The Selling of Free Trade: Nafta, Washington, and the Subversion of American Democracy by John R. MacArthur.
Editorial Reviews
Business Week, May 8, 2000
"The first book to relate the inside story of the battle over NAFTA in a highly readable style"
From Booklist
MacArthur is the grandson of John D. MacArthur, the billionaire who set up the well-known
foundation famous for handing out "genius" grants. In 1980 he persuaded his grandfather's
foundation to rescue a struggling Harper's magazine, which was then reorganized as a nonprofit
foundation, with the young MacArthur being named publisher in 1983, a position he still holds. His
father became wealthy in his own right, setting up the Bradford Exchange, an enterprise that "trades"
commemorative collector's plates. MacArthur is the author of Second Front: Censorship and
Propaganda in the Gulf War (1992), which was highly critical of the role of the press during the
Persian Gulf War. Now he takes on NAFTA and free trade. MacArthur is passionate and
vehement in his arguments that NAFTA is vastly unpopular; that passage was bought and paid for
by a coalition of Republicans, Democrats, and big business; and that the primary purpose of
NAFTA is to provide American companies with access to cheap Mexican labor. David Rouse
Seymour M. Hersh
"...The Selling of 'Free Trade' is a devastating unraveling of yet another Bill Clinton con job...It
doesn't get much better."
Book Description
This brilliant expos shows us how Washington works to make something happen, even when
confronted with widespread popular opposition. It chronicles the brutal and expensive campaign in
1993 that led to passage of the poorly understood, highly controversial law creating the North
American Free Trade Agreement, but its story is urgently up-to-date.
Above all else, NAFTA guaranteed U.S. corporations access to cheap labor in Mexico and
protection against expropriation there, but it was presented as a progressive law that would help
workers everywhere. John R. MacArthur, investigating the political and public-relations tactics of
the Democratic-Republican big-business coalition that favored Gore, Bradley, Clinton, Gephardt,
Bush, and the other members of what he calls the bipartisan oligarchy -- defeated the ad hoc groups
of working people, skeptics, and mavericks on Capitol Hill who questioned the value of a manifestly
unpopular bill. We learn how these oligarchs do their business with the Fortune 500 companies
dominating American trade policy and how they have disregarded the workers' and
environmentalists' concerns they now purport to care about. How NAFTA was put across -- or put
over on us -- is the central story of this book.
The Selling of "Free Trade" begins with the 1999 closing of the famous Swingline stapler plant in
Long Island City, New York, and ends with the factory's relocation just south of the border, in
Nogales, Mexico, where MacArthur watches President Ernesto Zedillo preside over the ribbon
cutting. In between, he talks to the lobbyists, White House aides, congressional staff, and politicians
who framed the debate over free trade and the American economy; he investigates the advertising,
public-relations, and politicking maneuvers that, with White House help, put NAFTA across as a
pure free-trade issue. And he talks to American factory workers who are losing their jobs: about
their work and their working conditions, about what the unions have or haven't done for them, about
what it's like when they come off their last assembly line and watch their jobs move to Mexico. He
attends meetings at an Arizona resort where a U.S. company helps U.S. businesses learn to save
millions of dollars by using NAFTA regulations to relocate their factories south of the border. And
he interviews Mexican workers about the deplorable wage variables and shocking lack of health,
medical, and educational benefits they must endure.
The ongoing decline of American democracy chronicled and predicted by writers as diverse as Joe
McGinniss and C. Wright Mills came vividly true, MacArthur shows, when the American people
were sold on what they thought was free trade but was actually a subversion of their political
system. His book is essential reading for anyone who cares about the future of the American
republic.
About the Author
John R. MacArthur, president and publisher of Harper's Magazine since 1983, is an award-winning
journalist and author. He is the author of Second Front: Censorship and Propaganda in the Gulf
War (Hill and Wang, 1992). He lives in New York City.
Reader Reviews
Comparing the Scorecard on NAFTA to the Promises, October 10, 2000
Reviewer: Donald Wayne Mitchell from a co-author of
The Irresistible Growth Enterprise from Boston
We are used to reading the promises about new legislation in bright headlines. What we
are less used to is getting the story of how it all turned out. The Selling of "Free Trade" is
at its best when it focuses on describing the impact on manufacturing jobs since NAFTA
was enacted. The detailing of how the law was passed is also included, and is a typical
story of special interests effectively using their resources.
The question of how to evaluate NAFTA economically is a complicated one, and the
book's main weakness is that the author has done too simple a job of analysis. However,
he should be commended for starting to compile the data.
