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EconomicPolicyInstitute February 29, 2008

By now, there is ample evidence that “free trade” pacts have been good for transnational corporations but a bust for ordinary workers. That is one reason the 15-year-old North American Free Trade Agreement (NAFTA) has become such an important topic on the presidential campaign trail, especially in hard-hit manufacturing states such as Ohio.

EPI Vice President Ross Eisenbrey charted the movement of auto manufacturing since NAFTA was signed nearly 15 years ago. He found that in vehicles and parts, the U.S. trade deficit with Mexico ballooned from $2 billion in 1993 to nearly $31 billion in 2007. That translates into about 363,000 U.S. jobs, many of them in Ohio. A forthcoming book by EPI economist L. Josh Bivens shows that the integration of the United States and poorer global economies—accelerated by trade agreements like NAFTA—has substantially reduced wages for the majority of U.S. workers. It is no wonder the two Democratic candidates debating in Ohio argued over who was against the trade agreement first.

EPI’s position has long been that trade agreements must be rewritten to benefit working people, not only corporations and investors. In the case of NAFTA, Eisenbrey said, a long-term fix should include a continental “grand bargain” in which Canada and the United States commit aid to Mexico to nurture sustainable growth.

Luciano VasquezThe Bush administration is pushing for Congressional ratification of yet another trade pact, this one with Colombia. But a prominent labor leader from that country opposes the deal, in part because of continuing violence against union activists there. Luciano Sanin Vasquez, director of the National Labor College, told a gathering of journalists, government officials, and activists at a Global Policy Network event at EPI that more than 2,500 Colombian union leaders and activists have been assassinated in the last 22 years—making Colombia the most dangerous place in the world for unionists. The murder rate has dropped recently, in part because the government now provides protection to about 1,500 union leaders, but Vasquez said threats, kidnappings, and forced dislocations are more prevalent than ever. The killers are rarely punished—only 82 cases have been prosecuted—and often the murders are incorrectly classified as crimes of passion, he said. Vasquez said the decades-long wave of violence has been effective: Of Colombia’s 18 million workers, only about 800,000 are in unions and less than 300,000 work under a collective bargaining agreement. Entire sectors, such as coffee, sugar, African palms, and flowers, are essentially without unions. Vasquez said a trade agreement without labor rights “would be catastrophic for us.” Listen to his full presentation on GPN.org.

Race and ethnicity
About two dozen scholars and activists gathered in Los Angeles last week to help brainstorm ideas for EPI’s new Race, Ethnicity, and the Economy program, directed by Algernon Austin, who joined the Institute in January. Hosted by the University of Southern California’s Manuel Pastor, who recently joined EPI’s board of directors, and supported by the Ford Foundation, the full-day session connected people working in similar areas and helped give focus to future research, including a look at the intersection of race, the economy, and the criminal justice system.

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