Sep 1 1997

Broken Promises

More than 400,000 lost jobs later, media still selling NAFTA

The benefits of the North American Free Trade Agreement were obvious to mainstream U.S. media back in 1992-93. The New York Times (7/21/92) said NAFTA promised “jobs, wealth and economic activity throughout the continent.” The Washington Post declared (9/14/93) that “the list of new opportunities and advantages is a long one,” while insisting (5/11/93) that “opposition to the agreement is rooted in dark forebodings almost comically out of proportion to any possible results.” The Wall Street Journal (8/7/92) predicted “lower prices on a wide variety of goods,” which Time (8/10/92) pointed out would especially help “low-income households.”

As criticism of the treaty mounted, notably from labor and environmental groups, mainstream media got defensive, running urgent editorials like “Stop Nibbling At NAFTA” (New York Times, 8/17/93), “Why Trade Can’t Wait” (Washington Post, 3/9/93) and “The Vital Treaty That Must Not Die” (L.A. Times, 3/25/93).

1997 marks three years since NAFTA took effect, and, by any standard, the results are decidedly less rosy than proponents predicted. Many of the critics’ concerns for workers’ wages and rights–on both sides of the border–and for environmental protections are now verifiable.

But when the Clinton administration’s three-year NAFTA “report card” gave reporters an opportunity to examine the controversial treaty’s wide-reaching effects, they didn’t take it. Having stumped hard for the pact, the U.S. establishment media are evidently uninterested in tracking its fallout, much less revisiting their own promotional claims.

Bait and Switch

Not even the boldest booster can deny the bare facts: U.S. exports did increase, by 36 percent to Mexico and 33 percent to Canada, between 1993 and 1996. But imports increased more–up 83 percent from Mexico, 41 percent from Canada–increasing the U.S. trade deficit by $39 billion.

Those import/export numbers presumably led the Clinton administration to backpedal from earlier claims: Issued quietly a week past the July 1 deadline, the official report claimed NAFTA had generated only a “modest positive effect” on the U.S. economy. The corporate-owned media followed that lead, producing a handful of stories that mirrored the administration’s upbeat tone.

Most accounts noted perfunctorily that Clinton’s evaluation was “likely to provide ammunition for both sides in the NAFTA debate” (L.A. Times, 7/12/97), but the anti-NAFTA ammunition went largely undescribed: Mainstream coverage overwhelmingly echoed Clinton’s accent on the positive and, in particular, the emphasis on total exports as the measure of NAFTA’s success, rather than balance of trade–even though balance is considered far more important than volume in determining the impact of trade on jobs.

Critics call the shift in emphasis an example of bait and switch. “During the debate, they said the overall trade balance would improve. Now that that hasn’t happened, they’ve changed their tune,” says Sarah Anderson of the Institute for Policy Studies (IPS). Along with the Economic Policy Institute, Global Trade Watch and other groups, IPS issued its own report card, “NAFTA at Three Years: The Failed Experiment.”

Establishment media also left unchallenged the administration’s attribution of the disappointing trade balance results to internal Mexican economic problems that had nothing to do with the pact. The New York Times (7/11/97), for example, referred matter-of-factly to “the deep financial crisis that engulfed Mexico in 1995 and turned a small American trade surplus with the country into a deficit.” A Washington Post article (7/11/97) speculated on NAFTA’s effect “if the impact of Mexico’s financial crisis is factored out.”

But to “factor out” Mexico’s peso crisis in assessing NAFTA is disingenuous in the extreme, Anderson says, because the two are deeply entwined. “The Failed Experiment” argues that the peso’s fall was a necessary part of Mexico’s “aggressive export-led growth strategy”–a strategy that was premised on NAFTA. The artificially high peso had kept down inflation in Mexico, which was key to NAFTA’s passage in the U.S. and to the 1994 election of pro-NAFTA Mexican president Ernesto Zedillo.

In fact, mainstream media largely acknowledged this at the time; much of their pro-NAFTA reporting depicted the pact as crucial for Mexico’s economic future. The L.A. Times declared in 1993 (3/25/93) that NAFTA would “keep Mexico stable.” And the Washington Post explained why: It reported (7/1/93) that the Mexican economy “is supported by a heavy flow of investment from abroad,” and “a lot of that investment is based on the assumption that the United States will keep its word in putting the trade agreement into effect.”

