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The Selling of Free Trade : Nafta, Washington, and the Subversion of American Democracy

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After reading through the negative reviews below, I can't help but notice that they miss the point. This book is not an anti-globalization rant or a leftie-luddite treatise. What MacArthur has done is document the inner workings of an important "trade agreement," demonstrating that the triumph of the market is not an inevitable historical trend. Rather, the grand sweep of "globalization" is a project, a designed task, pushed through with real and purposive power. The job of pundits, CEOs, PR firms and politicians is to make the rank and file feel like the collapse of non-economic imperatives is the natural unfolding of history.

MacArthur's book documents the kinds of things that citizens should be aware of as they happen, not ten years later in a searing expose. We need to shine a searchlight on our government right now, to uncover the backroom deals and smarmy PR snow-jobs that presently constitute the real substance of American politics. MacArthur's book shows us what to look for.

John MacArthur, editor of Harper's Magazine, is a persistent, resourceful, and thorough reporter with an unapologetic opinion about the North American Free Trade Agreement (NAFTA). MacArthur makes no attempt to disguise his disdain for the trade pact, which he describes as a measure designed to institutionalize U.S. exploitation of Mexican workers, or for the politicians, businessmen and lobbyists who supported it. In researching this book, MacArthur interviewed many of the key national and international players who helped create NAFTA and found rare interviews with others. He illustrates the debate by presenting an analysis of NAFTA's impact on workers at a U.S factory, and on the Mexicans who replace them. Ironically, he paints such an effective portrait of the inner workings of the Mexican maquiladoras factories that U.S. business leaders reading this book might be further enticed to relocate. The finest feature of the book is its exhaustive treatment of the law-making process, and its lucid judgment of the Washington establishment. We [...] recommend this book to students of politics or international trade, business leaders interested in gaining insight into the anti-globalization movement, and to anyone trying to get a bill passed in the U.S. Congress.

MacArthur begins his book from the venerable Swingline Staple Company of Queens, NY, with profiles of employees, union activists, owners over the last 30 years. Not so long a period, but starting at a time when a lattice of low technology manufacturing still ringed the great metropolis and bustled in the lower regions of Manhattan. They provided a modest but sustaining salary and a route to the ladders of American society for generations of immigrants. By the end of that period those societal understandings had given way to a much different order. Swingline moved its operations to the dollar an hour wages and shanty towns of Nogales, Mexico, channeling back product to an American market they were no longer willing to support with their payroll.

The author exposes the shell (or shill) game that took over the debate of North American Free Trade. Politicians as diverse as Ronald Reagan and Bill Clinton cynically assured the electorate that open trade heralded an era of unequaled prosperity and opportunity, propelled by such vacant aphorisms as the 'information economy' or the 'new realities' of global business. The agenda was marketed as 'inevitable'. The neoliberal lobby managed to bamboozle a skeptical public and buy the political establishment. By 1994 this well financed machine had bribed or bullied its way to passage of NAFTA in all three countries. A full-scale reorganization of continental industry ensued, with an attendant labour disenfranchisement, deindustrialization and currency sabotage.

The corrupt Salinas regime exemplified the motives of the Free Traders. Mexico's acceptance of their wealthy northern neighbors' largesse of 'investment' was extorted in part by their inability to pay the usurious loans of the IMF and foreign banks. NAFTA has since led to a collapsing peso and living standards that have dropped by a third. That has legions besieging the U.S. border. Free Trade, though, means anything but free movement of labour for impoverished Mexicans. Its profit equation hinges on a desperate, captive work force.

In some ways MacArthur's focus on the most ostentatious of Free Trade icons is the book's weakness. Mexico has, after all, no more than 4% of the American GDP. The workers of the maquiladoras are poorly educated and low skilled. It was only the most vulnerable, politically expendable Canadian and American workers who would be sacrificed to NAFTA. Discarding this lynchpin, however, has profound implications to the soundness of any nation's overall socio- economic structure.

