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MULTINATIONAL CAPITAL AND FREE TRADE ZONES.
Term Paper ID:29126
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Essay Subject:
The internationalism of capital.... More...
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10 Pages / 2250 Words
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Paper Abstract:
The internationalism of capital. Creation of an economic system in which free trade zones exploit and oppress workers. Dominance of free trade zones by international capital rather than by domestic capital and the State. Declining local employment opportunities. Maquiladora Program (factories), Mexico and NAFTA. Globalization benefiting the elite, not the workers.
Paper Introduction:
Multinational Capital and Free Trade Zones
A new hegemonic regime brought about by the internationalization of capital has created an economic situation in which free trade zones are becoming the locus of exploitation and the oppression of workers (Cravey, 1998). The emerging regime is characterized by the dominance of international capital over domestic capital and the state. The new export-led factory regime created by free trade zoning is a regime in which manufacturing and production jobs have exited the First World and then relocated in either the Second or Third Worlds where labor is cheap and human capital plentiful (Kopinak, 1996).
Free trade zones, created by treaties such as the North American Free Trade Agreement (NAFTA) have been promoted by
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Tucson, AZ: University of ArizonaPress. In export processing, the concentration of firms infree trade zones stimulates the creation of a distinct new labor force.This labor force is largely comprised of women who are particularlyvulnerable to exploitation and abuse (Raynolds, 1998). Absent in the maquiladoras of Mexico and other nations are such taken-for-granted items as: employee training and basic worker education aboutworkplace hazards, standard workplace safety programs and activities,health insurance, opportunities for advancement, and adequate local serviceinfrastructure (Double standards..., 2 ). There are more than 75 , Mexican maquiladora employeesworking in jobs for significantly lower wages than are paid to theircounterparts in the United States. Though population distribution in the region is irregular,the maquiladora system has placed enormous strains on the resources ofmunicipalities in areas such as housing, education, health, and welfare,and sanitation. The maquiladoraprogram permits the inputs and the machinery to process them to enterMexico tariff-free. According to Ramirez (2 ), the concentration of the maquiladorasnear the U.S.-Mexican border has led to massive internal migration inMexico itself. NACLAReport on the Americas, 29(5), 1-3. Where the big fish eat the little fish: Women'swork in the free trade zones. The neoliberal project provides varioustraditional imperialist ways for the world's elites to enrich themselves atthe direct expense of underdeveloped countries and their people. Some believe that a new industrial paradigm will gradually emerge andthat maquiladoras will become flexible, with multi-skilled workforces, andless hierarchical management styles. Safa, H.I. Dependency theory opposes a universal theory of stagesof growth and argues that not all countries go through the same stages.Further, dependency theory suggests that capitalism may not necessarilydevelop the forces of production in countries of the periphery in the sameway that it did in the center. Others, including Kopinak (1996) andCravey (1998), maintain that if such a shift is to emerge, there are nosigns that this is occurring. One of the most pressing negative effects of this particular system,says Safa (1997), is that an economic emphasis on free trade zones oftenresults in declining employment opportunities outside the zones. (1995). NAFTA has not succeeded in improving this situation anddoes not appear likely to do so in the future. Harnessing women's work: Restructuringagricultural and industrial labor forces in the Dominican Republic.Economic Geography, 74(2), 149-17 . Social dumping in Mexico after NAFTA.Multinational Monitor, 16(4), 2 -25. (1996). Topik, S. Brown also commented that while the Mexican government (like thegovernments of other countries with free trade zone maquiladoras) bearsonly part of the responsibility for enforcing environment and safetyregulations (Double standards..., 2 ). Topik (1998) believes that dependencytheory is a good vantage point from which one can understand the negativeeffects of free trade zones and the creation of export processing factorysystems of economics. The question of whether ornot free trade agreements such as NAFTA have improved the maquiladorasystem is seen by Gruben (2 1) as particularly important. When the goods return to the country of origin,shippers pay duties only on the value added by manufacture in Mexico. Fewcountries that rely on free trade zones for economic growth have createdthe regulatory environment needed to ensure that the rights of workers areprotected. (1999).Maquiladoras: Entrepreneurial experimentation to global competitiveness.Business Horizons, 42(2), 37-45. Desert Capitalism: Maquiladoras in NorthAmerica's Western Industrial Corridor. Economic & Financial Review, 3(2 1), 11-21. Male andfemale workers in the maquiladoras are an exploited and victimized groupwith few meaningful opportunities for advancement or for the acquisition ofan adequate quality of life. Over the first six years after the onset ofNAFTA, maquiladora employment grew 11 percent