Exhibit B.Nearly two and a half years ago, the North American Free Trade Agreement began its assault on trade barriers that, depending on what you think of tariffs and duties, either served to isolate or protect the United States, Canada and Mexico.
NAFTA opponents spanning the ideological spectrum from Ralph Nader to Pat Buchanan uttered grim nightmare scenarios. Hundreds of thousands of people would lose their jobs, they cried, and the U.S. standard of living would continue its slide toward that of a Third World country.
Meanwhile, NAFTA supporters spewed forth free-market rhetoric, promising that new markets north and south of our borders would create jobs too numerous to count. Plus, they argued, the alliance was needed to counter the European Community, an increasingly capitalistic China, and the blossoming economic powers of Southeast Asia.
Today, even with two full years worth of labor and trade data to analyze, pundits are still engaged in a battle royale of ideas. For every statistic NAFTA backers roll out espousing the treaty's beneficence, detractors cite numbers that trumpet its failings.
Here in Washington state, assessments of NAFTA are no less muddled. State government officials and corporate brass are gleeful in their praise, while union leaders and progressive activists are doing their best "I told you so."
About the only concrete, objective piece of evidence one can grab onto and hold comes from the U.S. Department of Labor. The feds offer an extensive benefits program to workers upon demonstration that they lost their jobs because of NAFTA-either due to increased imports from Canada or Mexico that cut into their company's sales, or because their company simply moved its operations to one of those countries.
So far, 2,475 workers in Washington state have qualified to receive these benefits, which include unemployment compensation, job training, moving expenses, and job-search assistance. Employees from 75 Washington companies have applied for benefits, placing our state third behind only Pennsylvania (96) and Texas (90). (The national average is about 17 companies per state.)
Of those former 2,475 jobs, 1,228 - just about half - disappeared from Washington state's already beleaguered forest-products industry. Workers from 25 companies that deal in timber, shingles, shakes, logging machinery, transportation, fencing, and cabinets are now receiving taxpayer-financed assistance from the government. Since the program began two years ago, $2 million in public money has been spent in Washington state on NAFTA benefits.
As far as finding numbers on the positive side of the job ledger, well, there's no one place to look. Despite the obvious political benefits of keeping track, the feds have set up no official mechanism to count the number of jobs created because of NAFTA. It is easy, however, to find a state government bureaucrat who will lead cheers around the treaty. "There is no question that NAFTA has had a beneficial impact on the state" said John Anderson, a state Department of Community, Trade, and Economic Development staffer who helps find Canadian and Latin American markets for homegrown exports.
In a narrow sense, Anderson is right. Wood products exports from our state to both Canada and Mexico have increased sharply since NAFTA took effect on Jan. 1, 1994. From 1993 to 1994, exports to Mexico surged from $514,000 to $6.6 million. (That figure dropped a bit last year because of the peso devaluation.) North of the border, exports rose by 9.7 percent in 1994 to $145 million, and by another 34.4 percent last year to $195 million.
But if Washington companies are selling so many more 2-by-4s and coffee tables to Mexico and Canada, why have 1,228 forest-products workers lost their jobs because of NAFTA? Maybe it's because the tariff-busting treaty has opened the floodgates for cheap Canadian wood products to be sold in Washington. Surprisingly, the numbers don't bear this out.
From 1993-the year before NAFTA took effect- to 1995, imports of Canadian lumber (2-by-4s, plywood, etc.) and value-added products (cabinets, window frames, etc.) have risen from $1.59 billion a year to $1.81 billion, a modest 14 percent increase. Further, imports of Canadian softwood lumber-the source of a bitter cross-border dispute-have risen by only 14 percent as well, from $1.08 billion in 1993 to $1.23 billion last year.
The Shell Game
So if the increase in Washington's wood-products exports is far and away outpacing the rise in Canadian imports, and Mexican exports are going through the roof, how could NAFTA have caused 1,228 forest-industry workers to lose their jobs? No one seems to know.
