A Report on NAFTA and the State of Health of the Maquilas
Saul Landau
Radio Progreso Weekly, 4 July 2002
My students ask if NAFTA (the North American Free Trade Agreement between the United States, Canada and Mexico) has worked as splendidly as President Clinton and now President Bush claim.
After spending a few late June days in the El Paso-Juarez area, I can report that NAFTA works fabulously, if you re a speculator-I mean investor- or a multinational corporate CEO and your Juarez branch plant remained open. A few Mexican millionaires that lease land for industrial parks and those who feed off contracts to the export factories have also fared well. For the more than 1 million Mexicans working in the maquilas who have not lost their jobs recently, well, they've survived, which they could not have done had they remained on the unproductive land of their origin.
The contemporary maquilas represent yet another industrial revolution. Instead of reading about Manchester or Leeds in the 1840s, visit Tijuana or Juarez today. Our modern equivalent of a Dickensian saga features the maquila, which attracts country folk to cities and then leads them into human dramas.
In Juarez, for example, the remains of more than 250 women have been found raped and mutilated. Almost of all them worked in maquilas. People from tradition-bound communities have made the difficult transition to non-community life where each person must suspect his neighbor - themes for modern tele-novelas.
Ciudad Juarez, across the once mighty, but now a trickle, Rio Grande River has grown cancerously. Yes, growth has little to do with development. Its barren, sandy hills have sprouted unplanned colonias (euphemism for hideous slums). Rural families arrive after surrendering to the fact that the land no longer supports them. They find jobs in the export factories, patch together homes from pieces of wood, metal and plastic, and find ways to tap into the power line (some get fried). They wait for the circulating water and gas trucks blasting La Cucaracha on their speakers to bring the needed material for life and cooking. The families often store the water in old metal chemical barrels. The air, once just dusty during the high wind season, now reeks of emissions from factories and the stench of un-muffled auto exhaust. Since the United States tightened border security, the cars sit two to three times longer on the bridges connecting Juarez with neighboring El Paso. The fumes drop on the residents.
In colonias like Anapra and Lago Poniente, the rural folks rapidly acquire urban ways. They try to raise their kids to become academic achievers or send them into the maquilas in their mid teens to contribute to scarce family income. Alarming numbers of young people turn to drugs, prostitution and gang delinquency.
The shacks in the colonias face unpaved streets where mangy dogs drop their loads and little kids run barefoot through the summer dust. But, says Ana Maria, mother of three and Catalina mother of seven, at least Juarez meant certainty of employment.
Two years ago, when I had last visited Juarez, most of the maquilas boasted help wanted signs and ran three shifts a day. Employment neared 100 %. An unhappy worker in factory A could quit and find work at Factory B across the street where the wages were five centavos an hour more or had better cafeteria food. That workplace mobility has ended with the onset of recession.
Over the last eighteen months, some 250,000 factory workers have lost their jobs in Mexico. Ironically, some of the very factories that moved from the United States in the 1980s and 1990s now find compelling reasons lower wages - to shift operation to Asia. Catalina and Ana Maria and their many children have recently received their pink slips. The once buzzing factories where they worked have transmogrified into misshapen tombstones; industrial parks have turned into industrial cemeteries. Creeping weeds and blowing plastic and paper litter now cover a once buzzing parking lot in front of Quality Industrial Services. A lone security guard shares the space with a scruffy cat and an elusive bird. It s difficult, the guard told me to see maquilas shutting down, moving to China. The man blamed last year s US economic downturn for putting Mexicans out of work.
On the surface, says Chihuahua sociologist Victor Quintana, the job losses come from the US recession and the post 9/11 shocks, but in reality that’s a smoke screen for deeper causes. The US recession was hardly a cold, while we in Mexico developed full pneumonia. The maquila model, Quintana predicts, has exhausted its potential. Mexico cannot compete with China. But the model has done its damage. Two years ago, he says, Chihuahua led Mexico in high employment; today, Chihuahua leads in unemployment. Thanks to lay offs from factory shut downs or factories moving or reduction of shift, Chihuahua has lots more than 100,000 jobs.
According to a June 20 Washington Post story, over the last two years more than 500 foreign- owned assembly-line factories in Mexico moved to China. The company accountants have concluded that the wage differential between the two third world countries more than covers the increased costs of shipping and the inconveniences of distance. In Juarez, where cost of living runs about 75% of El Paso across the river, a maquila, a beginning machine operator earns less than $8 a day, whereas his counterpart in China makes only a quarter of that pathetic wage.
Victor Quintana doesn’t mourn what he believes is the end of the maquila era. What NAFTA and the whole free trade model did was to launch a cultural offensive against the majority of the world’s poor.
Quintana insists that the maquila represents far more than a new form of production. It dictates how we relate, how we live, what we do, consume. It dictates individualism, breaks apart community, a form of terrorism, which leads people to ways of avoiding life; booze, crack and cult religions. It inundates us with its cultural propaganda. The maquila has its own discourse, one that mocks traditional values like cooperation and solidarity. Its only values are individualism and competition. Quintana has little patience with the rich and powerful, like President Vicente Fox himself, who wring their hands about our "losing our traditional values" while they eagerly bring the value-destroying maquilas into the country for economic growth.
