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Allies Across the Border | Excerpt
Encounters in the Global Economy
"This is what democracy looks like!" shouted the anti-WTO demonstrators: young and old, men and women, students, union members, and environmentalists gathered from all parts of the country and all parts of the world. Television viewers and newspaper readers all over the world saw the scenes from Seattle. Protesters dressed like turtles, giant puppets, thousands of union members, and black-clad anarchists all voiced their anger about the global economy. Some viewers felt, it's about time! Others must have wondered, what's it all about?
The World Trade Organization, officially in existence only since 1995, coordinates and enforces global trade policies. In its short existence it has earned a reputation for running roughshod over labor and environmental rights as well as national sovereignty. To many it appeared a tool through which transnational corporations were seeking to reorder the world in their image. The thousands of insistent world citizens gathered in Seattle on November 30, 1999, demanded that their voices and their concerns must be heard as well, or their would be no meeting of the WTO. When Seattle police, looking more like imperial storm troopers from a Star Wars movie responded with pepper gas, rubber bullets, and clubs, protesters locked arms, sat down, and chanted, "Whose streets? Our streets!" Longshoremen joined in by shutting down ports from Alaska to San Diego.
Over 30,000 labor unionists gathered in Seattle's Key stadium before taking to the streets on November 30th, 1999. Congressman David Bonior told the crowd, " Business domination through the WTO looks to the people like an effort to take away their power of decision making. People see it as a threat to democracy." David Foster of the United Steel Workers told them, "We are proving that the mobilization of the people can change history…. Our objective is to raise the standard of living of workers in every part of the world; we aren't just interested in protecting the US market."[i]
Workers listened to unionists from around the world. "What is good for a Ford worker in Detroit must also be good for a worker in South Africa," a representative from the South African Labor Network told the crowd. "And it must also be good for a Ford worker in Hermosillo, Mexico."[ii] Manuel Mondragon of Matamoros, Mexico told how the Mexican factories of transnational corporations closing plants in the U.S. and Canada routinely denied workers the right to form meaningful labor unions, dumped toxins into waterways, and exposed workers to chemicals that disabled workers, and caused birth defects in their children.
Jeff Crossly of the Massachusetts North Shore Labor Council realized, "Trade unionists in the U.S. don't exist in a vacuum, and we see ourselves more clearly when we see ourselves in relationship to others." He recalled that economists had predicted that global trade would result in the loss of low-skilled manufacturing jobs. Now he was now seeing skilled assembly and engineering jobs in the aircraft engine business go abroad to Mexico, Russia, China, and Brazil. But he added, "We've come a long way from thinking that the answer is just to 'Buy American.'"[iii]
Unionists poured into the streets in a march that added support to the 10,000 diverse activists that had already shut down the streets of Seattle, allowing only 500 of the 3000 WTO delegates to reach their destination. Opening ceremonies, including speeches by secretary of State Madeline Albright and UN General Secretary Kofi Annan, had to be canceled. While the official AFL-CIO march avoided confrontation with the police, many union activists left it and directly joined other demonstrators forming human chains across streets, often facing tear gas and risking arrest. A Steel Workers march the second day of protests was directly attacked by police. As one journalist put it, "Tear gas, rubber bullets, and police sweeps… are the outward signs of impending change-that the guardians of the social order have grown afraid. And there's always history in that."[iv]
December 2nd, President Clinton shocked official delegates by abandoning his earlier call for a mere "working group" to study the effect of trade on labor, replacing it with a call to include core labor rights in future trade agreements, rights that would be enforceable by sanctions. Some of his staff rushed to clarify that that was not what he really meant, and many within the labor movement doubted his sincerity. But what was clear was that the protesters' message was being heard all over the country, and Clinton had been forced to respond, at least in some way. The public was making its leaders listen to them. Democracy was breaking out.
The Battle in Seattle was not an isolated event. Although it was the first time the media had actually been forced to cover the burgeoning movement to democratize the global economy, the movement had been building for years. The fight over NAFTA had brought together labor, environmentalists, peace activists, and faith-based movements for economic justice. It had already claimed victories in blocking the secret move for a Multilateral Agreement on Investment that then WTO head, Renato Ruggiero had called "the constitution of a single global economy."[v] The trouble with this constitution was that only the rights of corporations were to be protected. Although the coalition had not been strong enough to block or meaningfully influence the shape of the NAFTA treaty, it had managed to block the president's authority to extend it or other such treaties with fast-track authority.
