“Harmonizing” Our Decline
By William Norman Grigg The New American, September 22, 2003
Our standard of living is being deliberately undermined to merge our nation into a centrally directed global economy.
As part of his September 2001 visit to the U.S., Mexican president Vicente Fox accompanied President Bush to Toledo, Ohio, where they addressed a carefully selected crowd of 8,000 people. Toledo was chosen because of its large and growing Mexican immigrant population. This changing demographic in America’s heartland was presented as symbolic of the growing interdependence created by the North American Free Trade Agreement (NAFTA). The New York Times described how both Presidents Fox and Bush “praised the contributions of Mexican immigrants and pledged to improve their lives.”
President Bush’s remarks went well beyond the predictable rhetorical flourishes designed to captivate specific ethnic constituencies. “We want Mexico to grow a middle class so that the citizens of Mexico can find work and feed their families, just like the citizens of America can find work and feed their families,” declared Mr. Bush. The president wisely chose not to test that applause line at a rally held earlier that day — a gathering of Toledo-area workers protesting NAFTA’s impact on the local economy.
“We’ve had enough of it,” complained Toledo city councilman Pete Gerken of the NAFTA pact. According to Gerken, NAFTA had resulted in plant closings in the U.S. as production was shifted to Mexico. USA Today pointed out that “workers at Toledo’s Jeep assembly plant were angered this spring when DaimlerChrysler announced it would increase production of the hot-selling PT Cruiser at a plant in Mexico instead of in Toledo.” “Why are they taking it from us and giving it to a new country?” protested Rosa Ealy, who had worked for Jeep prior to its NAFTA-inspired decision to send the work south of the border.
Although unfamiliar with the term, the angry workers in Toledo were the victims of what NAFTA supporters call “harmonization.” The process is an updated version of Karl Marx’s classic Communist formula: From each according to his ability, to each according to his need. In this instance, the United States imports Mexico’s surplus poverty, while Mexico — because of its lower wage costs — imports America’s industrial jobs. While this may result in a modest increase in the average Mexican standard of living — from near-serfdom to a higher grade of peonage — it will, if left unchecked, terminate America’s middle class. Pauperizing the U.S. U.S.-Mexico harmonization received a boost during the 2001 Bush-Fox summit as the two presidents laid the groundwork for the so-called “Partnership for Prosperity” (PfP) — an initiative designed to use American tax dollars to build Mexico’s manufacturing sector. Like most international socialist undertakings of this sort, the PfP was formally inaugurated at a UN global conference — specifically, the March 2002 UN foreign aid conference in Monterrey, Mexico. According to the U.S. State Department, PfP’s action plan calls for U.S. assistance in Mexico to boost investment in housing and commercial infrastructure to boost Mexican productivity.
A key outgrowth of the PfP was a bilateral agreement signed last June to permit the Overseas Private Investment Corporation (OPIC) “to offer all its programs and services in Mexico....” OPIC was established by Congress to help U.S. companies invest overseas by granting direct loans or loan guarantees for investments and extending insurance to cover the risks of investment.
In the June issue of OPIC News, CEO Peter S. Watson boasted that the bilateral agreement with Mexico “will help to further unleash the entrepreneurial capacity of Mexican businesses by mobilizing U.S. capital, and consequently bring important developmental benefits to the Mexican people.... [It] will also allow OPIC to work freely along with its sister agencies, the US Trade and Development Agency and the Export Import Bank of the US, in providing investment support in Mexico....”
In brief, OPIC and its sister agencies will use taxpayer money, and the full faith and credit of the U.S. government, to promote the relocation of even more manufacturing jobs from the U.S. to Mexico. But Mexico is hardly the only beneficiary of the federal government’s treacherous generosity.
The July 2002 OPIC News reported: “OPIC intends to support a $100 million private equity fund to stimulate investment in Russia and surrounding regions.” According to Watson, that fund will “contribute importantly to President Bush’s vision for accelerated economic growth in Russia and its neighboring states.”
Watson’s predecessor at OPIC, George Munoz, pointed out in his January 2001 “Farewell Address” that the “forces of globalization … have put OPIC front and center of our government’s economic foreign policy.... Whether it was Russia, Africa, Central America, or Vietnam, OPIC played a crucial role in the development of U.S. foreign policy.”
