MIAMI, Nov. 26 — For the thousands of Florida workers who lost their jobs to free trade and the industries that struggled with open commerce, free trade comes at a price.
The proposed FTAA would remove trade tariffs and quotas from imports and exports to allow a free flow of goods, capital and services from Canada to Argentina.
AS GOVERNMENT OFFICIALS from 34 countries in the Americas met in Miami last week to negotiate a proposed Free Trade Area of the Americas hemispheric trade bloc, some Florida industries are still recovering from the downside of the North American Free Trade Agreement, the 1993 pact among the United States, Mexico and Canada.
Some Floridians fear an extension of NAFTA to Central and South America could be devastating to the state’s economy.
But a survey of Florida-based international trade experts and those in affected industries, revealed mixed opinions about the state’s future in a widened free-trade pact.
NAFTA’s track record on jobs has been criticized. Since it was ratified in 1993, more than 35,500 jobs disappeared in the import and export industry, according to the Economic Policy Institute report, “The High Price of Free Trade,” published Nov. 17. The Washington, D.C., research and education center is a nonprofit organization that analyzes the living standards of working people. It claims to be a non-partisan group, but its list of board members includes nine labor organization leaders and two former labor secretaries in Democratic administrations.
California lost 115,723 jobs in the past 10 years, the most in the nation, the report showed. From 1993 to 2002, more than 880,000 jobs vanished nationally in the import and export field. Of that total, 686,700 jobs, or 78 percent, were in manufacturing industries, according to the institute.
Since 1993, American capital has flown to Mexico to fund the construction of thousands of factories that manufacture products for export to the United States. The 10-year-old pact has widened the country’s trade deficit gap with its neighbors. The United States’ net export deficit with Mexico and Canada jumped from $30 billion in 1993 to $85 billion in 2002, a 281 percent increase, the institute said.
The proposed FTAA would remove trade tariffs and quotas from imports and exports to allow a free flow of goods, capital and services from Canada to Argentina and all nations in between except Cuba. The agreement is supposed to be worked out by January 2005, a self-imposed deadline.
FTAA proponents have said the proposed trade bloc, comprised of 800 million consumers, would open doors to small and medium-size companies in the area of trade and professional services, said David Batt, an international trade consultant with the Florida Chamber of Commerce in Tallahassee, a network of more than 100 chambers of commerce representing about 100,000 businesses.
Florida’s geographic location means the state stands to win rather than lose with the creation of the FTAA, said Charles Jainarain, a trade consultant with Greenheart in Orlando.
As a gateway for commerce to and from the Americas, Florida would benefit from an increased movement of goods, he said.
“All the trade partners will benefit in the long run,” he said. “But you have an adjustment [time], and in that period of adaptation, some companies expand and some others contract.”
While some jobs may move to low-wage countries in Latin America, service and transportation jobs would be created in Florida, which is an in-transit state for commerce, he said.
But replacing some jobs with others worries some labor and interest groups.
“How do you tell an employee who worked at the same factory for 22 years and is making $15 an hour that his job is moving to Mexico?” Jainarain said. “What do you do with those workers who are five years from retirement? Do you train them to work in information technology? I don’t think so.”
FREE TRADE IMPACT LINGERS ON
But for those in Florida severely affected by opening the United States to Mexican and Canadian products, free trade remains an open wound, said Terrence McElroy, spokesman for Florida Agriculture Commissioner Charles Bronson.
“It affected us very negatively,” he said. “It is hard to quantify. It resulted in vegetable growers going out of business.”
In the early 1990s, there were about 200 tomato growers. Now there are about 70, said Reggie Brown, executive VP of the Tomato Exchange in Orlando.
A provision in NAFTA put in place to protect his industry did not work, he said. “We were able to stabilize our situation by using the [U.S.] anti-dumping law.”
Mexican produce prices tend to be cheaper than Florida’s, as meeting the standards set by U.S. labor and environmental regulations bring domestic prices up.
“We are not protectionists,” McElroy said. “We advocate free trade because the greatest potential growth in our industry is in exports. But trade has to be fair. We need to keep the tariff in place to be able to compete with them.”
Florida citrus is one of the strongest industries opposing the FTAA under its current format.
Currently, Florida competes with Brazil in the production of oranges. Florida and the South American nation produce up to 90 percent of the orange juice consumed in the world, said Casey Pace, spokeswoman for Florida Citrus Mutual of Lakeland, an advocate group that represents about 10,000 citrus growers.
While Brazil exports 99 percent of its production, about 90 percent of Florida’s production is consumed domestically and 10 percent is exported.
Once the tariffs are gone, the Florida citrus industry fears Brazil will be able to sell its orange juice at a lower price and gain a monopoly the U.S. market, Pace said. The tariff now is seven cents a liter of orange juice. The citrus industry employs about 90,000 workers, she said.
Trade pacts also have the potential to undermine a nation’s sovereignty, said Bruce Nissen, director of the Center for Labor Research and Studies at Florida International University in Miami.
Countries may find themselves involved in legal battles with international corporations suing governments for enacting worker or consumer protection laws, which they view as trade barriers, Nissen said.
“Trade agreements are of the multinational corporations, with the multinational corporations and for the multinational corporations,” he said.
A ray of hope with the FTAA process is that, contrary to NAFTA, it invited civic and grassroots groups to submit recommendations to be included in the negotiations.
“It is progress,” Nissen said. “Of course, it could be window dressing.”
Pro-trade advocates said it is difficult to work out a pact that makes all parties happy.
“It takes courage and vision to be willing to create a free trade area,” said Al Cardenas, a partner with the law firm of Tew Cardenas Rebak Kellogg Lehman DeMaria Tague Raymond & Levine, which has offices in Miami and Tallahassee. He served as the chairman of the Republican Party of Florida from 1999 to 2003.
“In Florida, free trade needs to be cognizant of the fact that there will be a diminution of jobs and economic development in some sectors,” he said. “But there will be a job increase in sectors related to servicing imports and exports, trade, legal, transportation, air and marine cargo and in the sale of goods produced in Florida.”
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