Is Free Trade good for workers?

No unions, no taxes and cheap infrastructure” are the brash promises of the government of El Salvador in a flyer distributed to company executives.

The business managers are potential investors in Salvador’s export processing zones (EPZ). EPZs, like those in El Salvador, have many factories employing large numbers of workers, mostly women, to assemble electronics or sew garments using imported materials. Their products are then exported duty free to the large consumer markets of North America and Europe. By keeping unions out, the young women are forced to work 10 to 12 hour days on assembly lines for as little as 50 cents an hour They are also kept in the dark about local labour laws and what their rights are. When they try to organize, they often lose their jobs.

If the costs are too high in El Salvador, investors can move to Guatemala, Colombia or Brazil where governments offer even cheaper labour and poorer working conditions. Through free trade and investment agreements the cards are stacked in favour of investors looking for the lowest production costs. Powerful companies blackmail the cash strapped governments in developing countries, desperate for investment dollars, into competing with each other by lowering standards and wages.

Free Trade has already hurt Canadian Workers

Canada is big on free trade. The Canadian government is a strong supporter of the World Trade Organization (WTO). It is also a member of APEC and was a strong promoter of the MAI. Since 1988, Canadian governments have signed four ’free” trade agreements in the Americas:

  • the Canada-US Free Trade Agreement (FTA);
  • the North American Free Trade Agreement with the US and Mexico (NAFTA);
  • a bilateral deal with Chile;
  • a framework agreement with MERCOSUR (a regional trade bloc including 4 countries in South America).Our unions have opposed these agreements, not because they oppose trade as such, but because these agreements hurt workers.

What have ten years of free trade meant for Canadian workers?

Loss of ’good jobs”

  • Many high paying manufacturing jobs were lost for good after the 1989 Canada-U.S. free trade agreement.
  • Most of the new jobs are in services, temporary or part time and are not unionized jobs, with 45 percent of the workforce now engaged in “flexible” work .

Lower wages

  • NAFTA has depressed wages. By mid 1999, 52 percent of Canadians were paid less than $15 an hour. Canadian and US workers are regularly threatened with relocation to Mexico unless the union is willing to accept a lower wage and benefit package.

More stress

  • As our economy becomes more deeply integrated (85 percent of Canadian exports now go south of the border), companies tell us we have to be leaner and meaner in order to increase productivity and be competitive. That means work faster and produce more – with fewer workers.

Cuts to social programs

  • Business leaders lobby the government to cut spending on health care and programs that keep workers afloat during times of unemployment. They claim this will make Canada more competitive and attractive to foreign investors.

Loss of democracy

  • Free trade has limited our access to decision-makers. At the same time, free trade has increased the rights of corporations, giving them a bigger say.

Workers everywhere pay the price for ’free trade”

Earning a minimum wage of about US$3.00 a day, our Mexican brothers and sisters are no better off than we are. The official Mexican ’unions” are tied to the government and work closely with the companies. They make sure Mexican workers can’t demand better wages and working conditions. When Mexican workers do try to organize their own independent union, they are confronted with a meaningless collective contract that was sold to the employer even before setting up shop. Mexican workers call these contracts “protection contracts” because they protect the employer from the demands of their workers.