That policy could be reasonably described as deliberately pauperizing our country by wiping out its manufacturing base. And OPIC’s sister organizations, particularly the Export-Import Bank, are doing their part as well. Scarcely a week goes by without the Ex-Im Bank holding an “export symposium” in a major U.S. city — an event intended to evangelize on behalf of taxpayer-subsidized outsourcing of manufacturing to foreign countries. Trading Away Jobs NAFTA was ratified 10 years ago amid promises of increased prosperity for our country and its “partners,” Canada and Mexico. The agreement was depicted as the herald of the new globalized economy, in which American exporters would gain lucrative access to previously restricted markets. But the pact actually resulted in an exodus of manufacturing jobs sent south of the border, where labor costs and the regulatory burden are much lower. And rather than promoting genuine free trade, NAFTA produced a mammoth international bureaucracy to manage and regulate trade — thereby usurping Congress’ exclusive constitutional authority to establish trade policy for our nation.
While many Americans may be unconcerned about constitutional questions, NAFTA’s economic toll is becoming apparent, particularly in the industrial Midwest and textile-dependent South. Since 2001, North and South Carolina have lost an estimated 180,000 manufacturing jobs. Roughly half of the textile and apparel jobs that existed in 1994 have disappeared in less than 10 years.
In North Carolina, as elsewhere across the nation, there was bipartisan congressional support for NAFTA and presidential “fast track” trade negotiation authority. Notes the Durham Sun-Herald, “Republican U.S. Rep. Cass Ballenger voted for NAFTA and fast-track, and has seen his 10th District lose nearly 40,000 jobs, primarily in the textile and furniture business.... Democratic U.S. Sen. [and presidential aspirant] John Edwards voted against fast-track in 2002 after voting for an earlier version. In 2000 he voted for permanent normal trade relations [PNTR] with China.” Beijing’s PNTR status keeps open the spigots of taxpayer subsidies to U.S.-based multinationals seeking to relocate to Communist China, thereby accelerating the flight of manufacturing and hi-tech jobs.
Congressman Robin Hayes, another North Carolina Representative, is heir to the Cannon family textile fortune. Nonetheless, he avidly supports the misnamed free-trade agenda: In December 2001, Rep. Hayes cast the tie-breaking vote to give President Bush “fast track” authority (re-named “trade promotion authority”) to conclude negotiations on the so-called Free Trade Area of the Americas (FTAA), which would expand NAFTA into a Western Hemisphere equivalent of the European Union. During a visit to Kannapolis shortly after the Pillowtex bankruptcy (described in the previous article), Rep. Hayes heard from at least one displeased constituent. “Thanks for sending the jobs overseas, Robin!” shouted former Pillowtex employee Brenda Miller. Bloc by Bloc Mammoth trading blocs like the EU, NAFTA, and the proposed FTAA are intended as stepping stones toward regional political mergers. As economies become harmonized throughout the bloc, so ultimately will political systems. The EU began as a supposed European free-trade zone. But now it is being transformed into a continent-wide socialist superstate with a common currency, legal system, and foreign policy. Signs of a similar convergence with Mexico can be seen in the Bush administration’s perverse determination to use U.S. taxpayer subsidies to enhance Mexico’s economy.
The inescapable rule of regional blocs like NAFTA and the EU is: With economic merger comes political merger. Canadian parliamentarian John Turner explained that proposition in a floor speech condemning the NAFTA accord. “We have built a country, east and west and north, on an infrastructure that resisted the continental pressure of the United States,” Turner declared in a speech directed at then-Prime Minister Brian Mulroney, a key NAFTA architect. “For 120 years, we’ve done it, and with one stroke of the pen you’ve reversed that, thrown us into the north-south pull of the United States. And that will reduce us, I’m sure, to an economic colony of the United States, because when the economic levers go, the political independence is sure to follow.”
“Downward harmonization” — a radical and unnatural decline in both the cost of labor and the standard of living in prosperous nations — is another unavoidable consequence of economic merger. So while Canada was threatened with the prospect of becoming an “economic colony” of the more industrialized U.S., American industrial workers are being underbid by workers in Mexico — and, as globalization accelerates, workers in China, India, and the former Soviet Union.