John Perez-Garcia is a forestry professor and researcher with the UW's Center for International Trade in Forest Products. When asked to explain the job losses, he said, "I don't think it has anything to do with NAFTA." Colleague Thomas Waggener, a nationally respected researcher who also works in the UW forestry school, agreed, "I think it has more to do with the current dynamics of the market."
Anderson, of the state trade office, acknowledged outright, "These workers lost their jobs for reasons unrelated to NAFTA. But because of NAFTA, they had access to a benefits program. That's the bottom line." And, in its March 1996 newsletter, the United States-Mexico Chamber of Commerce, which has worked intimately on NAFTA issues, declared, "It is clear that the NAFTA [benefits program] is a NAFTA program but not a NAFTA phenomenon-the program provides assistance whether or not NAFTA was the cause of job displacement."
Since the 1980s, tens of thousands of forestry and wood-products jobs in Washington state have evaporated, mainly due to advances in automation and other technologies, a decrease in the supply of harvestable forest land, and a sharp increase in the cost of the timber that still can be logged. Wild fluctuations in demand are also to blame.
With such fundamental changes afoot, how can anyone possibly determine whether any given forest-product worker lost his or her job because of NAFTA or the Endangered Species Act? That chore falls into the hands of the U.S. Department of Labor. Analysts in Washington, D.C., examine trade and job data to determine whether a certain company's layoffs can be attributed to NAFTA.
They have their work cut out for them: there are only three analysts, and between them they've reviewed petitions from 97,593 workers in the past two years. Said Greg Hitchcock, one of the analysts, "There's definitely a layer of investigation." But as the above figures show, in the forest-products industry, at least, the Labor Department may be barking up the wrong tree.
Discrepancies cloud the case of the utility industry as well. Consider the Washington Public Power Supply System. Last year, 350 former WPPSS employees were approved to receive NAFTA benefits. WPPSS spokesperson Mary Ace said the utility, which operates a nuclear power plant in Richland, was and remains under tremendous pressure to lower its costs. Hence, the utility has reduced its workforce from an all-time high of 1,900 in 1992 to 1,300 this year.
WPPSS sells all of its power to the federal Bonneville Power Administration, which is also feeling intense heat to reduce costs. Driving this downward pressure, however, isn't cut-rate electricity imports from Canada. It's deregulation of the utility industry and plummeting natural gas prices, says BPA spokesperson Lynn Baker. "NAFTA just isn't the story," she said. "It just isn't relevant."
Serious questions arise, namely: Is NAFTA getting a bad rap in Washington state? Is the NAFTA benefits program a convenient way to funnel federal dollars to victims of downsizing that is occurring independent of the treaty? By artificially inflating the number of NAFTA casualties, would the U.S. government be using laid off timber workers, for example, as poster children in its cross-border scraps with Canada, while diverting attention away from the more serious problems the industry faces?
The loss of 1,228 forest-product jobs certainly gave U.S. negotiators more ammunition in its ongoing battle with Canada over the import of softwood lumber, which U.S. officials have complained was being over-subsidized and therefore represented an unfair labor practice. The 14-year dispute was settled in February, with Canada agreeing to curb exports to the U.S. The victory was a tribute to the resolve of U.S. officials, who, in this era of supposed "free trade," were able to reverse this trend and win concessions to protect an industry that is self-destructing.
It's important to note here that government subsidies are not specifically covered under NAFTA, which further calls into question the legitimacy of granting NAFTA benefits to laid off American workers as a result of Canadian wood-products imports.
The bigger political issue here is the ability and willingness of U.S. officials to manipulate economic data to further their interests and those of major American corporations. In the case of NAFTA, it is clear that laid off workers, while clearly benefiting from NAFTA's job-training and other programs, are being used as pawns in a much larger economic chess game. Further, labeling them NAFTA casualties also obfuscates other trends-namely the folly of radical deregulation, the shifting away from resource-dependent industry, the march toward a one-world economy, and the Third Worldization of the United States.
 |
 |
 |
 |
 |