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JFP News 7/21: Transport Workers Boycott Honduran Ships
Submitted by Robert Naiman on 21 July 2009 - 5:31pm
Just Foreign Policy News
July 21, 2009
Urge Hillary to Increase U.S. Pressure on Coup Regime in Honduras
Talks in Costa Rica broke down after the coup regime refused to accept a compromise that would have allowed President Zelaya to return.
Call Secretary of State Clinton's Secretary Clinton's Chief of Staff Cheryl Mills at 202-647-5548 and urge her to support increased U.S. pressure on the coup regime, such as canceling U.S. visas and freezing U.S. bank accounts of coup leaders, as suggested by the Los Angeles Times editorial board on July 14.
Or send a letter to your Representative, in support of increased pressure, and in support of the Delahunt-McGovern-Serrano resolution [HRes 630], condemning the coup and calling for the restoration of President Zelaya.
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1) Politicians and businessmen who ousted President Zelaya are taking their battle from Honduras into the U.S. political arena, waging a lobbying campaign to paint themselves as a bulwark against "dictatorship" and "communism," AP reports. They hope to nudge the Obama administration away from its threat to impose sanctions on Honduras, where export-assembly factories are dominated by U.S. firms and investors. Zelaya's foes appear to hope Obama doesn't have the time or energy for this battle when he has weightier problems, AP says. Business executives say U.S. Ambassador Llorens has called them into meetings to warn that Honduras - heavily dependent on exports to the US - could face tough sanctions if leaders continue to refuse Arias' compromise proposal for Zelaya to return as head of a coalition government. Coup leader Micheletti vowed to stay in power until a scheduled Nov. 29 presidential vote, which the US has suggested it may not recognize if it is held under a de facto government.
2) Human-rights groups are calling on the US to hold back millions of dollars in counternarcotics assistance to Mexico's military, concerned about a rise in abuse cases in conjunction with Mexico's drug war, the Christian Science Monitor reports. Mexico's National Human Rights Commission reports a huge jump in reported human-rights violations by Mexican security forces: from 182 in 2006 to 1,230 last year. Human Rights Watch says the US should enforce a requirement of the Merida Initiative that alleged military abuses be tried in civilian rather than military courts. The Washington Office on Latin America is also calling for a withholding of the Merida funding.
3) Defense Secretary Gates announced a temporary increase in the size of the Army of up to 22,000 troops to meet the pace of operations in Iraq and Afghanistan, the New York Times reports. The increase will raise the size of the Army to 569,000 active-duty soldiers; an expansion to 547,000 soldiers, announced in 2007, was completed in May.
4) The combined death toll of US troops in the wars in Iraq and Afghanistan surpassed 5,000, USA Today reports.
5) Analysts warn that if the coup government remains in power in Honduras, the Central American right may be encouraged to stage further coups, Inter Press Service reports. Ernesto Rivas Gallont, former Salvadoran ambassador in Washington from 1981 to 1989 [i.e., under a right-wing government - JFP], says the Honduran coup will have profound implications for several Central American countries if the coup government's grip on power is consolidated. "If those who perpetrated the coup prevail in Honduras, there is no doubt that it will embolden the Central American right," the former diplomat told IPS.
6) The International Transport Workers Federation called for a worldwide boycott of Honduran-flag merchant ships to protest the military coup in Honduras, the Journal of Commerce reports. ITF said its call for action "is likely to affect the loading and unloading of the 650 ships flying the Honduran flag." The ITF called on its 656 member unions to take "peaceful" and "lawful" measures to put pressure on Honduras's military government. The boycott would hit Honduras's two main exports – textiles and coffee, which are mostly shipped to the US, the Journal of Commerce says.
7) The 95 percent drop in opium production last year in the Afghan province of Badakhshan has been hailed as a model by international anti-drug officials, the Washington Post reports. But for many communities the loss of poppy income has meant a return to desperate rural poverty, the Post says. "The authorities promised our people jobs and projects if they stopped growing poppy, but that never happened," said a teacher in the provincial capital.