But that’s all forgotten now: The Mexican crisis, which devastated that country’s economy, doubling the number of unemployed, dropping real wages 27 percent in just two years and pushing millions of people into poverty, is today just a sad story whose only connection to NAFTA is that it “initially overshadowed any gains from” the pact (U.S. News & World Report, 7/7/97).

Some outlets are categorical: “Analysts say the notion that NAFTA caused the 1995 peso crisis is simply wrong-headed,” asserted the L.A. Times (7/9/97). “The crisis–and the slump that followed–were spawned by mismanagement on the part of Mexican policymakers, who had kept the peso artificially high to distract from domestic political problems, analysts say.”

Jobs! Jobs! Jobs?

In 1993 (5/11/93), the Washington Post declared without qualification that NAFTA would “create twice as many jobs in this country as it will threaten,” while other outlets (e.g., L.A. Times, 5/29/93) limited themselves to the claim that it would generate “many more U.S. jobs than it will eliminate.”

In 1997, however, the same outlets that were so confident in predicting the future threw up their hands at the idea of reporting the present. “For all the claims and counterclaims about NAFTA’s impact on employment, analysts have no good way to measure it,” says the L.A. Times (7/9/97). The New York Times is similarly stumped: “Officials said there were largely unsolvable problems in generating an accurate estimate of job losses,” they declare (7/11/97).

NAFTA critics aren’t buying that line. Economists routinely use trade balances to reckon job creation and loss; the “Failed Experiment” indicates that the quadrupling of the U.S. deficit with Mexico and Canada works out to some 420,000 jobs lost to increased imports and to companies shifting production to Mexico to take advantage of lower wages.

Some articles did cite Labor Department statistics that, by July of this year, more than 133,000 U.S. workers had applied for the “transitional adjustment assistance” program set up to address job loss connected to NAFTA. But most accounts left out facts that suggest why that number isn’t a very good indicator: It excludes all those who seek help through other, more accessible programs, and it only includes people employed directly in manufacturing–if a factory shuts down, the secretaries and administrators who lose their jobs don’t qualify (much less other affected workers in the surrounding community).

NAFTA proponents often play down the numbers of people thrown out of work by “free trade” policies, arguing that it’s more important that the jobs created are in export sectors that pay higher-than-average wages. That analysis, supported by the White House, repeatedly found its way into news reports; but readers had to find the occasional “opinion” column to get any countervailing information, however basic–like the fact that the jobs being lost to import competition also pay higher-than-average wages (Jeff Faux, Washington Post op-ed, 5/20/97), or that even the much-ballyhooed NAFTA-generated exports can wind up costing U.S. jobs, since “more and more, multinationals are shipping components to Mexico, so they can be assembled by low-wage workers, then sent right back as finished products to the United States.” (David Bonier, New York Times op-ed, 7/13/97) This kind of “revolving door” export has more than doubled under NAFTA.

Unsubtle Threats

If disputes about the number of lost jobs were pushed to mainstream media margins, discussion of NAFTA’s impact on wages and workers’ rights was forced off the page entirely. Media overwhelmingly ignored, for example, the compelling report commissioned by the U.S. Labor Department on U.S. employers’ use of the threat of “moving to Mexico” to hold down wages and benefits. (According to Cornell University researcher Kate Bronfenbrenner, who conducted the study, the Clinton administration sat on the results for several months before they were finally released–National News Reporter, 5/97.)

Employers have long used plant-closing threats to keep workers from forming unions and to force concessions, but Bronfenbrenner found (Multinational Monitor, 3/97) that between 1993 and 1995, employers used this illegal maneuver in a whopping 50 percent of all union certification elections; 15 percent actually did shut down within two years of a union victory–triple the rate found in the late 1980s, before NAFTA went into effect. “In fact, in several campaigns, the employer used media coverage of the NAFTA debate to threaten the workers that it was fully within the company’s power to move the plant to Mexico if workers were to organize,” Bronfenbrenner wrote.