“Fast track” or “trade promotion authority” is a key component of the scheme to enmesh our nation in a system of regional trade blocs. Granting the president “fast track” authority violates the separation of powers by granting a legislative role to the executive branch. In working out trade treaties with both individual foreign nations and large-scale, multi-national trade pacts, the president can use “fast track”/“trade promotion authority” to negotiate not only a particular trade agreement, but also the implementing legislation needed to bring existing U.S. law into conformity with the agreement.
George Bush the elder received “fast track” powers to conclude the NAFTA pact, which produced an unelected international body with the power to overturn U.S. trade, environmental, safety, and labor law. It is doubtful that this radical transfer of authority over our economic destiny would have passed congressional scrutiny had it not been presented as a fast track “take it or leave it” proposition. Similarly, Bill Clinton was given “fast track” authority to finalize negotiations for the creation of the World Trade Organization (WTO) — an unelected cabal of bureaucrats who claim the power to regulate global trade.
Representative Ron Paul (R-Texas), a believer in genuine free trade — that is, trade involving entrepreneurs unaided by subsidies and other protective measures — is an outspoken critic of the WTO. “We should never deliver to any international governing body the authority to dictate what our laws should be,” observes Rep. Paul. “And this is precisely the kind of power that has been given to the WTO.... The WTO is being described by its promoters as a vehicle for free trade. I believe in free trade but, as we can see, the WTO has nothing to do with free trade; it has to do with managed trade for the benefit of special interests among which are a few corporate interests.” Bipartisan Betrayal It’s doubtful that the Senate would have approved this dramatic transfer of national sovereignty had it been proposed in a formal treaty. Additionally, the Republican-led Congress that acquired power in January 1995 included scores of freshmen skeptical of international bodies like the WTO. The drive to entangle our nation in the WTO may have been doomed but for the willingness of Republican House leader Newt Gingrich to cooperate with like-minded Democratic internationalists in convening a special lame-duck session of Congress to approve the agreement.
To his credit, Gingrich candidly described the consequences of congressional approval of the WTO. “[W]e need to be honest about the fact that we are transferring from the United States, at a practical level, significant authority to a new organization. This is a transformational moment,” admitted Gingrich during congressional hearings in late 1994. “I would feel better if the people who favor this would just be honest about the scale of change.” Comparing the WTO agreement with the 1991 Maastricht treaty, which created the European Union, Gingrich predicted that “twenty years from now we will look back on this as a very important defining moment. This is not just another trade agreement. This is adopting something which twice, once in the 1940s and once in the 1950s, the U.S. Congress rejected. I am not even saying we should reject it; I, in fact, lean toward it. But I think we have to be very careful, because it is a very big transfer of power.”
The power ceded by Congress to the WTO placed our nation’s economic future in the hands of unelected globalist bureaucrats. A similar transfer of sovereignty is scheduled for 2005, with the completion of the so-called Free Trade Area of the Americas. The FTAA would create a EU-style trading bloc — and future political bloc — encompassing the 34 nations of the Western Hemisphere.
En route to finalizing the FTAA, the Bush administration is seeking approval for a series of smaller, bilateral free trade agreements (FTAs). In July, Congress ratified — without serious discussion — FTAs with Chile and Singapore. FTAs with Morocco and Australia are awaiting approval, as are regional FTAs with Central American countries and the South Africa Customs Union. Rather than promoting free trade, each of these agreements opens our vast consumer market to low-wage nations, while simultaneously beginning the process of subsidized export of a portion of our manufacturing base abroad. It’s a steady process of nibbling away at our manufacturing economy — a series of appetizers in preparation for the big bite to come when the FTAA is approved in 2005.
There’s no reason to believe that FTAA approval will be automatic, however. A growing backlash against the Bush administration’s trade policy is brewing in the Southeast and Midwest, as owners of manufacturing concerns join with manufacturing workers to protest the critical decline of our capacity.
The great danger is that these concerns will be misdirected into a crusade against “free trade” or “corporate profits,” rather than targeting the real enemy: The architects of the emerging, centrally directed global economy. Defeating the FTAA would be a critical setback for their plans, as well as a key victory in the struggle to preserve what remains of our nation’s critical manufacturing capacity.