8) Under British colonial regulations, the Pakistani government has criminalized all members of the Mehsud tribe as part of its war on Taliban commander Baitullah Mehsud, the Washington Post reports. A few hundred thousand people in Pakistan belong to the Mehsud tribe, the Post says.
9) U.S. forces in Iraq continue to hold Iraqi journalist Ibrahim Jassam without charge, NPR reports. According to the Committee to Protect Journalists, Jassam is the only Iraqi journalist still in U.S. custody.
10) Chevron has told its shareholders it will refuse to pay a judgment in an environmental lawsuit in Ecuador, the Wall Street Journal reports. The plaintiffs are hoping negative publicity will lead Chevron to settle the case.
11) NAFTA was sold to citizens of the US and Mexico with the promise it would transform Mexico into a booming middle-class economy, dramatically reducing illegal immigration and creating a vast market for US exports, writes Jeff Faux in the Nation. Fifteen years later, Mexico is still unable to create enough jobs to employ its people. Some Mexican businessman feel betrayed, because after the US opened its market to Mexico, it opened its market to China, forcing Mexico to lower its wages to compete.
1) Honduras' interim govt sends lobbying team to US
Mark Stevenson, Associated Press, Tuesday, July 21, 2009 2:50 AM
Tegucigalpa, Honduras - The soldiers, politicians and businessmen who ousted left-leaning President Manuel Zelaya are taking their battle from Honduras into the U.S. political arena, waging a lobbying campaign to paint themselves as a bulwark against "dictatorship" and "communism."
Appealing to free trade supporters, they hope to nudge the Obama administration away from its threat to impose sanctions on the impoverished country, where export-assembly factories are dominated by U.S. firms and investors. "I imagine there would be some reaction from them" to trade sanctions, Amilcar Bulnes, head of the Honduran Council of Private Business, said Monday.
Zelaya's foes appear to hope President Barack Obama doesn't have the time or energy for this battle when he has weightier problems like his push to reform the U.S. health care system and turn around the economy.
The lobbying team left for the U.S. as Washington was turning up pressure on the Micheletti government by warning that Honduras could face severe economic sanctions if Zelaya is not restored to the presidency.
U.S. Secretary of State Hillary Clinton called Micheletti on Sunday to say there would be serious consequences if his government keeps ignoring international calls for Zelaya's return - the key point that led to a stalemate in U.S.-supported negotiations over the weekend mediated by Costa Rican President Oscar Arias.
Business executives say U.S. Ambassador Hugo Llorens has called them into meetings to warn that Honduras - heavily dependent on exports to the United States - could face tough sanctions if leaders continue to refuse Arias' compromise proposal for Zelaya to return as head of a coalition government. The U.S. Embassy said it would not comment on the meetings.
The European Union added to the pressure Monday by announcing it was suspending $93.1 million (65.5 million euros) in aid to Honduras. The EU's external relations commissioner, Benita Ferrero-Waldner, called the standoff over Zelaya "a crisis which Honduras can ill afford."
No government has recognized the Micheletti administration, and the United Nations and Organization of American States have called for the return of Zelaya, who was arrested and hustled out of the country by the army on June 28.
Micheletti vowed to stay in power until a scheduled Nov. 29 presidential vote, which the United States has suggested it may not recognize if it is held under a de facto government.
Business leaders - a key sector of support for Micheletti - also vowed to tough it out, hoping the U.S. government is as wary as they are of Zelaya, who has aligned himself with leftist Venezuelan President Hugo Chavez, one of Washington's biggest antagonists in the region.
2) Mexico's Army Is Violating Human Rights, Groups Say
The US should withhold key counternarcotics funds from Mexico until progress is made, argue several human rights organizations in the US and Mexico.
Howard LaFranchi, Christian Science Monitor, July 20, 2009
Human-rights groups are calling on the United States to hold back millions of dollars in counternarcotics assistance to Mexico's military, concerned about what they say is a rise in abuse cases in conjunction with Mexico's drug war.