The threats aren’t subtle: During a United Auto Workers 1995 organizing campaign, Michigan’s ITT Automotive parked tractor-trailers full of equipment in front of the plant, bearing hot-pink signs reading “Mexico Transfer Job.” Another company posted maps of North America throughout the factory, with an arrow pointing from the current plant site to Mexico. Workers get the message; where employers used such threats, unions’ success rate dropped significantly.

Of course, whether something is a problem or a boon depends on where you stand. U.S. News & World Report (7/7/97), for one, did acknowledge that “a growing number of U.S. companies [have turned] to Mexico for manpower and manufacturing capacity” as a direct result of NAFTA. But they see that as a good thing, since it “may have helped ease the bottlenecks that cause inflation during an economic expansion,” providing what one source describes as a “relief valve” from inflationary pressure. Readers familiar with media corporate-speak know that “inflation” means higher wages; so U.S. News is telling us that NAFTA gives employers “relief” from having to pay workers more. Champagne, anyone?

Losers Weepers

In place of thoughtful analysis of the kind and quality of jobs destroyed and created by NAFTA, the corporate-owned media offered a gloss: Trade pacts, in the ubiquitous simpleminded phrase, produce “losers” as well as “winners.” While implicitly or explicitly arguing that winners matter more, media have made occasional passing mention of what might be done about those annoying losers.

“Congress should provide generous retraining and relocation assistance to those who will suffer” under NAFTA, the New York Times (8/17/93) suggested vaguely back in 1993. The Washington Post (3/15/93) agreed: Govern-ment must “acknowledge an obligation to the people who get hurt in the process,” and that means “job training and adjustment legislation.”

Critics like the Economic Policy Institute’s Jeff Faux (Washington Post op-ed, 5/20/97) point to obvious fallacies in the retraining “solution.” The ratio of U.S. to Mexican wages, Faux notes, is roughly 9 to 1. “Even if this administration and Congress were willing to finance first-class retraining for American workers, which they are not, it is impossible to make U.S. workers anywhere near nine times as productive as Mexican workers in competing industries.”

But you won’t find such criticism taken up in mainstream news accounts. Once they’d declared “retraining and education” the linchpin in ameliorating any harmful “free trade” fallout, the establishment press corps promptly lost interest in it. Recent NAFTA assessments offered no information on the scope, success or even the existence of any such effort.

In fact, establishment media won’t even take up the issue of trade pacts’ disparate impact on different groups of people when they’re handed the opportunity. When more than 150 labor, environmental and human rights activists protesting the proposed expansion of NAFTA to Chile rallied in San Francisco on June 26, they were simply ignored by the city’s major dailies, the Chronicle and the Examiner (San Francisco Bay Guardian, 7/2/97).

A group of mostly Latino members of Congress met similar media indifference when they publicly protested the disproportionate burden NAFTA puts on Latino, African-American and female workers, who often work in especially vulnerable regions and industries. The Washington Post (7/16/97), which ran a brief item on page C13, sidestepped the protest’s substance to frame it as most importantly a “blow to President Clinton’s trade agenda.”

Another topic that somehow dropped off the media’s radar between 1994 and 1997 was NAFTA’s impact on the environment. It’s a glaring absence in the current discussion, says IPS’s Anderson, “because that’s been perhaps NAFTA’s most outrageous failure.”

The disturbing information cited by Anderson and others would make for gripping reporting: In NAFTA’s wake, fewer than 1 percent of trucks entering the U.S. each year are inspected–even though 50 percent of those inspected are rejected for major safety violations. Or that much Mexican produce is entering the U.S. with illegal pesticide residue due to weakened food safety inspections.

Such complaints got a mention in some of the mainstream accounts of the White House NAFTA report, but few outlets considered them worthy of any actual investigation. One exception, a June 30, 1997 L.A. Times story on pollution control efforts on the U.S./Mexican border, provided a pretty bleak picture of NAFTA’s public health repercussions.

