Stopping the rot of child poverty/Free Trade Connection

George Galloway
October 07 2008

In my constituency, 79% are affected. They are not alone. The government cannot ignore its responsibilities any longer

Last Saturday’s rally by the Campaign to End Child Poverty deserved wider coverage than it received. The campaign’s work and research findings, published last week, are a reminder, for those who needed it, that economic hardship and a widening chasm between rich and poor did not begin with the credit crunch. They go back to before the Blair years. They continued through them and under Gordon Brown.

The figures on child poverty on Britain, in the third term and 11th year of a so-called Labour government, returned with majorities beyond the dreams of Harold Wilson, are symptoms of a deep sickness in our society.

In my own constituency of Bethnal Green and Bow are some of the highest concentrations of child poverty anywhere in the country. There are 23,450 children, 79%, living in poverty. Neighbouring Poplar and Limehouse is not that different.

Across Tower Hamlets as a whole in 2007, two-thirds of children were living in “income-deprived families” (how Orwellian the language of public policy has become), making it the most deprived borough in England on that measure.

The incidence of child poverty is directly linked to lack of work and dependency on benefits. Despite these root causes children, parents, teachers and education officials in Tower Hamlets have done extraordinarily well in raising the level of educational achievement – a success praised by the End Child Poverty Campaign.

Responding earlier this year to news that the government was going to miss its target of halving child poverty by 2010, Sir Al Aynsley-Green, England’s children’s commissioner, said:

Poverty is, in our view, the single most pernicious influence that is blighting the lives and prospects of our young people. We are one of the richest countries in the world. Yet Unicef has found that we have some of the highest levels of poverty. Poverty underpins most of the other social issues we are concerned with.

We also have the unhappiest children in Europe. Beneath the aggregate statistics lies an ocean of suffering. It is not simply the overall family income that is stunting the lives of children in east London. Housing, health and welfare inequalities are cutting them down at an early age. It is by no means unusual for constituents to turn up to my surgery looking to be rehoused because they are living 12 or 14 to a two-bedroom flat.

To repeat – this was going on throughout 2005 to 2007, and before I became the MP. It was going on while New Labour and their clique were boasting endlessly of the economic bounties they were bestowing on Britain. It was going on while Gordon Brown assured us – against all experience and contradicting the insights of even sophisticated pro-capitalist economists – that he had abolished the boom/slump cycle.

And through those years the people of east London saw the gleaming spires of finance capital soar higher and higher in the City of London and Canary Wharf, dwarfing the inhabitants in between. The wealth would trickle down sides of the Gherkin and the NatWest Tower, we were assured. Instead, the poorest got swept down the gullies. And now it is going to get a lot worse, quickly.

The official anti-poverty strategy for Tower Hamlets cites the 90,000 jobs “created” at Canary Wharf as central to progress. But scarcely any of those jobs went to people living in Tower Hamlets. And now, as the empty Lehman Brothers offices bear witness, the question is how many of those jobs are going to go over the next few months.

It is not only Brown and New Labour who stand hopelessly exposed by the turn of events. So too are David Cameron and the Tories. Their call for an end to casino capitalism and for tighter regulation of the finance sector falls into the category of telling the biggest whopper you can think of in the hope that the public will be so stunned they’ll doubt their own critical faculties.

This is the same Cameron who says he wants to be as radical in the social field as Margaret Thatcher was in economics. It sounds like a darkly mumbled line from Marlon Brando in the Godfather. I can only imagine that it means something like shutting every social services department and getting rid of red-tape such as legislation guaranteeing children’s rights. It was under Thatcher that child poverty doubled.

The steps proposed by both parties are hopelessly inadequate. The Liberal Democrats don’t even enter the picture thanks to their hapless leader choosing this of all moments to lurch towards the free market – watch the space between those shoulder blades.

As this financial crisis deepens, people will want radical policies – more like the New Deal of Roosevelt than Blair’s workfare scheme of the same name. Already public ire has turned against the stockbrokers, the hedge-fund managers and the City slickers.

It is becoming clearer by the day that an emergency programme of radical anti-poverty and anti-recessionary measures is required. The signal from Brown’s reshuffle is that he is going to do exactly the opposite. Who on earth in the Brown circle thinks the Peter Mandelson has traction with Labour people? Putting him in charge of business is a sign that it will be the bankers and the chief executives, and no one else, who get to enjoy a lavish welfare state and economic protection.