At stake are tens of millions of dollars the US has promised to Mexico by this fall. The money is part of the Merida Initiative, a $1.4 billion counternarcotics pact negotiated with Mexico in 2008.
Before approving the plan, however, the US Congress imposed a requirement that 15 percent of annual funding be withheld until the State Department certified that the Mexican government is meeting key human-rights obligations.
Holding back that 15 percent would help enhance cross-border cooperation in the field of human rights, advocates have said. "The Merida Initiative provides the Obama administration with an important opportunity to strengthen US-Mexico drug enforcement and human-rights cooperation," said Kenneth Roth, director of New York-based Human Rights Watch, in a letter to Secretary of State Hillary Rodham Clinton.
In particular, Roth says the US should enforce a requirement that alleged military abuses be tried in civilian rather than military courts.
Mexico's National Human Rights Commission reports a huge jump in reported human-rights violations by Mexican security forces: from 182 in 2006 to 1,230 last year. The Washington Office on Latin America (WOLA) notes that such cases continue to be transferred to Mexico's "notoriously opaque military justice system."
WOLA, as well as several Mexican rights groups, is also calling for a withholding of the Merida funding.
Obama Administration officials say the White House wants to see Mexico's counternarcotics efforts under the Merida plan certified and the remainder of this year's funding released.
3) Gates Says U.S. Army's Size Will Grow By 22,000
Elisabeth Bumiller, New York Times, July 21, 2009
Defense Secretary Robert M. Gates on Monday announced a temporary increase in the size of the Army of up to 22,000 troops to meet what he called the "persistent pace" of operations in Iraq and Afghanistan.
The increase, to occur over the next three years, will raise the size of the Army to 569,000 active-duty soldiers. An expansion to 547,000 soldiers, announced by Gates in 2007, was completed in May.
Currently there are about 130,000 American troops in Iraq and about 60,000 expected in Afghanistan by the end of the year. Although there is a scheduled reduction of close to 80,000 troops in Iraq, most will not start to come home until after March 2010.
4) Deaths Of U.S. Troops Exceed 5,000 In Both Wars
Andrea Stone, USA Today, July 20, 2009
The wars in Iraq and Afghanistan reached two solemn milestones Monday: July has become the deadliest month for U.S. troops in Afghanistan, and the combined death toll surpassed 5,000.
Four Americans were killed by a roadside bomb in eastern Afghanistan on Monday, U.S. military spokesman Lt. Robert Carr said. That brings the number of U.S. servicemembers killed so far this month to at least 30. The previous deadliest month was June 2008, when 28 died, the Pentagon said. In Iraq, where casualties have dwindled in recent months, at least six Americans have died so far in July.
Deaths on both fronts pushed the total U.S. fatalities in Iraq and Afghanistan to at least 5,002, according to the Pentagon. That number includes 4,332 military deaths in Iraq and 669 in Afghanistan, as well as 14 Defense Department civilians in both countries.
Another 68 American servicemembers have died in related operations in other countries.
5) Shades of Coups Past - And Yet to Come?
Raúl Gutiérrez, Inter Press Service, Jul 17
San Salvador - If the de facto government of Roberto Micheletti remains in power in Honduras, the Central American right may be encouraged to stage further coups against the fragile democracies that have emerged in the region over the last two decades, analysts warn.
The forces of democracy and the international community must continue to exert pressure to reestablish the constitutional order and enable ousted Honduran President Manuel Zelaya, whose term ends in January, to return to office, experts from different countries in the region told IPS.
Ernesto Rivas Gallont, former Salvadoran ambassador in Washington from 1981 to 1989, says the Honduran civic-military coup will have profound implications for several Central American countries if Micheletti's grip on power is consolidated. "If those who perpetrated the coup prevail in Honduras, there is no doubt that it will embolden the Central American right," the former diplomat told IPS.
