How Americans swallowed the NAFTA myth

Andy Beckett, Guardian News Service, London

It can be a risky business these days for American journalists to suggest that the U.S. is less than exemplary in its internal politics, or in its everyday relations with other places. Since Sept. 11, several American newspaper columnists have been sacked for making remarks along these lines. Even in Britain, the blanket phrase "anti-American" has been much in use for smothering investigations of Washington's democratic credentials and global dominance. Quite often, listening to a speech or a phone-in about the current international situation, one can feel as though America's ambiguous recent history has simply been abolished.

John R MacArthur, fortunately, does not have to go along with this. As a member of one of America's wealthiest liberal families and the publisher of Harper's Magazine, the mainstream American journal most consistently critical of U.S. excesses during the 1990s, he is not going to get fired for the unpatriotic revelations in The Selling of 'Free Trade'.

His previous book was about the pro-military bias of the American media, supposedly the most free in the world, during the Gulf war. This volume is about an even more uncomfortable topic for fans of the American way: How close to a one-party state the U.S. can also veer in peacetime, and what the consequences of its overwhelmingly pro-business, America-first political consensus are for everybody else.

MacArthur takes as his example the seemingly dusty story of the North American Free Trade Agreement (NAFTA) signed between the U.S., Mexico and Canada in 1993. At face value, this treaty was a standard piece of modern deal-making to aid international commerce, of interest then and since to transatlantic think tanks and especially keen students of American politics.

Officially, the agreement established a single market between the three countries, similar to that in Europe, to the benefit of rich and poor alike across the north American continent. Jobs would be created in America. Mexico would get wealthier. Profits would rise everywhere. In the words of Lee Iacocca, the famous car salesman hired to advertise the benefits of NAFTA on American television, "It's a no-brainer."

In fact, as with globalization in general, there would be distinct winners and losers. The commercial union of a poor, loosely governed, populous country such as Mexico with two of the world's most prosperous nations would provide wide-ranging possibilities for closing factories in America and Canada and reopening them to the south, where cheap labour could be obtained and regulations of all kinds could be evaded. The best parts of this book focus on a single factory in New York, describing what happened when its owners, seeing the opportunity created by NAFTA, suddenly moved it across the Mexican border.

The Swingline brand of office staplers and staples had been made in a redbrick plant beside the Queens railway tracks since 1935. MacArthur does not completely romanticize the noisy, low- paid operation of the business -- he probes the old-fashioned bullying and ethnic stitch-ups that persisted through the decades -- but it was unionized, the swooping Swingline logo was "almost lovely", and many employees spent their whole working lives there.

Then, one spring morning in 1997, the owners of the factory informed their staff that there were "tentative plans" to "phase down" operations in Queens in favor of "a more cost-effective solution". Less than two years later, the plant was empty.

Its replacement stood concealed by a desert hillside outside the border town of Nogales in northern Mexico. When MacArthur sneaks in for a visit, his official requests having been declined, he quickly notices something about the new compound: "If NAFTA was going to cause Mexicans to buy American-made cars, where were the parking spaces?"

The deliberate imbalances embedded in the trade agreement are apparent in other ways, too. All the factory's raw materials come from the US. Everything produced is sent back across the border. The only benefit to Nogales, a place of shanty towns and potholes, is the employment provided, which is so badly paid that Swingline has been able to abandon the expensive machinery it ran in Queens and replace it with long lines of Mexicans putting staplers together by hand.

Since NAFTA came into force, MacArthur records, Mexico has endured a currency crisis and worsening government debt, among other economic and political disasters. U.S. unemployment has started to rise quite sharply.

The rest of the book, which is less vivid, explains how an international agreement with such predictably unpleasant side- effects was swallowed so easily by the politicians and voters of what is allegedly the world's greatest democracy. The swift and regular "manufacturing of consent" in the US for right-wing policies at home and abroad has already been the subject of dozens of books by the American dissident Noam Chomsky, and MacArthur has little to add to this body of thinking.

At times, his account of the passage of NAFTA bogs down almost completely in detail about the workings of Congress and the Senate, memos and counter-memos, and eye-glazing quotations from people who know more than is healthy about tariffs and free- trade areas. Yet there are also moments of rather chilling clarity, as Republicans, Democrats and business leaders unite behind a treaty that betrays the interests of many of their employees and supporters.

The White House gives permission for a "county fair" displaying the products of companies backing NAFTA to be held on its South Lawn. It is raining on the day, so umbrellas are distributed printed with the American flag and the slogan "American Products, American Jobs... NAFTA". Patriotism and soft universal rhetoric, as ever in the U.S., cloak a scheme whose aims are hard-nosed and divisive.

MacArthur, despite the melodrama of the book's subtitle, offers no grand political conclusion. He is content to let his facts do the accusing. The managers of American plants in Mexico, he notes, often prefer not to relocate across the border themselves, but commute from shaded bungalows in Arizona.

Like Victorian empire-builders, they refer to the bulk of Mexico beyond the free-trade zone as "the interior". MacArthur does not discover whether his countrymen have set up their commercial stockades there as well. No American car-rental firm trusts Mexico enough to lend him a four-wheel drive.