From the Chicksands Estate and the Roman Road there’s a burning resentment at what’s been done to this country and its children. A glance at the history of the East End should give the powers that be fair warning: they’d be ill-advised to ignore the suffering lapping at their gates.


Mllions’ of UKChildren live in poverty


Millions of children in the UK are living in, or on the brink of, poverty, a report claims.

The Campaign to End Child Poverty says 5.5 million children are in families that are classed as “struggling” – 98% of children in some areas.

The campaign classes households as being in poverty if they are living on under £10 per person per day.

A government spokeswoman said it had lifted 600,000 children out of poverty and was committed to the cause.

The Campaign to End Child Poverty is a coalition of more than 130 organisations including Barnardo’s, Unicef and the NSPCC.

According to its research, there are 4,634,000 children in England living in low income families, 297,000 in Wales, 428,000 in Scotland and 198,000 in Northern Ireland.

It says 174 of the 646 parliamentary constituencies in Britain have 50% or more of their child population in, or close to, the poverty line.

The parliamentary constituency with the highest number of children in or close to poverty is Birmingham Ladywood, with 81% (28,420 individuals).

Campaign director Hilary Fisher said the figures were “absolutely shocking”.

She said: “There are currently 3,900,000 children in the UK that are classed as actually living in poverty, which impacts on every aspect of a child’s life.

“A child in poverty is 10 times more likely to die in infancy, and five times more likely to die in an accident.

“Adults who lived in poverty as a child are 50 times more likely to develop a restrictive illness such diabetes or bronchitis.”

Ms Fisher said some families could not afford school uniforms, and chose schools for their children based on uniform cost – which was “not acceptable”.

She said: “The government has lifted 600,000 children out of poverty, but 100,000 have gone back for each of the last two years.

“If the government does not allocate £3bn in tax credits and benefits in the next budget, then their plans to reduce child poverty will fail.”

A spokeswoman for the Department for Children, Schools and Families said the government was committed to the cause.

She said: “We have lifted 600,000 children out of poverty, we are introducing free nursery education for all two, three and four year olds and have seen an increase in educational outcomes at all ages.”

She said local authorities and other service providers had to help it raise family incomes, encourage people to apply for tax credit and benefits and help parents work.

She said the latter was known to be one of the best ways for families to get out of poverty

Donald Hirsch, author of several reports on child poverty, said a single-wage couple with two children would stop getting Working Tax Credit when they were on £18,500 a year – leaving them just above the poverty line.

He said: “The official government measure of poverty is families below 60% of median income before housing costs, so families with this composition on Working Tax Credit will be close to the poverty line.”

The report’s figures are made up from Child Tax Credit and Working Tax Credit data, and have been calculated by the Centre for Economic and Social Inclusion.

Another area with high child poverty is Bethnal Green and Bow, which has 79% (23,450) of its children in low income families.

The constituency of Bradford West has 75% (24,900) of children in or near poverty, while Nottingham East has 68% (12,360).

Government pledge

An estimated 98% of children living in two zones in Glasgow Baillieston – Central Easterhouse and North Barlarnark and Easterhouse South – are either in poverty or in working families that are “struggling to get by”.

And there are 58% of children in Swansea East (10,470) in families of this description.

The constituencies with the lowest levels of families in, or near, poverty are Buckingham and Sheffield Hallam, both with 17%.

At last week’s Labour Party conference, Prime Minister Gordon Brown said child poverty “demeans Britain” and repeated his party’s pledge to halve child poverty by 2010, and ultimately to end it.

During his speech he said: “The measures we have taken this year alone will help lift 250,000 children out of poverty.

“The economic times are tough – of course that makes things harder – but we are in this for the long haul. The complete elimination of child poverty by 2020.”

Harry Potter author JK Rowling recently donated £1m to the Labour Party, saying she was motivated by Labour’s record on child poverty.

But shadow work and pensions secretary Chris Grayling said the figures “underline the vast social divide” within cities.

‘Broken Britain’

He added: “There are examples of wards within cities where hardly any children live in poverty but sitting alongside these wards are others where virtually every family lives below the poverty line.

“This just goes to show the extent to which Britain is truly broken.”

The Scottish government said it was helping low-income families with a council tax freeze, abolishing prescription charges and piloting free school meals.

“However, the limited nature of devolved powers restricts our ability to act,” a spokesman said.

“We need significant extra investment by the UK government.”