"It's hard to admit, but (Fidel) Castro and (Hugo) Chávez are right" to fear that if the coup-mongers consolidate their power, "a series of coups d'état could be unleashed against governments in the region," Rivas Gallont wrote in his blog, referring to statements by the former Cuban president and the Venezuelan president in early July. "It is only too obvious that the coup has exacerbated differences between left and right, and not just in Honduras," he said.
The United Nations, the Organisation of American States (OAS), the European Union, the Central American Integration System (SICA) and the Bolivarian Alliance for the Americas (ALBA), among others, have all condemned the coup in Honduras and vigorously demanded Zelaya's reinstatement as the constitutional president.
In contrast, and in spite of these strong pronouncements, only "the Central American right has justified the coup, using Chávez as a pretext," IPS sources said.
For instance, they said, rightwing sectors in El Salvador have recently been supplanted in government after decades in power by the formerly-guerrilla leftwing Farabundo Martí National Liberation Front (FMLN). "They may be tempted to carry out actions similar to what happened in Honduras, of the kind that have marked our history," they warned.
The rightwing Nationalist Republican Alliance (ARENA) party, which governed El Salvador from 1989 up to June this year, and is now in opposition, deplored Zelaya's "exile" but did not condemn the coup. "It is also true that President Zelaya committed serious constitutional violations that led other state bodies" to remove him from office, says a paid ad by ARENA published in the Salvadoran media in early July.
The ad also urges Salvadoran President Mauricio Funes to "refrain" from interfering in the Honduran crisis, arguing that "it could affect relations between the two countries."
The Funes administration issued an immediate condemnation of the coup, and two days later at a SICA meeting in Managua, El Salvador, Guatemala and Nicaragua agreed to close their borders with Honduras for 48 hours Jul. 1-2, as a way of exerting pressure on the de facto Micheletti government.
Some members of the business community, political leaders and columnists for conservative Salvadoran media outlets have said Funes should learn from what has happened in Honduras, and not attempt to introduce constitutional reforms like Zelaya's.
Salvadoran analyst Leonel Gómez agreed with Rivas Gallont that events in Honduras could lead to more coups against democracies in the region. "The danger here is that it might motivate other forces to perpetrate other coups d'état like the one in Honduras," said Gómez, who has participated in investigations of corruption and the supply of funds to dictatorships in the region with U.S. Democratic lawmakers Patrick Leahy and the late Joe Moakley.
The expert said that some Guatemalan military officers "would be delighted to receive orders to do the same thing" as their Honduran colleagues.
Centre-left Guatemalan President Álvaro Colom publicly denied that a military coup was being plotted in his country, after Chávez warned of the danger of an overthrow attempt. But Nobel Peace Prize laureate Rigoberta Menchú said vested economic interests in Guatemala could be planning to undermine the rule of law.
Recalling that in the past U.S. governments have "written dark chapters in the history of Central America" through their support for military dictatorships and coups d'état, Gómez urged the administration of U.S. President Barack Obama to "act with greater firmness and in accordance with its principles."
6) Transport Workers to Boycott Honduran Ships
ITF calls for boycott to protest military coup, flags of convenience
Bruce Barnard, Journal of Commerce, Jul 20, 2009 3:18PM GMT
The International Transport Workers Federation called for a worldwide boycott of Honduran-flag merchant ships to protest the military coup in the Central American nation.
London-based ITF said its call for action "is likely to affect the loading and unloading of the 650 ships flying the Honduran flag."
The ITF called on its 656 member unions to take "peaceful" and "lawful" measures to put pressure on Honduras's military government, which deposed President Manuel Zelaya in a coup on June 28. "We have to put real pressure on the Honduran military to allow the country to revert to democracy," ITF General Secretary David Cockroft said.
The ITF had already targeted the Honduran fleet as part of its long-running campaign against flags of convenience. It condemned the Honduran flag as "a low-cost cosmetic ship registration by companies with no link to the country and no intention of employing its citizens onboard."