The more insidious aspects of the Free Trade movement comes from agreements mentioned only in passing in this book. The Tokyo and Uruguay rounds of GATT, the WTO, a myriad of bilateral agreements, operating below public awareness, are devastating the high tech, high paying upper rung of industry-- steel, agriculture, chemicals, automotive, ship building, textiles, electronics, robotics. These processes sustain a sophisticated scientific infrastructure, critical to any economy that hopes to maintain its industrial integrity. They come easily under attack from countries who provide focused government direction, structural protection, subsidy, targeting the laissez-faire underbelly North American commerce.

The result is clear. Free Trade brings fragmenting inequity, stagnation of incomes, a steady devolution of government services under the drumbeat of 'privatization' and 'deregulation', fragile bubble economies, erosion of industrial capacity. Multitudes are tossed into the dustbin of the new economy, joining the ranks of the working poor or no longer deemed countable even as unemployment statistics. The media blithely proclaims all a success, the human detritus neatly excluded from recognition. This is the real legacy of politicians of all stripes who have sold out their countries to this juggernaut. The dissolution of the sovereign nation state promises a cult of government inertia, leaving the field to the most debased and predatory of commercial interests.

This book had no recommendations, no dust jacket, and no introduction to the qualifications of the author. The only reason I picked it up out of the library was because I am currenty a student of International Business and Global Economics.Our group assigment is to pursue a debate upon free trade in general, for the opposition.

For it's treatment of trade theory, especially Smith and Ricardo,I thought MacArthur picked up a salient point...why in the modern world of technology and global trade are thinking individuals (for example...academics?) silently allowing a group of self-interested multi-national corporations to devour and destroy what took western societies, not just capitalists, hundreds of years to attain?

Namely, a worker-protected environment, minimum wage laws, and government regulations to prevent exploitation of labour? Vanishing due to greed. The same old greed that could be scientifically theorized upon more than two hundred years

ago, during the ages of mercantilism and comparative advantage.

Why no new theories on how to maintain worker rights?

MacArthur identifies the players in American politics, the benefits assumed and trade among all dealers in the free trade debate, and spends as much time as is necessary to capture the attention of the reader. Canada and Mexico are mere pawns here in a game the Americans play much better than many nations.

Thus clear causes and effects of the support of free trade in these other nations should be reviewed in numerous other texts.

The points he picks up the best include the clauses in chapter eleven preventing privatisation of Mexican-held American assets, the collusion of the mass media, the deification of Salinas, etc.

The question he raises with the greatest irony, "How could such a trade policy be permitted without minimum standards of environmental and labour regulations in the developing

country, as was required in the EU of Portugal and Greece?"

Finally, the idea should be about creating wider consumer markets of products, which due to this trade deal, almost certainly will never happen in Mexico. The experts still

remain silent about the after-effects, research classified

into documents that claim the success of the project will

take fifteen to twenty years to adequately assess...waiting

for those accountable to pass away? Not a great sucking sound, but a slow, persistent dripping sound.

Now I know why one of my co-workers in the desert was from Georgetown University. Idealism dies pretty fast in

MacArthur's lens upon Free Trade. An enlightening read.

The author of this book clearly shows that NAFTA is not about "free trade," but is in fact an investment agreement designed to protect American multi-national corporations that relocate to Mexico for "cheap labor". Mexico has a GNP about 4% of the U.S. GNP; the only people in Mexico who are able to buy American goods are either in the durg trade or the Mexican government elite. The author tells a story of discarded American workers (Swingline Staplers, Long Island City) who loose their plant and jobs to their Mexican brothers and sisters in the great "cheap labor" camps of the Maquiladora Program.

But this is also the terrible story of how Bill Clinton and Co. finished off the party of FDR, and made it the party of "cheap labor" sold to corporate interests for campaign contributions. As I read the book I kept thinking that maybe it's time for the American labor movement to run a candidate for President (Bonier?) and demand a North American Free Labor Agreement that will protect American workers, Mexican workers-and all workers everywhere. And I think such a movement would likely attract many on the American right, who are very anti-authoritarian, and deeply distrustful of what Mussolini called "corporatism"-which is what Mussolini said fascism was all about.

