Dave Hodges

More About: Politics: General Activism

Constitution (Part 3): First There Was NAFTA, Then There Was CAFTA and How America Got the SHAFTA

How is the following good for America?

As America plunges headlong in the throes of the Central American Free Trade Agreement (CAFTA), one might choose to look at its predecessor, the North American Free Trade Agreement (NAFTA) as a predictor of the effect that CAFTA will have upon the American worker.

According to the AFL-CIO web site, NAFTA has accounted for the loss of 2.5 million American manufacturing jobs and a total of 3.2 million jobs in the decade that NAFTA has been law. Also, NAFTA has resulted in the decline of real wages in both Mexico and the United States. Further, NAFTA provisions are Communitarian in nature and its procedures and legal enforcement mechanisms are alien to the United States Constitution. Perhaps the most devastating effect of NAFTA is that it results in the loss of the United States government to set and enforce its own business practices.

One of the great sovereignty snatchers is contained in NAFTA's Chapter 11 which highlights a variety of unprecedented rights and protections for investors and investments in NAFTA countries. If a company believes that a NAFTA member government has violated NAFTA investor rights and protections, it can initiate a binding dispute resolution process for monetary damages before a trade tribunal, which will meet to decide the case in secret. There are none of the basic due process or transparency guarantees such as in the national courts of the United States. The so-called "investor-to-state" cases are litigated in the special international arbitration bodies of the World Bank and the United Nations, which is subsequently closed to public participation, observation and input. A three-person panel listens to arguments in the case, with powers to award an unlimited amount of taxpayer dollars to corporations whose NAFTA investor privileges and rights they judge have been violated. Chapter 11 will prevent organizations, such as the Food and Drug Administration from protecting over the counter drugs, prescription practices and the approval and use of certain medications because it could be determined that the FDA's actions are a barrier to free trade.

The Wagner Act of 1935, which protects union activity, is null and void under NAFTA. Workplace discrimination is not prohibited under NAFTA. Virtually all worker protections that Americans take for granted are gone in the name of protecting free trade in NAFTA run businesses.

Not only has NAFTA been a threat to our national sovereignty, the following economic figures are reflective of the net effect that NAFTA has had on American jobs in the textile industry. NAFTA is a Communitarian doctrine which runs contrary to the United States Constitution. Both NAFTA and CAFTA have determined that it is in the interest of the common good that free trade should take precedence over protecting worker rights and following United States Constitutional and Administrative law.

The arguments against the various trade agreements go far beyond the philosophical and theoretical. "Free trade" practices are devastating wholesale factions of the American economy. A closer look at the fate of textiles provides a telling example of how corporate greed, combined with governmental complicity and Communitarian principles of justice, has resulted in the wholesale destruction of the American textile industry.

In the promotion of globalization and its impact on American industry, NAFTA has resulted in massive job Loss. Globalization, through NAFTA, grants the elimination of tariffs and quotas in order to increase trade of goods and services. Globalization in the form of the various "free" trade agreements is erasing this nation's manufacturing base by easing the multinational corporations' ability to move manufacturing overseas resulting in disappearing labor rights and higher unemployment. Every state has lost jobs equaling at least 1.2% of their workforce since changes to American trade policies under NAFTA and the WTO took place.1

NAFTA has had a devastating impact on the United States garment Industry. The Multi-Fiber Arrangement (MFA), which protected United States domestic manufacturing by limiting apparel and textile imports, was eliminated on December 31, 2004 under World Trade Organization (WTO) policy which runs hand in glove with NAFTA. Several studies indicate that more apparel production will be outsourced, leading to a potential loss of 50,000 jobs in apparel and textile manufacturing just in California. 2

Over 500,000 U.S. apparel and textile jobs have been lost since the passage of NAFTA (North American Free Trade Agreement) in 1994.3

China is gaining a very large share of the textile market. After the quotas on brassieres and infant clothes were removed, China's exports into the United States rose 232%. After the removal of quotas on infant clothing, China's exports surged 826%.4 And the new generation of Walton's wonder why the "Great Wall of China Mart" is fast becoming the most hated box store in America!

NAFTA reduced trade barriers, shifting apparel and textile manufacturing to Mexico's maquiladoras. Since the implementation of NAFTA, Levi-Strauss & Co. has closed over 20 factories and laid off over 25,000 workers, which has resulted in the shifting of many jobs to Latin America and Asia.6 In San Francisco, 20,000 garment workers have lost their jobs, reducing the industry by 67% since the advent of NAFTA.7

CAFTA is NAFTA on steroids! CAFTA has its own version of NAFTA's Chapter 11. CAFTA contains even fewer worker protections than does NAFTA. CAFTA is resulting in even a greater loss of sovereignty that did NAFTA. At the end of the day, NAFTA will seem like a walk, compared to the devastation being wrought by the Ted Kennedy and John McCain-sponsored CAFTA.

And how is this good for America?


1 Scott, Robert E. "Where the jobs aren't: Particular industries and states bear brunt of dislocations wrought by trade agreements." Economic Policy Institute. 30 October 2001. http://www.epinet.org/content.cfm/Issuebriefs_ib168.

Accessed 12 April 2004.

2 American Textile Manufacturers Institute, "The China Threat to the Textile and Apparel Trade Report," July 2, 2003, http://www.atmi.org/TextileTrade/china.pdf. Roughly half of the US apparel and textile jobs are projected to be lost.

3 U.S. International Trade Commission. http://www.usitc.gov. Hiebert, Murray. "Getting Ready for Free Trade." Far East Economic Review. July 31, 2003.

4. Ibid.

5 U.S. Department of Labor, Bureau of Labor Statistics. March 1993-March 2003.

6 Ralph Blumenthal, "As Levi's Work Is Exported, Stress Stays Home," New York Times, October 19, 2003.

7 California Employment Development Department, April 1993-April 2003.

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