The boycott would hit Honduras's two main exports – textiles and coffee, which are mostly shipped to the United States.
7) Votes In Afghan Province Could Turn On Loss Of Poppies
Pamela Constable, Washington Post, Tuesday, July 21, 2009
Faizabad, Afghanistan - The economic fortunes of Badakhshan province, a remote and wildly beautiful corner of far northeastern Afghanistan, have risen and fallen over the past seven years with the production of opium poppies.
Not long ago, emerald fields with nodding pink poppy flowers were everywhere, and Badakhshan was one of the country's fastest-growing poppy producers. Today, its golden hills are dotted with freshly harvested wheat stacks, and its 95 percent drop in opium production last year has been hailed as a model by international anti-drug officials.
For many communities, however, the loss of poppy income has meant a return to desperate rural poverty. As national elections approach on Aug. 20, with President Hamid Karzai seeking reelection against a field of 40 challengers, the decision among Badakhshan's voters rests partly on whether they give his government and its international backers credit or blame for the end of the poppy boom.
"The authorities promised our people jobs and projects if they stopped growing poppy, but that never happened," said a teacher here in the provincial capital, who gave her name as Aria. "We know that opium is un-Islamic and makes people addicted, but what about the farmers and their families? When we grew poppy, the people were doing well. Now they are suffering."
8) Tribe Members Held Accountable
Pakistani Order Says Mehsuds Can Be Targeted Over Taliban Leader's Crimes
Joshua Partlow and Haq Nawaz Khan, Washington Post, Tuesday, July 21, 2009
Peshawar, Pakistan - The Sina Diagnostic Center and Trust does not appear to be a menacing enterprise. The clinical pathology laboratory's 15 staff members conduct ultrasounds, X-rays and CAT scans and run free hepatitis and HIV tests for poor people and refugees in this teeming northwestern city.
That did not stop about a dozen Pakistani government revenue officers and police from marching up to the lab's second-story office this month to demand that the owner, Noor Zaman Mehsud, shut it down. They ushered patients and staff members outside, pulled down the metal gates and wrapped white cloth around the padlocks. Within 15 minutes, they were gone. "They just said, 'You are a member of the Mehsud tribe, and we are going to seal up this business,' " Mehsud recalled. "My crime is that I belong to the Mehsuds."
Beyond the frustration of closing a business he ran for nine years and the sting of losing an income averaging $1,400 a week, the most vexing part of Mehsud's situation is that he is on the wrong side of the law. The Pakistani government has declared war on Taliban commander Baitullah Mehsud and his network of several thousand fighters in the nearby tribal district of South Waziristan. And under regulations formulated a century ago by British colonial rulers, Pakistan's tribes are still bound by a legal concept known as "collective responsibility," under which any tribal member can be punished for the crimes of another.
The crackdown on the Mehsuds was spelled out in an order from the top political official in South Waziristan, Shahab Ali Shah, on June 14. Because the Mehsud tribesmen had not handed over Taliban fighters, Shah wrote, he was satisfied that they had acted "in an unfriendly and hostile manner toward the state" and that the tribe's "people and their activities are prejudicial to peace and public tranquillity."
Senior government officials have said repeatedly that their target is Baitullah Mehsud and his followers, not his entire tribe, but Shah's wording was broader. He ordered the "seizure, where they may be found, of all members of the Mehsud tribe and confiscation of movable/immovable property belonging to them in the North-West Frontier Province and the arrest and taking into custody of any person of the tribe wherever he is found."
That sweeping order has led to the closure of dozens, perhaps hundreds, of businesses in towns such as Dera Ismail Khan, Tank and Peshawar in North-West Frontier Province, according to lawyers, human rights officials and residents. One South Waziristan political official, who spoke on the condition of anonymity, said 25 Mehsuds have been arrested in Dera Ismail Khan and Tank.
"This is the law of the jungle, not for civilized people. They are treating people like animals," said Noor Zaman Mehsud, the 39-year-old lab owner, who denied he had any connection to the Taliban. "If I am a criminal, they should arrest me. But they are giving other people's punishments to me."