The report’s results are for the period of August 2006, except for ward or zone breakdowns, which are for August 2005.

The Campaign to End Child Poverty will stage a rally in London’s Trafalgar Square on Saturday 4 October called Keep The Promise, where it will call on Gordon Brown to keep Labour’s promises on child poverty.

Mapping child poverty

Millions of children in the UK are living in or on the brink of poverty, according to a report from the Campaign to End Child Poverty.

The umbrella organisation, which includes Barnardo’s, UNICEF, Save The Children and the TUC, has released data for every parliamentary constituency in the UK.

It found that in Birmingham’s Ladywood constituency, 81% of children were living in low income families – the highest proportion in the UK.

Low income means families where no-one is working more than 16 hours a week or where the family is receiving the full amount of Working Tax Credit.

The campaigners say this is not a direct measure of exactly how many children are in poverty, but is a good indicator of which areas have the highest child poverty levels.

Related Story

Britain’s current military budget is £34 billion for 2008. I am guessing war is more important then people.

Treasury has no room to manoeuvre, IFS warns

Larry Elliott, economics editor
March 13 2008 17:27 GMT

Alistair Darling leaves 11 Downing Street

Alistair Darling leaves 11 Downing Street before his budget speech. Photograph: Andrew Parsons/PA

The government is in danger of having to raise taxes or cut spending after the next election to address the weakness of the public finances, Britain’s leading tax experts said today.

In its traditional budget post-mortem examination, the Institute for Fiscal Studies said that there had been a £7bn deterioration in the state’s coffers since Alistair Darling’s pre-budget report five months ago.

It added that the Treasury now had no room for manoeuvre with either of its fiscal rules – only borrowing for investment over an economic cycle and keeping national debt below 40% of GDP. Darling said in his budget that debt would rise to 39.8% of GDP by 2010-11 and the IFS warned that the rule designed to make public investment financially sustainable could easily be breached.

Robert Chote, the director of the IFS said: “All in all, there is a danger that we are seeing the history of Labour’s second term repeating itself. Gordon Brown insisted repeatedly after his forecasts began to go awry in 2002 that there was no problem with the public finances – but as soon as the 2005 election was won he announced a spending squeeze and introduced a series of tax-raising Budgets and Pre-Budget Reports.”

With the government obliged to hold an election by the spring of 2010, the IFS believes that any further action to mend the hole in the public finances will have to wait.

“If the 2008 Budget was not a good time to deal fully with the underlying weakness of the public finances, it seems unlikely that next year’s will be either. If there is a fiscal repair job to be done, Darling and Brown may be leaving it until after polling day”, Chote added.

The IFS breakdown of the Treasury’s Red Book showed that there had been an underlying deterioration in the public finances, with the credit crunch, the weaker housing market and softer consumer spending all having an impact on receipts.

The IFS said in five years’ time the Treasury has decided to fill more than £2bn of this gap with the tax increases announced in Wednesday’s budget and up to £4bn by assuming that there would be a more aggressive squeeze on public spending than had previously pencilled in. This still left the Treasury looking to borrow slightly more in 2012-13 than it thought in October.

“This implies an interesting shift in the way in which the Chancellor hopes to reduce Government borrowing over the next five years”, Chote said.

“He gets less help from a rising tax burden, and slightly smaller savings on public spending over the CSR period than he thought in October. To make the numbers add up he is now looking for a £8bn spending cut over the two years covered by the 2009 spending review – compared to a £4bn cut over the three years covered by the 2007 CSR. The 2009 Spending Review will not of course bite until after the next general election.”

The IFS identified three main risks to the Treasury’s projections for public spending. It said there was a chance that a sharper economic slowdown than the chancellor is predicting, with every half-point under-shoot in growth causing a £4bn increase in borrowing. In addition, tax revenues might be less buoyant even if the downturn proved to be a mild one.

Finally, there might be political pressure on the Government to make its one-off giveaways on fuel duty, winter payments to pensioners and transitional tax relief for charities permanent features of the tax system at a total cost of £2bn a year.

Well like the US They will attempt to blame the poor and cut Social Services. That senerio is as old as warmongers have existed.

A few years back, I remember when Systematically Social Services around the world were cut. I can only assume it was so Governments could spend more on war. It may have also been part of the”Free Trade”Agreements that were signed by countries.  This would of course provide a cheap desperate workforce for greedy corporations. If in fact anything like this was put into any Free Trade Agreements, at the expense of the citizens of any country, those stipulations should be revisited and removed from any and all agreements.  In essence the poor were Sanctioned. The  poverty  has been steadily growing in those countries.  Many are working full time jobs and still remain homeless. Many are suffering from malnutrition which has long term affects.

