[Congressional Record Volume 141, Number 148 (Thursday, September 21, 1995)]
[Senate]
[Pages S14099-S14100]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 NAFTA

 Mr. LEVIN. Mr. President, during the Senate debate over the 
North American Free-Trade Agreement I put together a brochure entitled 
``NAFTA MATH: It Doesn't Add Up.'' This brochure questioned the job 
creation claims of NAFTA proponents and showed those job claims to be a 
distortion of what would really happen under NAFTA.
  In the brochure and during the NAFTA debate I pointed out that the 
job gain claims were based solely on expected increases in exports. 
These job creation claims totally ignored any potential and expected 
increase in imports from Mexico--which result in the loss of American 
jobs.
  An op-ed published in Monday's New York Times confirms the worst of 
my fears. I will ask to have printed in the Record a September 11 New 
York Times op-ed by Bob Herbert which confirms the fact that NAFTA has 
not resulted in the increase in U.S. jobs promised by its supporters. 
In fact, it has resulted in the opposite.
  Mr. Herbert writes about the findings of a Public Citizen study of 
U.S. jobs created under NAFTA. Public Citizen looked at the job 
creation promises of dozens of companies that supported NAFTA. Mr. 
Herbert writes, ``Public Citizen noted that every one of those 
companies has already `laid off workers because of NAFTA.' '' In 
addition, ``Of the companies surveyed, 89 percent had failed to take 
any significant step toward fulfilling their promises of job creation 
or export expansion.''
  In addition, ``There has been no meaningful job creation from NAFTA, 
which has been in effect for 20 months. But the U.S. Department of 
Labor, through its NAFTA Trade Adjustment Assistance Program, which was 
designed to help people thrown out of their jobs by NAFTA, has 
certified that 38,148 workers lost their jobs by mid-August. An 
additional 30,000 workers have filed for assistance under the program. 
It is expected that the true job loss under NAFTA will reach 1 million 
by the end of the year.''
  Finally, Mr. Herbert writes that although exports from the United 
States have increased to Mexico as NAFTA proponents predicted, as I 
feared, imports to the United States from Mexico increased even faster, 
especially for high value-added manufactures such as automobiles and 
other high-technology items.
  Unfortunately, some of our fears about the implications of NAFTA were 
well founded. NAFTA's problems were evident even before the devaluation 
of the peso which hurt hopes for a growing consumer market in Mexico. 
With Mexico's current fiscal problems, these trends could well get 
worse.
  I ask that the op-ed by Bob Herbert be printed in the Record.
  The material follows:

               [From the New York Times, Sept. 11, 1995]

                         NAFTA's Bubble Bursts

                            (By Bob Herbert)

       Back in 1993, in a typical declaration of faith in the 
     projected glories of the North American Free Trade Agreement, 
     a vice president of the Mattel Corporation named Fermin Cuza 
     assured a Congressional subcommittee that Nafta would result 
     in the creation of new jobs at Mattel and have ``a very 
     positive effect'' on the 2,000 men and women already employed 
     by Mattel in the United States.
       Mr. Cuza's was just one of many promises made during that 
     season of devotion to free trade. The consumer group Public 
     Citizen took a look back at them.
       Let's start with Mattel. Not only have no jobs been 
     created, but a check of Federal records by Public Citizen 
     found that 520 workers at Mattel's Fisher-Price facility in 
     Medina, N.Y., have been certified as laid off specifically 
     because of ``increased company imports from Mexico'' that 
     resulted from Nafta.
       Public Citizen's Global Trade Watch unit surveyed the job 
     creation promises of dozens of staunchly pro-Nafta 
     corporations. They included, in addition to Mattel, Allied 
     Signal, General Electric, Procter & Gamble, Scott Paper and 
     Zenith.
       In a report released last week, Public Citizen noted that 
     every one of those companies has already ``laid off workers 
     because of Nafta.''
       Of the companies surveyed, 89 percent had failed to take 
     any significant step toward fulfilling their promises of job 
     creation or export expansion.
       In November 1993, President Clinton asserted, ``If this 
     trade agreement passes--Nafta--we estimate America will add 
     another 200,000 jobs by 1995 alone.''
       He was mistaken. There has been no meaningful job creation 
     from Nafta, which has been in effect for 20 months. But the 
     U.S. Department of Labor, through its Nafta Trade Adjustment 
     Assistance program, which was designed to help people thrown 
     out of their jobs by Nafta, has certified that 38,148 workers 
     lost their jobs by mid-August. An additional 30,000 workers 
     have filed for assistance under the program, which is not 
     well known and not available to most workers who are at risk. 
     It is expected that the true job loss under Nafta will reach 
     one million by the end of the year.
       It is fashionable now for Nafta supporters to blame the 
     end-of-the-year peso crash for problems that were inherent in 
     the trade agreement. During the first year of Nafta, before 
     the big devaluation in December, the value of the peso 
     relative to the dollar had already declined by nearly 15 
     percent. That wiped out any advantage the U.S. would have 
     realized from Nafta's lower tariffs. The average tariff 
     decline was just 10 percent. In other words, the ``market 
     access advantage'' that the U.S. was supposed to enjoy had 
     vanished before the peso crash.
       Proponents of Nafta are quick to note that U.S. exports to 
     Mexico increased during the first year of Nafta. True. But 
     what they fail to mention is that imports to the U.S. from 
     Mexico increased even faster, with automobiles and other 
     high-technology items increasing twice as fast. We were well 
     on our way to a trade deficit with Mexico (and the big job 
     losses that would entail) before the crash of the peso.
       Worse, much of the increase in exports to Mexico came from 
     items that boomerang 

[[Page S 14100]]
     back to the U.S. in the form of imports--for example, component parts 
     shipped to Mexico for assembly into finished goods and 
     infrastructure equipment for use in the building of 
     factories.
       And then there's the small matter of the wages of American 
     workers. In Nafta's first year, before the collapse of the 
     peso, America's 77 million production workers endured a 3 
     percent drop in their real hourly wages--the steepest one-
     year decline ever recorded.
       That, of course, was directly related to the overall 
     expansion of the labor pool under Nafta, and the fact that 
     the number of companies choosing to relocate to Mexico has, 
     as expected, accelerated. The chilling effect of these 
     developments on wage demands should be obvious.
       The peso devaluation has dried up the consumer market in 
     Mexico. That simply means that as bad a deal as Nafta was 
     originally, Mexicans are now even less able to buy American 
     goods.
       But it was Nafta that put us on this highway to nowhere in 
     the first place. The collapse of the peso just increased the 
     speed.

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