A few hundred thousand people in Pakistan belong to the Mehsud tribe, a Pashtun network divided into three major clans: the Manzai, the Bahlolzai and the Shaman Khel.
9) U.S. Military Holds Iraqi Journalist Without Charge
Quil Lawrence, NPR, July 20, 2009
American forces arrested Iraqi journalist Ibrahim Jassam last year and continue to hold him without charge in a U.S. military prison camp - even as the United States transfers jurisdiction to Iraqi authorities.
Jassam, a cameraman, shot footage of Iraq's violence during times when it was impossible for Western reporters to move safely around Iraq.
He was 29 years old in 2006 when he began working for Reuters news agency.
But as with many cases in the past, the U.S. military apparently thought Jassam's photos looked a little too close to the action, suggesting a connection to insurgents. One morning in September 2008, hours before dawn, a combined U.S. and Iraqi force cordoned off Jassam's neighborhood. They broke down the door of the house where he lived with his parents and siblings, handcuffed Jassam and dragged him away in his underwear.
Months passed before the family got word that Jassam was in a U.S. military prison. Eventually, they visited him. But they are still waiting for any sort of criminal charge to be made against him.
An Iraqi court document from November 2008 says that since the Americans provided no evidence or confession, Jassam should be released. Michael Christie, Reuters bureau chief in Baghdad, says arrests like this have been a problem throughout the war, especially for video journalists.
Reuters has raised Jassam's case in Baghdad and Washington. Christie says Jassam did a good job in a dangerous city. "We have to assume that he was detained for the work that he was doing as a journalist. Until we see otherwise, until the evidence is declassified, he deserves the presumption of innocence," Christie says.
Iraqi journalists have been regularly detained by U.S. forces through the course of the American occupation; several have been killed when mistaken for insurgents. According to Mohamed Abdel Dayem, of the New York-based Committee to Protect Journalists, Jassam is the only one still in U.S. custody.
Jassam's sister says he isn't eating enough and looks thin. She says her brother knows that the Iraqi court cleared him in November, and that he can't understand why the Americans keep holding him, for 10 months now and counting.
10) Chevron Expects to Fight Ecuador Lawsuit in U.S. Wall Street Journal
As Largest Environmental Judgment on Record Looms, the Oil Company Reassures Shareholders It Won't Pay
Ben Casselman, Wall Street Journal, July 20, 2009
Chevron Corp., which expects to be on the losing end of a long-running environmental lawsuit in Ecuador, is turning its attention to fighting the expected multibillion-dollar verdict in the U.S.
The plaintiffs in the case, residents of Ecuador's oil-producing Amazonian rainforest, are seeking to hold Chevron responsible for environmental contamination they say was caused by Texaco, which operated in Ecuador from 1964 to 1990 and was bought by Chevron in 2001. An expert appointed by the Ecuadorian court has recommended the judge award the plaintiffs $27 billion in damages from Chevron, which would be the biggest environmental judgment against an oil company to date.
Chevron denies the allegations, arguing that Texaco's operations in Ecuador met local and international standards, that a $40 million cleanup effort in the 1990s resolved any environmental liability the company had there, and that any remaining problems are the responsibility of Petroecuador, the state-run oil company that took over Texaco's operations.
The stakes are high. Damages of $27 billion would represent roughly a tenth of the company's 2008 revenue, and a record-setting judgment could tarnish Chevron's image at a time when it has been trying to establish itself as environmentally friendly.
Chevron itself has never operated in Ecuador, and Texaco pulled out in 1992, leaving behind almost no assets for the court to seize in case of a judgment against the company. Therefore the plaintiffs will need to try to enforce any ruling in a country where Chevron does have assets, most likely the U.S.
Chevron has been reassuring shareholders that it doesn't expect to be forced to pay any judgment imposed by Ecuador. "We're not paying and we're going to fight this for years if not decades into the future," Chevron spokesman Don Campbell said in an interview.