A Little History

The End of a Cycle of Plundering

The Debt Crisis

How they got there

Broadly speaking, “the privatization of state enterprises is always linked to the renegotiation of a country’s foreign debt,” notes Belgian economist Eric Toussaint, president of the Committee for the Abolition of Third World Debt.The roots of privatization policy can therefore be traced back to the so-called “debt crisis” ignited by Mexico’s payment moratorium in August 1982.

At that time, Washington was facing a crisis in its global hegemony caused by the United States ‘ military defeat in Vietnam, domestic antiwar protests allied with the black civil rights movement, and the demands of Third World countries. This erosion of power culminated when the Iranian Revolution of 1979 sparked the hostage crisis the following year.

The convergence of these multiple challenges laid bare the declining hegemony of the world’s most powerful nation and ushered in a long-term shift: “Domestic and global New Deals were abandoned, and the United States tried to restore its military prestige. To pay for increased military expenses for the Second Cold War, it raised interest rates and began to compete actively for international capital in search of investment. During the 1980s, it attracted the global surplus and precipitated the ‘debt crisis,’ signaling the abandonment of the promise of ‘development.’”As the U.S. Federal Reserve hiked interest rates, loans to poor countries were drastically curtailed, preventing them from obtaining new loans to repay their debts. As a result, Third World debt became unpayable.

“Free Trade” Puts Democracy in Peril

by Arnie Alpert

April 15, 2001When the subject of international trade comes up, most people probably think about imports of cars made in Japan, export of Midwest grain, or perhaps the shipment of fabric pieces to Mexico where they are sewn into garments and shipped back to U.S. retail stores. Until recently, free trade agreements were about reducing tariffs-taxes on cross-border shipments of goods-to reduce the cost of international trade.

Not any more. Now what passes for “free trade” agreements goes way beyond tariff reduction. Under the rules of the World Trade Organization (WTO), provisions of the North American Free Trade Agreement (NAFTA), and the proposed Free Trade Area of the Americas, virtually any law that hinders international commerce can be considered a “barrier to trade.” This new expansive view of trade puts democracy at risk, along with the rights of workers, the protection of the environment, and the health of communities.

Take the case of MTBE, a gasoline additive that eliminates pollutants from automobile emissions but contaminates groundwater. Two years ago the New Hampshire legislature passed the Safe Drinking Water Act, which authorizes the Commissioner of Health and Human Services to set limits on MTBE in gas sold in the state.

Sound reasonable? Probably not to Methanex, a Canadian corporation that produces methanol, one of MTBE’s components.

When California adopted laws to phase out MTBE, Methanex filed suit. Under NAFTA’s Investor Rights clause, laws that reduce a Canadian or Mexican company’s ability to do business in the United States are considered expropriation of the company’s property, comparable to a government seizure of property. (The same applies to Canadian or Mexican laws affecting a U.S.-based company.) If Methanex wins, the United States will be forced to pay compensation. The company is demanding $970 million in damages. The case will not be heard in an open court, but in a closed session before a panel of trade experts.

“Cases companies could never hope to win in domestic courts” are headed for NAFTA and WTO dispute resolution panels, according to Robert Stumberg of the Harrison Institute for Public Law of Georgetown Law Center, who testified March 14 at the State House in Concord. “There’s a huge power shift going on,” he said, and the states are among the losers. Even municipal ordinances could be challenged.

Governments Pay Polluters

Here’s some examples of cases brought under NAFTA:

The U.S.-based Ethyl Corporation forced Canada to pay $13 million in damages and drop its ban on the dangerous gasoline additive MMT, a known toxin that attacks the human nervous system. The U.S.-based Metalclad Corp. sued a Mexican state that blocked construction of a toxic waste disposal site. Metalclad claimed that the environmental zoning law forbidding the dump constituted an effective seizure of the company’s property, and was awarded $16.7 million by a NAFTA arbitration panel. The Canadian funeral home chain Loewen Group sued the U.S. government for $750 million in cash damages after a Mississippi court found Loewen guilty of malicious and fraudulent practices that unfairly targeted a local small business. Loewen argued that the very existence of the state court system violates its rights. A Massachusetts law designed to deny State contracts with firms doing business in Burma, which is ruled by a brutal dictatorship, was challenged before the WTO. Had the law not been stricken down by the U.S. Supreme Court, the WTO arbitrators would probably have determined it to be in violation of WTO rules on government procurement.