as compared with 78 percentover the previous six years. Migration World Magazine, 28(3), 14-3 . The acceleration of foreign direct investmentunder NAFTA has contributed to the creation of more than one-half millionnew jobs in the United States - Mexico border region. Monthly Review,49(5), 28-34. manufacturers exploit lax occupational safetyand health enforcement in Mexico's maquiladoras. Environmental Action Magazine,27(3), 33-37. Brouthers, McCray, and Wilkinson (1999) consider the maquiladoras asartifacts of entrepreneurial expansion, regional and multinationalexpansion, and NAFTA. In theory, freetrade zones are said to create job opportunities for indigenous people thatwould otherwise not be created. Most such firms claim that they have a single standardfor facility management that functions regardless of geographic location,but Brown and others who have investigated conditions at the maquiladorascontend that this is simply not the case (Double standards..., 2 ). Bacon (1995) hasargued that pollution and environmental degradation along the Mexican-U.S.border is increasing. Shields (1995) believes that NAFTA did not produce a new era of laborrights in Mexico. Thebeneficiaries of globalization, free trade, and the maquiladora system ofMexico and other poor nations are the capitalists, the multinationalenterprises, and the investors who fund expansion of such plants and notthe workers. Was NAFTA behind Mexico's high maquiladoragrowth? Accompanying this increase in pollution is a rise inthe rate of babies born with birth defects, an increase in life-threateninghealth conditions, and health effects impacting upon animal populations aswell as humans. (1995). Gruben, W.C. Many of the newfactories, universally known as "maguiladoras," have become a study inworker exploitation, oppression, and even brutalization (Cravey, 1998). Safa (1997) points out, for example, that in the DominicanRepublic, union activity has been permitted only since 1992 and then, onlyunder carefully monitored conditions.Maquiladora Program In Mexico, Gruben (2 1) states that the most striking industrialphenomenon in the wake of NAFTA, is the rapid growth of plants that operateunder the maquiladora program. (1998). Shields (1995) points to the fact that when unions arepermitted in the maquiladoras, they tend to be company sponsored andcontrolled unions that give only lip service to representing workers.Workers are still compelled to work long hours for lower pay and withoutthe benefits that are considered standard in the West or North. However, with thepassage of NAFTA, the output and employment growth of the maquiladorasbegan to accelerate markedly. (2 ). The maquiladoras in Mexico offermultinationals an opportunity to benefit from cheap labor, reduced levelsof government scrutiny and oversight, limited unionization, and arudimentary environmental protection system. As free trade continues to expand, it is likelythat the situation experienced by Mexican maquiladora workers will notimprove. Dependency revisited: Saving the baby from thebathwater. (2 ). Migration and maquiladoras on Mexico'snorthern border. Double standards: U.S. Latin American Perspectives, 25(6), 95-1 . Wilson (1997, p. Jim Sessions (1999) reported on an international delegation thatexamined the working and living conditions of maquiladora workers inTehuacan, Mexico. References Bacon, D. Kopinak, K. The small cities that have become the home of maquiladorashave grown well beyond the capacity of their governors or administrators toprovide adequate funding for necessary infrastructure improvements. Forum for AppliedResearch and Public Policy, 14(1), 58-65. (1999). Thisensures that the quality of life available to maquiladora workers will bepoor. Further, Sessions (1999) notes that where the Mexicanmaquiladoras were once located almost exclusively on the Mexican-U.S.border, the new trend is to place these plants in the southern regions ofMexico where scrutiny is even more lax than at the border. 29) states that "Mexico has been a sort oflaboratory for the neoliberal experiment ever since the country's 1982 debtcrisis." The maquiladora expansion that has taken place in the wake ofNAFTA in Mexico has not offset the loss of jobs in the agricultural sectorthat resulted from the various debt crises the country experienced in the198 s and 199 s. NAFTA, says Gruben (2 1) did not create the maquiladoras in Mexico.These plants had been in existence since the 196 s. In Tehuacan,for example, the plants are far from the eyes of consumers, and religious,civic and human rights groups. Most of the people working in the Mexicanmaquiladoras are women, who are typically paid less then their malecounterparts in other manufacturing centers. Workers who once moved across theMexican-U.S. The same comments have been advanced by Raynolds (1998) withrespect to maquiladora operations throughout the Caribbean and theDominican Republic. U.S.'s maquiladoras in Haiti violate minimum wage law. The Mexican government, says Brown, cannot affordto discourage the foreign firms that are willing to invest in the nationaleconomy. Wherever they are located, the maquiladorashave been seen as structuring labor and labor policies according to genderissues, offering limited economic opportunities to workers, and doinglittle to advance the rights of workers (Gruben, 2 1). (1996). Cross-border blues. Raynolds, L.T. However, in the realworld, there is little or no meaningful enforcement of these regulations inMexico (Double standards..., 2 ). Most of themaquiladoras were found to be little more than sweatshops where cheap laborand worker exploitation were both commonplace. were