Andrew Woods, a lawyer for the plaintiffs, accused Chevron of stalling. Chevron denies stalling, but has stressed to investors that any enforcement will likely take years.
The most immediate threat to Chevron, according to analysts, could be the impact a ruling would have on its reputation, particularly as the company seeks permission to drill in other developing countries.
The plaintiffs are hoping negative publicity will lead Chevron to settle the case.
11) So Far From God, So Close to Wall St.
Jeff Faux, The Nation, July 15, 2009 [print edition: August 3]
This past winter both the outgoing director of the CIA and a separate Pentagon report declared political instability in Mexico to be on a par with Pakistan and Iran as top-ranking threats to US national security. It was an exaggeration; Mexico is not yet a "failed state." On the other hand, it is certainly drifting in that direction.
A vicious war among narco-trafficking cartels last year killed at least 6,000 people, including public officials, police and journalists. The country leads the world in kidnappings (Pakistan is second). And with the global crisis, the chronically anemic economy is hemorrhaging jobs, businesses and hope.
Not surprisingly, voters turned against President Felipe Calderón's right-wing National Action Party (PAN) in the July 5 midterm elections. But the left-wing Democratic Revolutionary Party (PRD)-which many believe was robbed of the presidency in the 2006 election-has ripped itself apart with factional infighting. So frustrated Mexicans gave their Congress back to the Institutional Revolutionary Party (PRI), whose decades of corrupt authoritarian rule were supposed to have permanently ended in 2000. At least, thought many voters, the PRI knows how to keep order.
Mexicans are of course responsible for their own country. But geography has always forced them to play out their history in the shadow of their northern neighbor. "Poor Mexico," goes the saying. "So far from God, so close to the United States." Today, Mexico is a prime example of the socially destructive effects of the neoliberal economics promoted throughout the world by the US governing class.
The North American Free Trade Agreement-proposed by Ronald Reagan, negotiated by George Bush I and pushed through Congress by Bill Clinton in 1993-is both symbol and substance of neoliberalism. It was sold to the citizens of the United States, Mexico and Canada with the promise that free trade in goods and money would transform Mexico into a booming middle-class economy, dramatically reducing illegal immigration and creating a vast market for US and, to a lesser extent, Canadian exports.
Fifteen years later, Mexico is still unable to create enough jobs to employ its people. Out-migration has doubled, and on both sides of the US-Mexico border labor-market competition has kept wages down. At the top, income and wealth have ballooned. It is no accident that among NAFTA's prominent godfathers were former Treasury Secretary Robert Rubin (Democrat) and former Federal Reserve chair Alan Greenspan (Republican), whose fingerprints are all over the current global financial disaster.
I was an opponent of NAFTA. Still, I thought the best case for it was that efficiencies from economic integration could at least make US and Mexican businesses more internationally competitive. But even that argument turned out to be worth no more than a share of Bernie Madoff's hedge fund.
Several years ago I gave a speech to a group of businesspeople in Mexico City. Those from the multinational banks and corporations thought NAFTA was a great success, but smaller Mexican businessmen saw it differently. You Americans, said one, promised that with your technology and our cheap labor, we'd be partners in competing with Asia. Then you opened up your markets to China and invested there instead. "Sure," he said. "We can make TV parts for half what it costs in the United States. But the Chinese can make them, and ship them, for a tenth. So instead of closing the gap between Mexico and the United States by raising wages, we have to narrow the gap between Mexico and China by lowering them."
When I mentioned the conversation to a New York investment banker who had lobbied for NAFTA, he conceded that his side may have talked vaguely about partnership with Mexico. But he shrugged and added, "Things changed"-that is, profit opportunities in China dwarfed anything Mexico had to offer.
The Wall Streeters had little interest in making Mexico more competitive. They also had little interest in making the United States more competitive. Their purpose was just the opposite: to disconnect themselves and their corporate partners from the fate of any particular country.
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