Lori's Statement

[MDOLAN <mdolan@citizen.org>]

  Lori being the Director of Public Citizens Global Trade Watch.
  And her statement being about the President's 3 year report on NAFTA.
  ASCII text, attached.
  Check it out.
  
  Mike Dolan
  Field Director
  Global Trade Watch
  Public Citizen
  
  
  
  
  
  
  
  For Immediate Release:                       
  July 11, 1997                                
  
                Clinton Administration's NAFTA Report
                Statement by Lori Wallach,  Director
                 Public Citizen's Global Trade Watch 
  
  The Administration's NAFTA report must be from Mars, which would explain both the delay and
  the amazing whoppers and omissions.  Unfortunately, you would be more likely to find little green
  men on Mars than the truth about NAFTA in the Administration report.  An honest analysis would
  have concluded that NAFTA is an experiment which has failed. 
  
  Most revealing is that even in a lopsided, rhetorical report, three years of NAFTA reality have
  forced the Administration to abandon the 1993 NAFTA promises of an increased trade surplus with
  Mexico,  200,000 net new NAFTA jobs related to Mexico and increased real wages in the U.S.  and
  Mexico. The truth is out there -- it's just not in their report. The evidence of NAFTA's failure is
  overwhelming and this document will not fool the American people or Congress.  
                                  
                  Top Three NAFTA Report Whoppers 
  
  1. "NAFTA had a modest positive effect on US net exports, income, investment and jobs."
  
  Reality: In three and one half years NAFTA has turned a modest U.S. trade surplus with Mexico
  crashing into an historical new deficit of more than $16 billion.   The U.S. trade deficit with Canada
  under NAFTA increased from $10.8 billion in 1993 to $22.8 in 1996. The new net  NAFTA trade
  deficit is $39 billion. Under NAFTA, U.S. imports from Mexico and Canada have skyrocketed,
  while  exports to those countries have continued to grow at the same rate as before NAFTA.
  Meanwhile, real wages are down in each of the NAFTA nations.  
  
  As for alleged gains in U.S. jobs, it is striking to consider which companies are being touted by the
  Administration as "NAFTA success stories." For instance, two companies cited as success stories by
  the Administration in Tuesday's Associated Press story don't exactly show us the creation of
  numerous U.S. NAFTA jobs:   (i)-Miles Press, of Indianapolis, Indiana, is a company with 17 total
  employees, according to Sales Representative Don Wesseling, and they have added  no jobs in the
  U.S. due to NAFTA.  (ii)-Berg Electronics, with its corporate headquarters in St. Louis, claims it has
  increased jobs in the U.S. due to NAFTA, but is unable to state how many. Berg's major production
  expansion was in Mexico, where it makes connectors to computers for final sale in the U.S. market.
  According to a reporter for the St. Louis  Post-Dispatch, Berg has been shifting production to Juarez
  and the company has no production facilities in the  Midwest. Company officials were surprised to
  learn they were being touted as a "NAFTA success story." 
  
  
   2.  "Mexico reports a 72 percent reduction in serious environmental violations in the maquiladora
  industry since the NAFTA was signed and a 43 percent increase in the number of maquiladora
  facilities in complete compliance. " 
  
  Reality:  Two years into NAFTA, a Mexican Ecology Commission spokesperson said, "the
  inspection of the maquiladora industry is virtually nonexistent...which is a great environmental
  problem for Mexico." If inspection has been reduced, is it any surprise that violations are down? 
  For example, Matamoros with over 100 maquiladoras, has only three government health
  inspectors, who normally give advance warning of visits.  Air quality and effluents are tested only
  once a year.  
  
  3.  "NAFTA has contributed to the prosperity and stability of our closest neighbors"
  
  Reality:   As the Report itself notes, "Mexico experienced its most severe recession from the
  1930's."  By August 1996, real hourly wages in Mexico stood at half their 1980 level. Mexico's
  foreign debt has increased by over $30 billion in the first three and one half years of NAFTA,
  putting in perspective the so-called peso "bailout." The Mexican economy lost 1,850,000 jobs in
  1995. According to a study by Mexico's National Autonomous University, three years into NAFTA,
  50% of Mexicans are considered to be "extremely poor" compared to 31% in 1993, before NAFTA.
  Anticipation of NAFTA's negative effects sparked the Zapatista uprising in Chiapas on NAFTA's
  January 1, 1994 implementation date. The poverty-stricken Mayan Indian peasants in the region
  said NAFTA was their "death sentence." National protests supporting the Zapatistas ensued as
  the Mexican military killed and tortured Mayan prisoners as documented by Amnesty
  International. A second armed insurgency group surfaced in 1995. A series of political
  assassinations followed the 1994 revolt, including the murder of PRI presidential candidate Luis
  Donaldo Colosio and the second ranking PRI official, Jose F. Ruiz Massieu. Former Mexican
  president Carlos Salinas' brother was jailed for masterminding the Massieu killing. The
  whereabouts of former President Salinas, an architect of NAFTA, are unknown. An August 1996
  poll found that two out of three Mexicans believe that government corruption has increased under
  current Mexican President Zedillo. The Mexican federal police are increasingly beyond civilian
  government control and a growing source of fear and mayhem for the Mexican people.
                  Top Five NAFTA Report Omissions 
  1.  Food Safety -- The report does not address NAFTA's impact on food safety. NAFTA's passage
  has greatly increased the volume of tainted food coming into the United States. Between 1993 and
  1995, U.S. imports of fresh and frozen fruits from Mexico increased 45.2%;and imports of
  vegetables rose 31.4%. The increased volume of Mexican produce imports,  NAFTA requirements 
  limiting  inspections, as well as inadequate funding have combined to overwhelm inspection
  systems charged with guaranteeing the safety of imported food, according to a March 1997 GAO
  report.  Public awareness of the food safety issue related to NAFTA has greatly increased since 130
  cases of Hepatitis-A in Calhoun County, Michigan were traced to strawberries illegally imported
  from Mexico.
  