While including information on some NAFTA-produced improvements, like a new water treatment plant in the Tijuana River Valley, the story found much more evidence of broken promises and official indifference. For example, “only 16 of 98 promised public utility projects have been approved for financing through NAFTA; just one has been completed.” Forty percent of the Mexican population in the border area have no sewers or drinkable water, likewise some 400,000 people on the U.S. side. The notoriously toxic New River “still runs black on days when Mexicali’s inadequate sewer system is overwhelmed,” and ground water in expanding border cities is being depleted at alarming rates.

“As the trucks roll north carrying Zenith TVs, General Motors auto parts, Sony computer monitors . . . and a host of other name-brand products,” wrote reporters Frank Clifford and Mary Beth Sheridan, “they pass through communities with elevated rates of tuberculosis, typhoid, hepatitis, salmonellosis and other diseases associated with bad water and bad air.”

NAFTA encouraged an explosion in industry in the already polluted maquiladora zone, but “did not mandate a crackdown on polluters or a cleanup of existing pollution.” And while the pact outlined some programs for infrastructure improvements, “lending policies and high interest rates by NAFTA’s financial arm, the North American Development Bank, have made it difficult for many small border towns, especially in Mexico, to qualify for assistance.”

This kind of in-depth exploration of NAFTA’s actual impact on real communities is just what was missing from most of mainstream coverage, which generally presents the issue as claims and counterclaims, facts be damned. That it appeared in the L.A. Times is noteworthy; in 1993, the paper argued in an outraged editorial (7/1/93) that calls for the trade pact to include an environmental impact statement were “based on dubious assumptions about NAFTA’s negative effects on the environment, especially along the U.S./Mexico border,” and gave “too much credence to scare scenarios of extreme environmentalists.”

From the Same Primer

If news reports ignored NAFTA’s failures, or blurred them with ostensibly neutral language, editorials made it clear that the corporate-owned media are emphatically allied with “free trade” boosters. Indeed, mainstream editorialists all appear to be reading from the same primer.

NAFTA has been “a sweet deal economically” that President Clinton “should have no hesitation in declaring . . . a success,” said the L.A. Times (6/30/97). The pact has been “good for Mexico,” creating a “bountiful trade family.” There is no mention whatsoever of the trade deficit, and the paper gives only a throwaway sentence to “legitimate concerns” like “the jobs picture, environmental aspects, political effects”; such questions, they allow, should be “heard out and investigated where necessary.”

The Washington Post was equally upbeat: “Free trade is good for the U.S. economy,” it declared (4/27/97); it “helps create jobs that tend to be higher-paying than average,” and promotes the exports that have “helped revive the U.S. manufacturing sector.” For workers who “lose out” under the new policy, the Post‘s remedy is the same glib panacea from 1993: “retraining” and “improved education to create the kind of labor force that will attract long-term investment.”

In a New York Times op-ed (7/13/97) that questioned the conventional wisdom, a former member of a presidential commission on U.S./ Asian-Pacific trade, Kenneth Lewis, called for a “national dialogue” on trade. We need to ask fundamental questions, like: “What is the purpose of our trade policy and what do we want our domestic economy to look like?” and: “What conditions must exist–concerning human rights, workers’ rights or environmental protections–for us to allow other nations’ goods to enter our country?”

Far from providing the space for such a dialogue, when it comes to trade, mainstream media don’t even pretend to present two sides: The “debate” they offer is between a presumed consensus of economists who “understand” the issue and a few stray “political Luddites” (L. A. Times, 7/1/93) who don’t. Even as their concerns are borne out, organizations critical of NAFTA are portrayed as partisan–as in the New York Times (7/11/97) formulation, “labor unions, environmentalists and other Democratic constituencies”–or “protectionist.” Trade policy dissenters are presented as merely wanting to “kill” trade pacts, instead of calling for open discussion of their implications and offering alternative economic visions.

Most disturbing is that while establishment media’s coverage of NAFTA’s effects sidestepped critics’ substantive concerns and ignored myriad issues that cry out for investigation, these outlets were also clamoring for President Clinton to be given “fast track” authority to negotiate even further-reaching trade pacts (involving Chile and other countries) with limited discussion. But it’s not surprising that national media who are so unwilling to honestly examine the effects of past trade pacts would be interested in squelching debate on future ones.

Labor Media Watch is a joint project of FAIR and the Labor Resource Center at Queens College.