eliminated). Ratnapriya, S. Critics of NAFTA who argued that the ultimate impact ofthe agreement would be to shift jobs from the United States to Mexico andto increase worker exploitation in Mexico are convinced that these effectshave occurred. Busting labor in Sri Lanka. (1998). As more and more Mexicanworkers pour into the cities where maquiladoras are located, livingconditions tend to deteriorate at an accelerated pace. Globalization and multinationals, therefore,has tended to benefit the elites and to negatively impact upon the lives ofworkers across the world. Women and Work in Mexico's Maquiladoras.Lanham, MD: Rowman and Littlefield. Ramirez, C.Q. Brouthers, L.E., McCray, J.P., & Wilkinson, T.J. (2 1). In Sri Lanka, where a free trade zones has been established for sometime, workers in export-oriented factories are routinely exploited. The emerging regime is characterized by the dominance ofinternational capital over domestic capital and the state. Mexico is a heavily indebted countrythat is almost completely dependent on foreign investment to pay theinterest on the debts owed primarily to U.S. (1997). In theaftermath of NAFTA, the delegation fielded by the National InterfaithCommittee for Worker Justice, found that working conditions haddeteriorated dramatically in the Mexican maquiladoras. (1995). Topik (1998) examined free trade zones from the perspective ofdependency theory. This city has become a major production center of bluejeans that are sent to the United States for final processing. (1997). Wilson, D.L. Gruben (2 1) considers maquiladoras to be highly controversial.Originally designed to provide an employment alternative in themanufacturing center for braceros (agricultural workers who lost their jobswhen American policies permitting Mexican agricultural workers into theU.S. NACLA Report on the Americas, 3 (5), 31-37. MultinationalMonitor, 21(11), 24-28+. Sessions, J. In its simplest organizational form, amaquiladora imports inputs, processes them, and then ships them back to thecountry of origin where they may be further processed. Wilson (1997) also claimsthat the maquiladora phenomenon in Mexico cannot be separated fromneoliberalism, or the practice of structural adjustments, privatizations,and free trade that the First World has been imposing on the Third Worldfor more than 15 years. Garrett Brown, coordinator of the Maquiladora Health &Safety Support Network, recently stated that legal protections for workersafety and health in the Mexican maquiladoras are, on a formal level,roughly equivalent to those in the United States. The anticipated benefits to Mexican workers of themaquiladora system have not emerged. Free trade zones, created by treaties such as the North American FreeTrade Agreement (NAFTA) have been promoted by their supporters as capableof spurring economic development in poor countries, leading to greateremployment opportunities for workers, and ultimately resulting inimprovement in working conditions (Kopinak, 1996). Cravey, A.J. Do maquiladoras matter? While it is certainly true that new jobshave been created in Mexico and other free trade zone areas, it is equallytrue that the promise of free trade zones has not been realized. Theyreceive low pay, are pressured to work overtime, exposed to unsafe anddifficult working conditions, and subject to police violence andintimidation if they protest against their abusive employers (Ratnapriya,1995). Consequently, enforcement of environmental or safety regulationsis lax - creating a situation in which maquiladora workers are vulnerableto a variety of negative health effects. Multinational Capital and Free Trade Zones A new hegemonic regime brought about by the internationalization ofcapital has created an economic situation in which free trade zones arebecoming the locus of exploitation and the oppression of workers (Cravey,1998). Wilson (1997) takes the position that the maquiladoras permitcapitalists to move jobs and capital from more costly countries orlocations to less costly countries. (1998). Shields, J. Sessions (1999) further stated that despite promises by the foreignfirms that invested in the maquiladoras in this city, working conditionsand wages for the largely female workforce have not improved. MultinationalMonitor, 16(1-2), 32-35. The Fortune 5 and othermultinational corporations based in the First World that own and operatethe maquiladoras are themselves responsible for ensuring worker andworkplace safety. Familial povertyhas increased in the border towns where most of the maquiladoras areconcentrated and little effort is made by the Mexican government at eitherthe state or national level to force municipalities and foreign capitaliststo take the steps that are indicated that would improve working conditionsand the lives of workers.Conclusion Those who support free trade and the creation of free trade zones makereference to the fact that foreign direct investment is the primary key tolocal sustainable economic development (Kopinak, 1996). After NAFTA. Whenworkers attempt to protest their treatment, Shields (1995) asserts that heyare treated harshly, often discharged, and otherwise victimized. Banks and internationalfinancial institutions. The new export-led factory regime created by free trade zoning is a regime in whichmanufacturing and production jobs have exited the First World and thenrelocated in either the Second or Third Worlds where labor is cheap andhuman capital plentiful (Kopinak, 1996). border to work in the North American agricultural sector arenow forced to work for lower wages in Mexico's factories.
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