Fast-track authority would allow the President and his appointees to negotiate new trade treaties and bring them to Congress for an up or down vote without amendments. In the past his had meant that trade ministers consulted regularly with corporate lobbyists but refused to even meet with labor, environmental or human rights organizations. Treaties such as NAFTA, born of a clearly anti-democratic process reflected only the interests that had shaped them. However, beginning with the anti-NAFTA fights, the coalition of the excluded had been growing. Networks throughout Canada, the United States and Mexico developed. Over time they interconnected with their counterparts throughout the Americas and beyond building on pre-existing networks of labor unions, environmentalists, women's organizations, human rights groups, and religious organizations. They had stopped cold President Clinton's 1994 pledge to extend NAFTA from the Bering Straight to Tierra del Fuego. Now, drawing on resources throughout the country and the world, they were in a position to insist that the WTO could no longer exist without broader public participation.
The WTO Ministerial meeting had gotten off to a rough start. Efforts to force some sort of agreement failed when delegates from third world nations-left out of the meetings of "important" countries and emboldened by the demonstrators and the calls to make the WTO more democratic-refused to accept decisions they had not influenced. The meeting adjourned in chaos and failure.
John Sweeney, President of the AFL-CIO, said that the meeting's breakdown was a "breakthrough in the public debate over globalization" The broad coalition in Seattle had insisted that, "the global economy must be fundamentally changed to respect people and the environment, and not just the interests of multinational corporations. That new international coalition will redouble its efforts…to generate broadly shared prosperity and foster democratic and equitable development around the world."[vi]
The new international coalition of which Sweeney spoke had been ignored in most media coverage. It had been most evident, not in the street demonstrations, but in the dozens of forums held around Seattle, often in local churches who saw their mission as one of spreading social justice . Panels on biotechnology, indigenous rights, human rights, farming, labor organizing and intellectual property, featured experts and activists from all parts of the planet. They had the information and the expertise to back up the need for an alternative for the unquestioned corporatization of the planet which had been the agenda of the WTO up until this point. Though the media paid them scant attention, preferring to focus on window breakers they condemned as thoughtless Luddites, these hundreds of alternative world leaders proceeded in their work of informing and organizing those interested in a vision greater than generating profits. These sophisticated leaders did not reject a global economy, rather they pointed out the need to build an environmentally sustainable global society in which human rights and human dignity were preconditions for progress. They condemned the sort of "progress" that had spread devastation in their communities.
Cai Chong Guo, an exiled Chinese labor organizer, explained that part of China's rapid economic growth was based on preventing the formation of unions not controlled by the government. Independent organizers there routinely face long jail sentences. Disappointed by the recent decision of the US government to promote China's entry into the WTO with no discussion of human rights he told listeners, "We had hoped to count on your political leaders, but now we know our base of solidarity and support is you, the working people of the USA." At another gathering, retired Longshoreman Howard Key Cook seemed to reply, "For the first time, large numbers of workers are thinking globally. We can't solve our problems nationally anymore-we need international solidarity and support."[vii]
However, Mexican commerce secretary Hermino Blanco Mendozo insisted, "We cannot let those interests contaminate the agenda of the WTO with labor and environmental themes." Egyptian trade minister Youssef Boutros-Gali distrusted all the talk of international solidarity. "The question is why all of a sudden, when third world labor has proven to be competitive, why do industrial countries start feeling concerned about our workers? When all of a sudden there is concern about the welfare of our workers, it is suspicious."[viii]
The question is a pointed one. Why should a US worker care about a worker from Egypt, or China, or Mexico? One might equally well ask, do the governments of those countries care about workers? Activists in Seattle saw governments often to be more responsive to global corporations than to their own citizens. They, as citizens of the world, were in turn organizing to have a voice in the structures that were emerging to govern much of life throughout the planet. Annie Decker, blockading one of Seattle's many intersections, spoke for many when she explained her realization, "Trade and the power of corporations are affecting us in so many areas that we can all make connections and see common elements behind the problems we share."[ix] P
Politicians, claiming to speak for the citizens of their countries, as well as activists, who found it necessary to speak in spite of those governments, often used the word, democracy. Politicians seemed to use it to bolster claims that according to the laws and procedures of their countries, they could legitimately speak for their countries. They had been legally elected or appointed. Activists, with great awareness of the power of money and repression to influence elections, appointments and policies, preferred to speak of democracy in terms of policies that reflected the interests of the majority of the people. In every country this majority of the people consisted of workers, farmers, and students who often suffered from the results of their government's policies, policies which seemed to be increasingly influenced by forces operating at the level of the global economy.
Representatives of these majorities were in the streets and in the public forums of Seattle, not behind the closed doors of the WTO. When they shouted, "This is what democracy looks like!" they claimed to speak on behalf of the majorities of the world who had been excluded. By exchanging information and building new alliances, they sought to build the basis of a more democratic global society.