  2.  Unsafe Trucks -- Truck traffic from Mexico has increased dramatically due to the boom in
  imports but NAFTA has provided neither the financial support nor regulatory incentives to bring
  Mexican standards up to U.S. levels. Almost half of the Mexican trucks examined by U.S.
  inspectors were so unsafe they were pulled off the road -- and the U.S. inspects only 1 in 200 trucks
  crossing the border from Mexico.  Mexican truck safety standards remain dangerously weaker than
  in the U.S. For example, Mexico does not require front brakes on tractor-trailers and permits
  drivers 13 consecutive hours behind the wheel (compared to 10 in the U.S.)  In December, 1995, the
  Clinton Administration postponed a NAFTA requirement to allow Mexican trucks to travel freely
  throughout the border states. It is now considering lifting the temporary freeze, despite the lack of
  inspection capacity and adequate inspection funding. Under NAFTA, Mexican trucks are to be
  allowed unimpeded access to the entire United States by the year 2000.
  
  3. Declining Wages:  Real wages for the majority of workers are declining in all three NAFTA
  countries. Real median wages in the U.S. fell from $10.78 an hour  in 1993 to $10.35 an hour in 1996,
  a 4.1% decline. NAFTA is undermining the quality of U.S. jobs and exerting downward pressure on
  wages as NAFTA's Chapter 11 investment rules provide new, no-cost guarantees for U.S. investors
  to move jobs to Mexico or Canada. In direct contradiction to the promises of NAFTA's boosters, it
  has been high-wage, high-tech jobs that have led U.S. NAFTA job losses.  Almost all of the massive,
  $16 billion NAFTA trade deficit with Mexico in 1996 was accounted for by the deficit in autos, auto
  parts and engines ($15.057 billion).  U.S. data shows a majority of U.S. workers who lose their 
  high-wage manufacturing jobs find new employment in lower-paying jobs  in the service sector. 
  While NAFTA boosters now claim that NAFTA cannot be harming U.S. workers because the
  economy is creating new jobs, the U.S. Labor Department predicts that the top four categories of
  jobs for growth over the next decade are: cashiers, janitors, retail sales clerks and waiters and
  waitresses.
  
  4.  Increased Flow of Illegal Drugs from Mexico: As reported by the Washington Post (3/30/97),
  NAFTA's new flood of truckloads of imports from Mexico and the loosening of border inspection is
  causing a surge in  illegal drugs entering the U.S. through Mexico. State Department estimates that
  now 70% of cocaine, 80% of marijuana, 30% of heroin enter the U.S. through Mexico, up
  significantly from pre-NAFTA levels. The Washington Times (1/1/97) cited a memo written by an
  intelligence officer at the U.S. Embassy in Mexico claiming that traffickers were using NAFTA and
  the cover of legitimate U.S.-Mexico  business transactions to bring more drugs into the U.S.
  
  5. Soaring Imports:   Between 1993 and 1996 imports from Mexico grew 82.7%, more than double
  the growth in exports. The rate of U.S. export growth to Mexico however has continued to grow at
  about the same rate as it did before NAFTA, reflecting growth in the two countries' populations
  and economies.  Between 1993 and 1996,  exports to Mexico grew 36.3%, an annual growth rate of
  10.9%   In 1991-1993, prior to NAFTA, U.S. exports to Mexico grew 25.1%, an annual growth rate of
  11.9%.  The data for Canada is similar. It is bizarre that NAFTA defenders  tout the increase in
  trade volume  as evidence of NAFTA's success when the increase actually reflects  a massive new
  U.S. trade deficit. The U.S. trade surplus with Mexico of $1.7 billion in 1993 collapsed into new
  deficits of $15 in 1995 and $16 billion in 1996. Adding the deficit with Canada, the U.S. has a $39
  billion annual NAFTA trade deficit.  NAFTA supporters say the deficit with Mexico is caused by
  the peso collapse and the ensuing economic crisis. Yet, U.S. trade deficits with Mexico began in
  October 1994, well before the Dec. 26, 1994 devaluation. Moreover, China, Japan and Europe,
  Mexico's other big trade partners, which also had surpluses with Mexico in  93, have maintained 
  surpluses throughout Mexico's current crisis. This crisis has been more damaging to the U.S.  In
  1982 the U.S. suffered a $7 billion trade deficit with Mexico for one year.