WATSONVILLE, Calif. — After Green Giant closed its vegetable processing plant here and moved her job to Mexico in the early 1990s, Yolanda Navarro turned her experience into a crusade against globalization. She crisscrossed the country with a plea: Don't support the North American Free Trade Agreement, or thousands more jobs will be lost.
A decade after Congress narrowly approved the agreement opening the borders between Mexico, the United States and Canada, the 47-year-old Mexican immigrant has seen her fears realized. Four more of this farm community's food processing plants have closed, eliminating nearly 2,000 jobs.
"There are a lot of things wrong with our economy, but one of the big things is NAFTA," said Navarro, a naturalized U.S. citizen who worked at the Green Giant plant with her husband, Lauro, for more than 20 years.
Nearly 400 miles south at the California border, Stephen Gross has a different view of NAFTA. The trade pact enabled him to build a thriving business ferrying goods between Mexican border factories, or maquiladoras, and stores and plants in the United States. His 150-employee company, Border Trade Services, handled about $600 million worth of auto parts, electronic components and other cargo last year.
"There are estimates that 10,000 to 15,000 people work in the maquiladoras, but live in San Diego," Gross said. "All those people are contributing to the San Diego economy one way or another."
The experiences of these two cities show that NAFTA's impact on the U.S. economy has varied dramatically from place to place and industry to industry. Consumers enjoy lower prices for many goods. Border regions have seen a boom in transportation and trade-related jobs. But others have suffered as NAFTA made it easier for U.S. automakers, food processors and apparel makers to shift low-margin, labor-intensive work to Mexico.
Continuing controversy over NAFTA reflects the uncertainty over America's future in an increasingly globalized economy. On the presidential campaign trail, Democrats mindful of the dwindling U.S. manufacturing base have attacked NAFTA for failing to adequately protect American workers and the environment.
NAFTA, which took effect Jan. 1, 1994, created the world's largest free trade zone, with a current combined gross domestic product of $11.4 trillion. To encourage the flow of capital and goods across borders, the agreement drastically reduced tariffs and other trade barriers, eased restrictions on investment and strengthened legal protections.
Critics argue that the pact failed to address problems created by massive industrialization along the U.S.-Mexico border, which has some of the region's most polluted rivers and air. The treaty also has done little to stem the flow of illegal immigrants northward. Bitter trade disputes over trucking, sugar and timber remain unresolved.
But there is no question that NAFTA hastened the economic integration of the United States and its neighbors. Billions of dollars have flowed from U.S. and Canadian investors to Mexican factories, stores and banks, along with raw materials and components for manufacturing. A steady stream of northbound trucks clogs the highways, carrying automobiles, televisions and vegetables to U.S. and Canadian customers.
"Is NAFTA, with all its warts, better than not having NAFTA?" asked Jeffrey Davidow, a former U.S. ambassador to Mexico who now heads the Institute of the Americas at UC San Diego. "My answer is yes, we're very much better off."
Trade with Canada and Mexico now accounts for one-third of the U.S. total, up from one-quarter in 1989.
California's trade with Mexico and Canada also has boomed. Exports to Mexico and Canada jumped from $12 billion in 1993 to $26 billion in 2002. In 1999, Mexico overtook Japan as the state's leading export destination and now accounts for more than 17% of the state's exports.
Canada, which sent $9.6 billion worth of autos and parts to California last year, sells more to the Golden State than to the European Union, South Korea, China, Hong Kong and Norway combined, according to Colin Robertson, the Canadian consul general in Los Angeles.
It is harder to measure NAFTA's impact on jobs.
Two years ago, U.S. Trade Representative Robert B. Zoellick said NAFTA-related exports supported 2.9 million jobs in the United States, paying 13% to 18% more than the average U.S. wage. Offsetting such gains are the 524,521 workers certified by the U.S. government as having lost their jobs or having had their hours or wages reduced because of NAFTA.
Critics argue the damage to the U.S. job base cuts much deeper than those figures suggest, affecting suppliers, retailers and others. Economist Robert E. Scott of the Economic Policy Institute, a liberal Washington think tank, says the U.S. has lost at least 879,280 jobs since 1994 because of NAFTA.
In NAFTA's lottery of winners and losers, the San Diego area has been a clear winner.