Economic Realities
Seattle was a battle over economic changes of tremendous historic import. As in previous changes-from village society to feudal society, from feudal society to the rise of nation states-the strong attempted to seize the lead and force others to follow. While global trade has existed for thousands of years, the WTO is part of an effort to build a corporate-dominated global society that would gradually shift power from nation states to the new corporate lords of a global society. This shift began to take shape in the 1970's.
In 1972, A.W Clausen, C.E.O. of Bank America, on his way to becoming head of the World Bank, wrote that
The business world has been watching with great interest the development of international economic institutions such as the International Monetary Fund, World Bank, International Finance Corporation, General Agreement on Tariffs and Trade, international private banks, and multinational corporations… [that] demonstrate a growing substitution … for what once had been virtually total dependence on political institutions.[x]
Soon after this article appeared, the first experiment in rebuilding a country to fit the new global economy took place in Chile. Until the early 1970's Chile had the longest tradition of democratic politics in all of Latin America. It was a democracy in at least the minimal sense that for over a hundred years, elections, not military coups determined who would rule. The country was not wealthy, but economically it was one of the more advanced Latin American nations. As education and communication increased in the country, a higher percentage of people got involved in politics. In that sense it was becoming more democratic.
Workers organized labor unions, and they became more involved in a variety of parties on the left. To prevent an outbreak of too much democracy, the US government worked through the CIA to influence the elections of 1958 and 1964 to assure that the Socialist candidate, Salvador Allende would not win. They tried to do the same in 1970, but the Chileans prevailed and elected him anyhow.[xi] As Allende instituted economic reforms favored by his working-class supporters, US corporations and the US government did what they could to bring him down. In September of 1973, they helped provoke a military coup that resulted in the immediate death of Allende and 3000 other Chileans and the dictatorship of Agusto Pinochet that lasted 16 years.
Pinochet had many eager advisors in his efforts to reorient the Chilean economy. Chile became the laboratory for the "Chicago Boys", protégés of what many regarded as the simplistic and extremely right wing economists of the University of Chicago led by Milton Friedman who believed that the primary definition of freedom was market freedom.[xii] People with money should be allowed to buy, sell, and invest with no interference from government. Anything that got in the way, such as government efforts to reduce poverty or to limit pollution, should be done away with.
Pinochet found their point consistent with his own instincts. He had made his career within a military that had close ties to the country's wealthy elites. These ties were only strengthened by his Cold-War training that identified hungry people organizing for change, not as fellow citizens but as agents of a global communist conspiracy. Pinochet acted quickly to eliminate unions. He sold off all state-owned enterprises to the highest bidder, and did whatever he could to make Chile attractive to those with money to invest, mostly foreigners. In the meantime many Chileans starved. Malnutrition soared.
Chile became an economic "miracle." With wages and regulations sliced to the bone, investment soared, as did exports. Chile became the model for how to make an economy grow-regardless of the consequences its workers suffered. Chile even led the world in doing away with its system of social security and replacing it with private investment accounts. Since 1981 Chilean workers have been required to invest 10% of their monthly earnings in the privately managed investment fund of their choice. The government waives taxes on these accounts, but eventually it will have no other responsibility to the worker's retirements. Employers have none. The funds have had a direct effect of strengthening Chile's investment capital resources.[xiii] Businesses have won already. It is still to early to judge how workers will fair under this market-based system, but initial studies show that much of the funds' good rates of return have been gobbled up by expense fees, that women will do far worse than men under the new system, and that many will qualify only for the minimum required benefit, about three quarters of the minimum wage, hardly enough to live on.[xiv]
Most of the world condemned the dictatorship of Pinochet and the barbaric freedoms championed by the Chicago Boys. In the 1950's and 1960s countries such as Vietnam, Angola, and Zimbabwe had fought to throw off the rule of colonial powers. In the 1970's, governments representing the majority of the earth's population-those living in nations referred to as the South or the third world-were demanding something they called a New International Economic Order. From Indonesia to India, from Nigeria to Nicaragua, they wanted the rich nations of the North-those who had been the first to industrialize and who had used their industrial advantages to colonize the rest of the planet-to give something back. They used their majority voice in the United Nations to argue for a democratization of the world's economy. They wanted investment from the North to serve the peoples of the South. They wanted better prices for their goods and a more stable supply of food. Several European nations, energized by former German Chancellor Willy Brandt, joined in calling for global reforms. So did progressive voices in the United States. [xv]
In 1981 Brandt urged leading nations of both North and South to meet at the plush resort town of Cancun, Mexico. He was encouraged by the presence of Socialist Party leader Francois Mitterand, the newly elected president of France. As most national delegations arrived in Cancun they planned to establish mechanisms for charting the New International Economic Order through the United Nations. The recently elected US President, Ronald Reagan, would have none of it. And he did not care if his manner was upsetting to others. After publicly joking about Latin Americans being late for everything, he arrived 15 minutes late for the formal start of the proceedings. Then he proceeded to say that the only hope for developing economies was to make themselves more attractive for international investors. He would consent to further discussions, not through the United Nations General Assembly which was dominated by the poorer nations of the world, but through the World Bank and the International Monetary Fund (IMF) which were dominated by the United States.