Neither NAFTA nor the WTO have power to overturn state laws, but you can bet that if WTO and NAFTA tribunals find public health, economic development, and environmental laws to be illegal trade barriers, the federal government will find ways to persuade states to change their laws.

That’s the direction “free trade” agreements have taken us, what Stumberg calls “a trade policy that is less accessible and accountable to the people of any country, and a trade system that is more accessible and responsive to multinational corporations that no longer see themselves as the citizens of any particular country.”

When President George W. Bush and the other heads of state will meet April 21 to 22 at the Summit of the Americas in Quebec City, the proposed FTAA will be a major item on their agenda.

The FTAA negotiations, which began in 1994, have taken place in secret, so it is not possible to say for sure what is being proposed. There is informed speculation, though, that it will go “far beyond NAFTA in its scope and power, according to Maude Barlow, a trade specialist with the Council of Canadians.

“Essentially, what the FTAA negotiators have done, urged on by the big business community in every country, is to take the most ambitious elements of every global trade and investment agreement-existing or proposed-and pull them all together,” Barlow says.

For example, government support of public services could be considered illegal subsidies under new rules to “liberalize” government purchasing. Private education companies could claim taxpayer support for public schools to be an illegal subsidy. Governments then might be forced to provide an equal subsidy to the private companies, or drop their support for their own schools. Other services offered by government entities, like water and health care, would face a similar challenge by multi-national companies, accountable to shareholders rather than citizens.

Sounds far-fetched? United Parcel Service has already sued Canada for $230 million, claiming that Canada’s publicly funded network of mailboxes and post offices give Canada Post an unfair advantage.

“Global trade agreements are intended to limit government power, including state and local power,” said Professor Stumberg. What that means is that the promotion of what is called “free trade” puts democracy itself in peril.

The Free Trade Area of the Americas: It’s not about trade????

by Murray Dobbin
April 19 2001

Free trade agreements have never been primarily about trade. This is true of the FTAA deal being dicused, amidst draconian security measures, in Quebec City.

From the original Canada-US free trade agreement and NAFTA to the WTO agreements and the proposed Free Trade Area of the Americas, these international treaties are about making it easier for the world’s largest corporations to lower their costs. It allows them to seek out the cheapest workers, the most lax environmental laws and to use the threat of relocation to get what they want. The notion that any country, its workers or consumers benefit from such agreements is a myth.

Anyone doubting what these agreements are really about sould examine NAFTA. The trade deal between Canada, the US and Mexico is the template for the FTAA. Everything that is in NAFTA – and more, of course – will be in the FTAA. One of the things in NAFTA is Chapter 11, the chapter on investment. (A virtually identical chapter is planned for the FTAA, as a leaked document revealed this week.) The chapter allows corporations to sue countries directly. In effect, corporations get to implement the terms of a treaty signed by sovereign governments.

These law suits are determined not by our courts but by appointed tribunals of trade experts meeting in secret. Their job? To determine whether our laws have reduced the level of profit that a corporation would have made if the law wasn’t in place. And this includes future profits. When Canada banned the gasoline additive MMT because it had evidence that it was a neuro-toxin, the product’s manufacturer sought $250 million in compensation through NAFTA. Canada threw in the towel half way through the hearing, publicly apologized to Ethyl Corporation, paid them $20 million, and withdrew the ban.

Canada Post is threatened by a $234 million NAFTA suit because the giant US courier UPS can’t stand the competition. British Columbia’s ban on bulk water exports is the subject of a $900 million suit. Canada has already lost another NAFTA case in which we were sued for complying with an environmental treaty, the Basel Convention on the Transboundary Movement of Hazardous Wastes. S.D.Myers lost business and profits when we stopped sending toxic PCB’s over the border.

Promoters of free trade portray opponents as selfish – trying to deny Mexicans good paying jobs. In fact, Mexico and its workers have suffered under NAFTA. It’s true exports have increased exponentially – but not as quickly as imports. Mexico is facing a balance of payments crisis as a result of “opening” its economy. Since NAFTA came into effect in 1994 the gap between US and Mexican manufacturing wages has grown by some 30 percent. A recent study by the Washington-based Economic Policy Institute and the Canadian Centre for Policy Alternatives,* examined theimpact of NAFTA on workers in the three countries.

