, and weak U.S. leaders (mostly Democrats) passively or treacherously allowing them to do so. This reverses the real power relationships.
Take NAFTA, for starters. Mexico agreed to NAFTA at a point when the Mexican government was in the hands of particularly corrupt people, and when the Mexican model of stimulating the growth of domestic industry by import substitution had run into difficulties, in part because government overestimates of revenues from the country’s main export product, oil. NAFTA was then pushed on Mexico by international monopoly capital and also by the United States, during the government of George H.W. Bush, and subsequently signed by Bush, Mexican President Carlos Salinas de Gortari, and Canadian Prime Minister Brian Mulrony. This deal was also made possible because organized labor in Mexico had been tamed by years of repression, and because Mexico’s economic and political elites saw an opportunity to make a fortune by positioning themselves as intermediaries between U.S. based monopoly capital and the Mexican economy. Labor in the United States and Canada opposed the deal, as did the left and independent unions and farmers’ organizations in Mexico. NAFTA required, permitted and encouraged the privatization of many state sector entities in Mexico. This made a handful of Mexican entrepreneurs very rich. For example, Carlos Slim Helu became the richest man in the world by buying up telecommunications systems at fire sale prices. Mexico got more billionaires, overnight, than it ever had in its whole history.
But people like Carlos Slim are less than one percent of the Mexican one percent. What about the other 99.9 percent of Mexicans (out of a population of 122 million today)?
There were a few sectors that could be classed as winners, but many more losers.
The plan of NAFTA for Mexico was to drive millions of grain-producing small farmers off the land by flooding Mexico’s markets with U.S. agricultural produce. To achieve that, Mexico had to reduce, to the point of actual elimination, its tariffs on imports of wheat, maize, and other agricultural products from the United States and Canada.
Does Trump want to talk about dumping? In many cases, the agricultural products with which the United States flooded Mexico were generously subsidized by U.S. taxpayers. There was no way Mexican farmers could compete with this tsunami of imports. So some were driven off the land completely and went looking for jobs in the cities. This was part of the plan; so many job seekers in the cities were supposed to drive down wages, making Mexico more attractive for Foreign Direct Investment, or FDI. This had already been tried with the “maquiladora” (assembly plant) zones along the U.S. Mexico border, now Mexico became one large maquiladora zone. Not only basic agriculture but also other industries in Mexico could not compete with all this, and in the end, there were not enough jobs in industry to absorb the work force that had been pushed off the land.
Another feature of NAFTA was the idea that grain farmers pushed off the land could become prosperous by cultivating specialty fruits and vegetables for the U.S. and Canadian markets. Indeed, many impoverished indigenous farmers from Southern Mexico have ended up working in fruit and vegetable production for export, but not as owners of their own farms but as superexploited and maltreated farm laborers. Last year, the horrible conditions on such farms in Baja California led to a massive, militant rebellion and strike (one result of which is the ongoing boycott against Driscoll brand berries).
So NAFTA made a few Mexicans rich, made some very big U.S. and multinational corporations even richer than before, and harmed workers in all three participating countries, but more than anything harmed Mexican small farmers and workers. NAFTA and related policies are at the root of massive increases in Mexican undocumented immigration to the United States (undocumented, because the United States does not give visas to displaced and impoverished Mexican farmers) and also stimulated the problem of drug cartels, as poor farmers found they could no longer support themselves growing food crops and began to grow marijuana and other supply-chain crops for the drug trade instead.
NAFTA typifies the way the rich capitalist countries relate economically to the poor countries of Asia, Africa and Latin America. Who benefits is monopoly capital and especially the rich elites of the wealthy capitalist countries such as the United States. The mass of the people of countries like Mexico do not benefit.
And the TPP would be another NAFTA on a massive scale, but the chief losers would be poor people in countries that are already poor and getting poorer.
It is indeed the case that multinational corporations keep down wages in the U.S. by outsourcing production to poorer countries in the certainty that by doing so, they can pay radically lower wages and worry much less about labor, environmental and regulatory laws. This is why such corporations are terrified by phenomena like labor union militancy and movements toward socialism in the poor countries whose people they exploit. And international working class unity scares them most of all.
One of the best things that could happen for U.S. workers would be if this imperialistic corporate game were broken up, which can only happen when workers and other regular folks in all countries form a united front of solidarity against the corporate elites. To disparage foreigners and accuse them, in effect, of being malicious job-thieves impedes the creation of this unity, which is probably the reason people like Trump engage in the practice.
There are other things wrong with Trump’s demagogy on the subject of free trade. Trump carefully conceals other evidence that indicates other real reasons, and real culprits, in the suppression of wages of U.S. workers. In a response to Trump’s speech, Lawrence Mishel of the Economic Policy Institute, the organization from which he borrowed much of the data he used to make his case, points out some of the deceptions. “Missing from his tale is the role that corporations and their allies have played in pushing this agenda, and the role the party he leads has played in implementing it,” writes Mishel. “After all, NAFTA never would have passed without GOP votes, as two-thirds of the House Democrats opposed it. Furthermore, Trump has heretofore ignored the many other intentional policies that businesses and the top one percent have pushed to suppress wages over the last four decades. Start with excessive unemployment due to Federal Reserve Board policies that were antagonistic to wage growth and friendly to the financial sector and bondholders…..Add in government austerity at the federal and state levels-which has mostly been pushed by GOP governors and legislators-that has impeded the recovery and stunted wage growth. There’s also the decimation of collective bargaining, which is the single largest reason why middle-class wages have faltered.” Mishel goes on to point out that Trump has taken wrong positions, or no position, on all of these issues, for example opposing the $15 minimum wage.
As usual, Donald Trump is a huckster of fool’s gold. We should not let ourselves be fooled.
For more on this subject, readers may wish to check out the June 30, 2016 article by Mark Gruenberg on the Democratic platform and free trade.