Many world leaders treated Reagan with embarrassed tolerance, as a cowboy, as an actor, not a politician. Surely he couldn't be serious. But the tide was being turned in Reagan's favor. Mitterand's initial pro-worker reforms in France were cut short by a massive flight of capital that did not return until he demonstrated his willingness to administer a capitalist economy under pro-capitalist rules. In 1982 Mexico agree to abandon its nominally populist economic policies for a pro-corporate investor policy-not due to a coup as in Chile-due to conditions attached to loans from the IMF, all to be administered by a staff of Mexican economists educated in the US at schools who were teaching the erstwhile radicalism of the Chicago Boys as the new orthodoxy.
The world had taken a new course. The post-World War II era economy that had been dominated by the United States became steadily more competitive in the 1960's as both Western Europe and Japan recovered from war-time devastation. In countries as different as the US and Mexico, workers' wages had risen steadily through the fifties and sixties. Yet economies throughout the world got shaky in the 1970's as oil producing countries formed the Organization of Petroleum Exporting Countries (OPEC) and drastically raised the price of oil in 1973 and again in 1979.
In the United States, corporations that had grown powerful but complacent in their decades of dominance, now faced stiff energy bills, competition from abroad-especially in the market for efficient cars, and a wave of consumer regulation stirred by the expansion of activist, participatory politics in the 1960's. They organized to retake the political establishment of the country through a vast increase in political contributions, lobbying and public propaganda.[xvi] They moved to cut government regulations, and following the election of President Reagan, they increased their open campaign against organized labor. Both Presidents Carter and Reagan allowed the Federal Reserve to fight inflation by cutting workers' real wages. An economy that had seen nearly three decades of rising wages, declining poverty, and declining income inequality now saw poverty rise, workers' real wages fall, and the gap between the rich and the poor widen.
The same story held true in Mexico. Average incomes had risen until the mid-seventies when they spent a few years fluctuating before heading down as a result of government policy to set wage increases based on expected inflation rather than actual inflation. When inflation regularly exceeded government estimates by 20 to 25%, the purchasing power of workers wages steadily fell. This was not seen as a problem by US-educated government economists nor by advisors at the IMF or World Bank as lower wages should make international investment more likely. International investment, especially in export oriented industries, was seen as essential to earn the foreign exchange that was needed to pay off the foreign debt, payments which often exceeded half of all earnings from the export sector. As countries like Mexico were driven to increase exports, countries like the US saw employment in manufacturing steadily shrink.
Figure 1.1 [not in this excerpt] shows the relative changes in workers' wages. For both Mexico and the U.S. the chart shows the purchasing power of the wage-it's real value regardless of inflation-as a percent of what the worker could buy in 1969. The figures for the U.S. are based on the average hourly worker's wage in the private sector, $12.77 in 1998, worth only 97% of what that average wage could buy in 1969, and over 10% less than what that wage bought in 1973. For Mexican workers, the data is based on the minimum wage, a figure to which many wages are tied. Less than one third of all Mexicans earn more than three times the minimum wage. Twenty percent earn less than the minimum.[xvii] In 1998 the value of the minimum was just three dollars per day. It was worth only 39% of the 1969 wage, and only a quarter of the wage paid in 1976.
We will have a chance to examine this all in greater detail later. The key point here is that forces operating in the international economy stimulated changes in both developed and developing economies that tended to lower workers' wages in all countries while strengthening the power of international finance and transnational corporations. This was all explained as efficient by a new economic orthodoxy, known to many as neoliberalism, that focused on business earnings over human needs, on individual investors over societies.
Measured in terms of Gross Domestic Product many countries that adopted these new ideas saw economic growth take off after an initial period referred to by the economists as "shock treatment." Many countries, like Mexico have seen an unsteady mixture of years of growth and years of decline since adopting the new measures. However, it is clear that whatever growth there has been, it has been absorbed by those in upper income sectors and by foreign lenders. For many workers, even the "good" years were years in which their incomes declined even further.