It revealed that manufacturing wages in Mexico had fallen 21 percent since NAFTA came into effect. Virtually all of the NAFTA-created jobs are in the border area Maquiladoras where wages are deliberately suppressed to attract US companies. Domestic manufacturing wages are twice what they are in the Maquilas.

What about Canada? The EPI study shows that at the end of the 1990s manufacturing employment was still six percent below its 1989 level. Canada experienced a net destruction of 276,000 jobs up to 1997. This happened despite an annual average trade surplus of $19.7 billion during the 1990s, more than double the average in the 1980s. Average per capita income fell steadily during most of the 1990s and only regained 1989 levels in 1999. Economic growth and average unemployment were worse in the free trade 1990s than in any decade since the 1930s.

If we polled Canadians about whether or not they were in favour of these specific results of expanded trade we know what the answer would be. But most pollsters simply ask are you in favour of expanded trade? The results are totally predictable. This week a CROP poll said 57% of Canadians support expanded trade and 25% oppose it. Even after a ten year barrage of supportive editorials and business propaganda, Canadians are wary about free trade and know who benefits: Forty-one per cent say businesses benefit most, 32 per cent say governments do, 11% say consumers do and just 2% think workers do.

Another poll this week revealed that 90% of Canadians say they want public hearings and a parliamentary debate before the FTAA is signed. Many of those who feel most strongly about the issue of closed door negotiations are in Quebec City demanding to be heard. Free trade proponents ask the rhetorical question: Who do these demonstrators represent? The answer may just be the 90% of Canadians who think its time these negotiations were opened up to public scrutiny. Such exposure would doom the FTAA to certain defeat.

* The full study on the impact of NAFTA on workers in the three countries can be seen on the CCPA’s web site:

Now is the time to lift those out of poverty and end the war coffers exuberant spending, at the expense of the poor. Cause and affect. Free Trade also cuauses pollution as Corperation can and do pollute ufetered and if any community Goverment wants them shut dow the corperation sue the Government for lost profit and wins. Yes you can shut them down at a cost. The people that becomne ill or die well to bad for them it seems.

Canadians don’t benefit from the free trade deal

Governments and big business have spent the last 15 years telling us that free trade is good for us. But Canadians know better or at least they should.

Despite promises that free trade deals would make Canadian companies more competitive, Canada has consistently lagged behind the United States in both productivity and competitiveness since the implementation of the Free Trade Agreement (FTA) in 1989 and the North American Free Trade Agreement (NAFTA) in 1995.

The new jobs created in the free trade era have been largely part-time and poorly paid. Social inequality in our country has grown as a direct result of workers’ inability to earn a decent wage to support their families.

NAFTA grants corporations of member countries the right to challenge any federal rule or law that they perceive as a barrier to their ability to make a profit. The result is millions of tax dollars being spent to either fight or settle with these corporations.

Let me give you an example: A United States corporation used NAFTA’s National Treatment and Foreign Investment provisions to force the Canadian government to reverse a ban on the gasoline additive MMT, a known carcinogen.

MMT is banned in Europe and California. In 1997, the Canadian parliament passed its own ban of MMT (which is made in the U. S. and sold in Canada) because it was proven to pollute ground water and was, in the words of then Prime Minister Jean Chrétien, an “insidious neurotoxin.”

Virginia’s Ethyl Corporation, the producer of Canada’s MMT, first tried to stop the legislation in the Canadian Parliament. When it was unsuccessful, it turned to the NAFTA, where it launched a $250-million suit.

Ethyl argued that it should be reimbursed for future profits it would have earned from the sale of MMT and that the mere discussion of the ban in the Canadian Parliament damaged Ethyl’s “good name” and therefore its profitability.

“Ethyl demanded” compensation or the elimination of the law. Because the Canadian Government believed (with good reasons) it would lose the case at a NAFTA tribunal, it reversed the ban, paid Ethyl “$13 million”, and wrote the company a formal letter of apology.


Lower wages, more pollution, deformed babies. This is progress?

Paying the price for free trade

A rough concrete-block wall now encloses the old battery-recycling plant, but that hasn’t stopped the frosty patina of poisonous lead salts that stretches past it and down a mud path. “Careful,” our guide says to House Democratic Leader Richard Gephardt (Mo.). “The acid from the old batteries is carrying the lead through the wall and down the hill.” Below us at the bottom of the mesa, a residential colonia nestles next to a small tributary of the Tijuana River.