Great, thought provoking book. Brovo.

The book is an extended essay and as such has to be read cover to cover. I found the book readable because the author cites concrete examples to buttress general arguments (i.e. the Swingline operation), and also because the author writes well (no mean feat these days).

I concur with his point of view. I feel compelled to point out a couple of things to his detractors. First of all, MacArthur never confuses 'America' with the American political and financial establishment. It is clear that the establishment, which spearheads the 'globalisation' movement is doing fine out of things like NAFTA. The average American, however, is getting the short end of the stick. Manufacturing continues to decline in the USA and one has only to glance at the trade figures to see this. This has consequences I don't want to belabor here. I do want to say that the new service sector jobs are not only less skilled in general but less well-paid and even more vulnerable to changes in the economic climate than manufacturing. The second point is: what does it mean to say that the USA is an economic superpower? Many of the world's largest companies have their head offices here, true. That's about it. The outlook of these companies is global and they have no particular sentimental attachment to any one area. The USA is just one more colony to be commercially exploited.Perhaps the idea of the nation state will go the way of the cheshire cat, with only the smile left behind.

The Selling of Free Trade is particularly topical given Vice President Gore's recent class warfare rhetoric on the campaign trail, in which he pledges to fight shoulder to shoulder with the proletariate against the evil forces of big business. Anyone foolish enough to believe this pabulum should be assigned this book. John Macarthur makes a convincing case that NAFTA was not enacted through a democratic process of debate and compromise, but through a cynical campaign of misinformation and vote-purchasing.

It is no accident that the two negative reviews of the book are from Canadians, and read more like editorials than book reviews. Contrary to one of these reviews, NAFTA fit neatly into Canada's longstanding policy of beggering its neighbor for manufacturing jobs using a variety of means, including the auto pact of the 1960s which forced the big three to construct Canadian assembly plants, and export cars to the United States. As the United States hemoraged around 400,000 manufacturing jobs over the past two years, Canada gained 400,000 -- an incredible number for a country Canada's size -- as its huge trade surplus with the United States ballooned. These jobs are coutesey of specific, little known NAFTA provisions, like exceptions to the NAFTA rules of origin that permit Canadian tailored clothing manufacturers to pay far lower tariffs on imported cloth than their American competitors. Most tailored clothing production has shifted to Canada. They have also resulted from Canada's policy of maintaining a weak currency, not to mention subsidized health care, and much higher external tariffs. Though Macarthur focuses on Mexico, it is by no means the only beneficiary of NAFTA.

Macarthur demonstrates that the Clinton administration had to have known that NAFTA would cost hundreds of thousands of manufacturing jobs, and decimate traditional Democratic constituencies. But Clinton then, and Al Gore today, depends on the financial support of big business, no less than any Republican, and businesses owe allegience only to shareholders. These linkages are painstakingly disected.

If the NAFTA debate had been conducted honestly, on the merits of lower consumer prices, greater efficiency, and higher corporate profits, it is by no means clear that it would have passed. Nineteen of twenty television factories might not have been moved to Mexico, along with most all small appliance production. General Electric might not now be threatening to cut off suppliers who refuse to move their factories to Mexico, where GE is moving all appliance production. Levi's jean production might not have moved to Mexico. Anyone who denies the giant sucking sound depressing the wages of lower-skilled Americans need only look around. This book is an ominous portent of the Gore administration.

NAFTA became a blue-print for exporting jobs all over the world. It allows corrupt governments everywhere to exploit the poor for the benefit of the world trade organization (WTO) and the wealthy of these countries.

This book is an example of excellent reporting. MacArthur takes a small subject--the fate of the Swingline staple factory in New York and shows you how a company cut its labor costs by moving to a bordertown in Mexico. This factory once was the first job off the boat for thousands of immigrants. Now, it is the modern equivalence of the workhouse in places like Mexico. There a corrupt government threw its peasants off their land offering them a brutal choice: be exploited by corporations in Mexico or take a chance at a new life in America.