To enforce these changes labor unions have been attacked in nearly every country. This is why workers from throughout the world gathered in Seattle to demand a voice within the WTO. All these years of following policies supposedly aimed at helping economies grow had been accompanied with fine words and increasing hardships. Out of necessity, workers had begun to organize internationally to confront their common problems and to try to exercise some of that glorious democracy of which their politicians loved to speak.
This book will focus on the efforts of Mexico's Authentic Labor Front, known by its Spanish initials, FAT (rhymes with "hot," not "cat",) to build a movement that would empower workers confronting an economic system that prefers to treat them as factors of production, not as people with rights and dignity. The FAT has been at the center of coalitions formed throughout North America and beyond since at least the early 1990's. Understanding their story will help us understand what is happening throughout the world.
Hector Arellano, head of the building trades council in El Paso, Texas, claims that "The goal of NAFTA and other trade deals is to make it possible to step on workers of all countries with equal ease." He has been spending more time in recent years talking with labor activists from south of the border. He says, "We've been working together long enough that now we aren't just unionists but friends. And friends will do a lot for each other."[xviii]
Global corporations long ago declared that nations were obsolete. More recently workers have begun to find allies around the world. We are all in this together. In North America it is time that working people came to understand our common situation. This history of the FAT is offered to help that process along.
Organizing International Labor Solidarity
Tom Lewandowski is from Fort Wayne, Indiana. He spent years working in a General Electric plant there and got involved in his union. In 1990 as the cold war was falling apart, Fort Wayne decided to form a sister city relationship with Plotz, Poland. Due to his family heritage and his labor ties, the City Council asked him to go, to establish connections, and to report back about the Solidarity labor movement that had challenged the Communist Party for power. It was an interesting era. While the federal government and business leaders were busy breaking unions throughout the US, they were happy to support a labor union in Poland that might bring down part of "the Evil Empire."[xix]
Lewandowski did go, and when he came back he arranged for seven Polish workers to come to Fort Wayne, to work in a factory, and to see how labor unions in the U.S. did their work. He also found the media very interested in the story and became adept at getting workers to tell their own stories. This, he found, was the best way to break down stereotypes and develop concern that crossed borders.
In 1993 as the battle for NAFTA geared up Lewandowski was disturbed by the xenophobia he heard directed at Mexican workers. Mexicans were described as lazy, dirty, stupid and hopelessly inept workers. Yet these same Mexicans were somehow going to steal all the jobs that people in the U.S. counted on. From his experience in Poland, he knew that reality was not likely to match that paradoxical picture.
Through a bit of investigation he got in touch with the FAT, the Frente Auténtico del Trabajo, a nationwide federation of unions independent of the government or any political parties. /*more how heard of, parallel w Poland?/* He had them send an organizer, Ezekiel Garcia, to Indiana for a visit. While Garcia was with him, Tom Lewandowski drove him around to union halls around the state and let him tell his story of what life was really like for Mexican workers. Lewandowski saw how Garcia's direct contact and real information transformed suspicious workers into solid allies. And wherever he went, he made sure the press got the story. When workers around the state got informed about how NAFTA was not likely to help workers in either country they contacted their congressional representatives, and they made a difference. Eight of ten representatives from the state voted against NAFTA.
In 1994 Fort Wayne was part of the national trend in Congressional elections. They replaced their Democratic representative with a new conservative Republican, Mark Souder. Yet Lewandowski won his ear, and now swears that he has as much influence over him as anyone on international trade issues.
In 1997 with a vote on fast-track approaching, he suggested to Souder that he actually go to Mexico and see what conditions were like. Eventually he convinced him and 15 other Republicans to consider going, and he passed the trip details on to the AFL-CIO. As Lewandowski tells it, the AFL-CIO was so unused to dealing with Republicans that the trip never came to pass, but that did not matter. Lewandowski and Souder had moved them all far enough that House Speaker Newt Gingrich knew he could not count on these 15 in what promised to be-at best-a close vote. The vote was never held that year.
Lewandowski, now the head of the North East Indiana Central Labor Council, was able to organize a tour of local workers for a "Visit Your Jobs" tour of the Mexican border area near Reynosa and Matamoros, just south of McAllen and Brownsville, Texas. He brought along a TV crew from the only unionized station in Fort Wayne. Their half-hour program showed the maquiladoras, the gleaming new factories of companies that were absorbing jobs from back home, the foul chemical stews oozing out of these factories into open waterways, some of the many children born with birth defects associated with environmental poisons, and the squalid living conditions of highly productive workers earning $5 a day. Response to the program has been so strong that they have rebroadcast it several times.[xx]
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