Maquilas offer growth rates, but also crime rates. Those who preach that we should respect Nature invite the maquilas in which in turn destroys Nature. Maquilas destroy people and their natural bonding. Maquilas are beyond cruel. They embody the impersonality of multinational corporate capitalism.
Take the case of Leticia Ortiz who came to Juarez from the countryside 19 years ago. She worked her way up in a large maquila to become head of personnel. Then, without warning, she received her unceremonious dismissal. The CEOs located in some first world city had decided to move their plants to China where wages ran significantly lower than those in Juarez and productivity was just as high. Bitter? No, just disappointed, she said. After working my way up for all those years I guess I foolishly developed a sense of loyalty to the company, a sense that was not reciprocated. They didn’t even pay me what they owed me for severance according to the law. But it would take too long and it would be too expensive to fight it, so I accepted their less than generous offer After receiving her pink slip, Leticia said she went home and cried for hours. Then, she said, I basically slept for the next six months. I guess you could call it depression.
History
From 1965 on, Juarez opened its first maquilas in order to deal with a recently laid off labor force of hundreds of thousands of migrant workers that could no longer work in the Texas cotton fields thanks to a newly designed machine that replaced them.
US investors led the way into Mexico. Low wages and a productive work force, low taxes and no environmental regulation or costs related to OSHA like agencies made Mexico attractive. But, gradually, independent unions, backed by some AFL-CIO unions, began to move into the border cities and their appearance alone produced a rising impact on wages.
Up until last year, investment in Mexican maquilas had continued to rise. Since 1994 NAFTA provided the kosher stamp for wary investors and the rate of maquila growth had reached double digits. NAFTA provided tax-free incentives for maquila owners, so US companies now ship raw materials to Mexico and then import finished parts or assembled products tax-free: electronics, electrical goods, automobiles and trucks and trailers or their parts, wood and plastic products and textiles.
When the maquila experiment began in 1965, Juarez attracted a handful of factories. But now almost 4000 of these mostly foreign-owned export production plants dot the landscapes of border cities like Juarez, Tijuana, Mexicali, Nogales, Matamoros and other border towns. Indeed, the maquilas have moved into the interior of the country as well.
The maquilas account for about half of Mexico's almost 150 billion annual exports. But efficient as Mexican labor has proven to be in global competition, they fall far short of Chinese workers for the low wage labor champion.
Some Juarez plants had even anticipated this and built automated, even robotized factories there. An Italian owned factory manufactures TV and computer chases made in a mold and extracted by a robot. The plant uses comparatively few workers. The Italian plant manager said it made strategic sense to open a plant in Juarez, given its proximity to the US border. The wages we pay here are about one fourth of what we would have to pay in Milan, he added.
But Mexicans who came to Juarez did so from necessity. They could no longer eke out a subsistence livelihood on the land. They came because maquilas seemed to promise permanent, albeit low-level job security.
What happens now that some of these people have become unemployed? According to Sociologist Quintana, a few return to the villages they were forced to leave to find gainful employment. Some still try to traverse the difficult obstacles of the US border. Near El Paso, however, since the 9/11 attacks events, almost no one tries successfully to cross. US high technology and vigilant patrols act as a virulent form of deterrence.
Further west, in the hottest and remotest sections of the Arizona desert, where summer temperatures top 115 degrees, the coyotes lead their human prey. These dealers in human flesh offer their crossing the border services for a price to those desperately wanting to reach US territory. The coyotes assure their clients of plentiful water. The coyotes often abandon their charges just at the point when the water runs out and the temperature becomes inhospitable for human life. Through mid June alone, more than 20 Mexicans, including an 11-year-old girl had died trying this route. Regularly stories appear in the media about speeding vans carrying undocumented workers crashing and killing the occupants in attempts to elude border patrol chasers.
Since last October almost 50 Mexicans have fallen trying to make it to the Tucson area. US immigration laws are death laws, said one Mexican border resident. Thanks to the newly militarized border patrol vigilance the traditional flow of Mexicans into the United States has noticeably decreased. The usual zones have too many patrols, so the perilous desert has become the choice of the truly desperate and adventurous.
As a result of this crackdown on braceros or mojados most of the newly unemployed will remain in Juarez. The population may have reached 3 million, speculates Felix Perez. No one has counted. Each day hundreds, maybe thousands arrive at the bus station, looking for work in the maquilas.
"I'm staying in Juarez", Ana Maria said. "It's rough here, but it's impossible where I came from".
Maquila salesmen preach to potential investors that Mexico’s work force can still compete for low wages and high productivity with other third world countries. That’s global competition! Which country can offer its people for the lowest wages, can promise polluting industries the least environmental regulation, the lowest taxes, the least workplace monitoring for health and safety and the least prospect for unionization! This is the free market. This is democracy!
To keep it healthy, if you listen to President Bush or President Fox, we need more of the same. President Bush makes no reference to the labor, environmental and social horrors that have developed alongside what has become known euphemistically as free trade. Indeed, he pushes hard and patriotically to expand his free trade authority, called Fast Track because Congress will not have a chance to debate the details.
A few days in Juarez should enlighten any sensitive person to the fact that there is no guiding brain in this maquila process. The bottom line, which dictates corporate policies, dictates all of life.
Well, you decide.
Maquilas - part 2
Copyright 2002 Radio Progreso
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