What shocked me was how in such a world as we are creating, friends come in strange packages while your enemies come at you with warm hands and friendly smiles. Bill Clinton, to the delight of conservatives, pushed NAFTA through Congress. The opposition: a lonely, odd, short guy from, of all places, Texas, by the name of Ross Perot. "Can you hear that sucking sound," was his cry throughout his tour of America against NAFTA. We did not listen. Instead, we bought Bill Clinton and Gore, who was the front man for this PR campaign, based on their supposed liberal values. We got took.

Read this book and find out how. I took off a few points because the flow dragged a little but otherwise, a great book --- MacArthur made the Conservative hit list.

Please rate this review. Thanks.

We are used to reading the promises about new legislation in bright headlines. What we are less used to is getting the story of how it all turned out. The Selling of "Free Trade" is at its best when it focuses on describing the impact on manufacturing jobs since NAFTA was enacted. The detailing of how the law was passed is also included, and is a typical story of special interests effectively using their resources.

The question of how to evaluate NAFTA economically is a complicated one, and the book's main weakness is that the author has done too simple a job of analysis. However, he should be commended for starting to compile the data.

Essentially, NAFTA has generated lots of jobs in Mexico along the border that pay a little better and provide a little better working conditions than exist in the rural interior of Mexico. There has been no boom in high-paying manufacturing jobs in the United States, and many manufacturing jobs have been lost. The book does a good job of detailing these factors. Ross Perot's promise of a "giant sucking sound" from jobs leaving the United States was closer to the reality we have experienced so far that what anyone else told us.

On the other hand and unmentioned in the book, NAFTA has created an enormous strategic advantage for the U.S. economy by making low-cost, custom manufacturing possible in the United States. Companies like Dell Computer would not be able to use the manufacturing methods they do except for the presence of low-cost component factories along the Mexican border. It is this system of one-of production at low costs that has put such a severe crimp into Japanese and Chinese manufacturing exports in advanced industries. As a result, a lot of manufacturing jobs for the U.S. were probably created or saved that would otherwise have been lost.

The wealth effect of the increased values of American companies from the increased profits is mentioned, but also is not analyzed. The wealth effect also creates and sustains jobs, usually outside of manufacturing.

I suspect that if the analysis were undertaken it would show that NAFTA has been good for developing jobs in the United States in total, even though the head-to-head comparisons on manufacturing jobs belie that conclusion. However, no one can know until the analysis is done.

On the political side, I don't know how I feel about the log-rolling to pass NAFTA until I know whether the legislation was good for the country or not. I know it wasn't too helpful for those who lost their jobs and could not find new ones. But in a time of decreasing unemployment that effect should have been lessened. What happened to those who lost their jobs is also unchronicled by this book, except for a few anecdotes. That would make a great story in and of itself. On the other hand, the additions to the country seem to be enormous in terms of market share gains, profit increases, and a higher value for securities. Also, consumers have probably enjoyed lower prices.

If you like the human interest angle behind a major change like this, you will like Mr. MacArthur's approach. He did a good job of grasping the detail with his story of the Swingline move to Mexico and the political processes involved.

One thing I learned from this book was that true bipartisan support means that there is an enormous amount at stake for some special interest. To do that there has to be enough campaign money delivered to buy support from both major parties. I used to think that such issues were above partisanship. Foolish me!

After you have read and learned from this interesting book, take another issue where the politicians agree and ask yourself what the long-term consequences are for your country. We should all consider those questions first and more carefully than the ones where they disagree. Don't let complacency turn your country into a victim!

While the author's stance and my own on NAFTA are the same, I disagree with the method taken to drive home his point. The majority of the book focuses almost exclusively on the plight of the struggling staples plant. NAFTA is a much bigger issue then one company and if your hoping to get a better understanding of why that is the case this book will leave you dissapointed.