That wall is about the only evidence I can find in Tijuana of the border cleanup Congress promised when it adopted the North American Free Trade Agreement (NAFTA) in 1993. While the number of assembly plants known as maquiladoras has almost doubled, neither clean water nor sewers or hazardous-waste cleanup has followed. With all the new factories, border pollution has, in fact, increased.

That pollution is coming, for the most part, not from antiquated enterprises like the battery-recycling plant (the likes of which can be found in poor countries all over the world), but from the real emblem of NAFTA sprawling a few hundred yards across the mesa: Ciudad Industrial, row after row of technologically sophisticated, highly automated Japanese and Korean electronics factories that could have been airlifted from industrial zones in Osaka, Seoul, or Tennessee. Ten percent of North America’s television sets are now produced in Tijuana, in plants blazoned with blue and red banners boasting “ISO 9002,” meaning that they meet the stringent quality-control standards of the International Organization for Standardization. The ISO also gives awards for compliance with international environmental standards, but those banners are strikingly absent.

This is the promise of free trade and NAFTA: First World factories in which Mexican workers use advanced technology to produce television sets, refrigerators, and VCRs as proficiently as Japanese, Korean, or U.S. workers. Here is a powerful engine of economic production, pouring forth the wealth that should lift Mexico economically and environmentally into the First World. Ciudad Industrial on its mesa is the shining city on the hill promised by backers of NAFTA.

Up close, however, that luster is only the poisonous sheen of pollution. Halfway down the dirt road that leads to the colonia is a square opening in the hill, the sewer outfall through which, largely at night, the sparkling factories of Ciudad Industrial discharge their hazardous wastes. Gingerly, our party–which also includes Democratic Whip David Bonior (Mich.) and assorted academic experts. journalists. and Mexican trade unionists–picks its way toward the river, a glistening chemical soup. A few dogs lap at its edge; their hair is falling out in mangy patterns, and they walk splay-footed.

One of the professors familiar with this colonia explains that although drinking water is trucked in, residents wash their clothes in the river and use its water for bathing. Children here suffer a high incidence of serious birth defects, including undeveloped brain stems.

Later, in talks with local community leaders, it becomes clear that the Mexican government has erected a set of stunningly perverse institutional barriers to economic and environmental progress. Faced with a labor force swollen by decades of population growth, the creation of jobs–any jobs–has become the overriding priority. Workers in the Tijuana maquiladoras are paid about 50 cents an hour, less than before NAFTA passed. The low wages are favored by the government and enforced by the local employer councils, despite food costs nearly equal to those across the border in San Diego. Workers cannot afford bottled water, and Mexican law prohibits the local government from taxing these state-of-the-art factories to pay for sewers.

Of course, the highly profitable factories could easily bear the tax burden needed to properly dispose of their wastes. But in its eagerness to attract jobs of any kind, the Mexican government guarantees factories only impuestos symbolicos, or symbolic taxes. Cleanup loans promised by NAFTA through the North American Development Bank sit untapped because, without decently paid workers or reasonably taxed factories, they could never be repaid.

Proponents of NAFTA argue that these arrangements preceded free trade and are solely the fault of the Mexican political system. But NAFTA sanctions and legitimizes these rules by guaranteeing Mexican goods access to U.S. markets, and encourages the spread of such practices throughout the rest of Mexico. Economic growth under such circumstances–however vibrant, however sustained–can never translate into economic and environmental health.

The health in question is not only that of Mexican workers. Those lead salts running downhill from the old battery factory, and the solvents released at night by the electronics factories, do not all end up in the stomachs of mangy dogs. Most flow downstream until they wash over surfers and wading children at Imperial Beach, California.

The Clinton administration is now asking for fast-track authority to negotiate similar trade agreements with other nations, starting with Chile. Republicans in Congress oppose tying future agreements to guarantees of labor freedom and environmental protection, even to toothless declarations such as those with Mexico. For its part, the administration is reluctant to admit that NAFTA’S environmental and labor provisions have failed, as the Sierra Club and others predicted.

We will hear much in the coming months about how the engine of free trade will propel the world toward better living and a cleaner environment. But let’s wait until it propels Mexico there first before proceeding further.

1997 Sierra Magazine

Carl Pope is the executive director of the Sierra Club.

Published on October 7, 2008 at 10:43 pm  Leave a Comment  

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