Essentially, NAFTA has generated lots of jobs in Mexico along the border that pay a little
better and provide a little better working conditions than exist in the rural interior of
Mexico. There has been no boom in high-paying manufacturing jobs in the United States,
and many manufacturing jobs have been lost. The book does a good job of detailing these
factors. Ross Perot's promise of a "giant sucking sound" from jobs leaving the United
States was closer to the reality we have experienced so far that what anyone else told
us.
On the other hand and unmentioned in the book, NAFTA has created an enormous
strategic advantage for the U.S. economy by making low-cost, custom manufacturing
possible in the United States. Companies like Dell Computer would not be able to use the
manufacturing methods they do except for the presence of low-cost component factories
along the Mexican border. It is this system of one-of production at low costs that has put
such a severe crimp into Japanese and Chinese manufacturing exports in advanced
industries. As a result, a lot of manufacturing jobs for the U.S. were probably created or
saved that would otherwise have been lost.
The wealth effect of the increased values of American companies from the increased
profits is mentioned, but also is not analyzed. The wealth effect also creates and sustains
jobs, usually outside of manufacturing.
I suspect that if the analysis were undertaken it would show that NAFTA has been good
for developing jobs in the United States in total, even though the head-to-head
comparisons on manufacturing jobs belie that conclusion. However, no one can know until
the analysis is done.
On the political side, I don't know how I feel about the log-rolling to pass NAFTA until I
know whether the legislation was good for the country or not. I know it wasn't too helpful
for those who lost their jobs and could not find new ones. But in a time of decreasing
unemployment that effect should have been lessened. What happened to those who lost
their jobs is also unchronicled by this book, except for a few anecdotes. That would make
a great story in and of itself. On the other hand, the additions to the country seem to be
enormous in terms of market share gains, profit increases, and a higher value for
securities. Also, consumers have probably enjoyed lower prices.
If you like the human interest angle behind a major change like this, you will like Mr.
MacArthur's approach. He did a good job of grasping the detail with his story of the
Swingline move to Mexico and the political processes involved.
One thing I learned from this book was that true bipartisan support means that there is
an enormous amount at stake for some special interest. To do that there has to be
enough campaign money delivered to buy support from both major parties. I used to think
that such issues were above partisanship. Foolish me!
After you have read and learned from this interesting book, take another issue where the
politicians agree and ask yourself what the long-term consequences are for your country.
We should all consider those questions first and more carefully than the ones where they
disagree. Don't let complacency turn your country into a victim!
Meet the real Al Gore, October 5, 2000
Reviewer: A reader from USA
The Selling of Free Trade is particularly topical given Vice President Gore's recent class
warfare rhetoric on the campaign trail, in which he pledges to fight shoulder to shoulder
with the proletariate against the evil forces of big business. Anyone foolish enough to
believe this pabulum should be assigned this book. John Macarthur makes a convincing
case that NAFTA was not enacted through a democratic process of debate and
compromise, but through a cynical campaign of misinformation and vote-purchasing.
It is no accident that the two negative reviews of the book are from Canadians, and read
more like editorials than book reviews. Contrary to one of these reviews, NAFTA fit neatly
into Canada's longstanding policy of beggering its neighbor for manufacturing jobs using a
variety of means, including the auto pact of the 1960s which forced the big three to
construct Canadian assembly plants, and export cars to the United States. As the United
States hemoraged around 400,000 manufacturing jobs over the past two years, Canada
gained 400,000 -- an incredible number for a country Canada's size -- as its huge trade
surplus with the United States ballooned. These jobs are coutesey of specific, little
known NAFTA provisions, like exceptions to the NAFTA rules of origin that permit Canadian
tailored clothing manufacturers to pay far lower tariffs on imported cloth than their
American competitors. Most tailored clothing production has shifted to Canada. They
have also resulted from Canada's policy of maintaining a weak currency, not to mention
subsidized health care, and much higher external tariffs. Though Macarthur focuses on
Mexico, it is by no means the only beneficiary of NAFTA.
Macarthur demonstrates that the Clinton administration had to have known that NAFTA
would cost hundreds of thousands of manufacturing jobs, and decimate traditional
Democratic constituencies. But Clinton then, and Al Gore today, depends on the financial
support of big business, no less than any Republican, and businesses owe allegience only
to shareholders. These linkages are painstakingly disected.
If the NAFTA debate had been conducted honestly, on the merits of lower consumer
prices, greater efficiency, and higher corporate profits, it is by no means clear that it
would have passed. Nineteen of twenty television factories might not have been moved
to Mexico, along with most all small appliance production. General Electric might not now
be threatening to cut off suppliers who refuse to move their factories to Mexico, where
GE is moving all appliance production. Levi's jean production might not have moved to
Mexico. Anyone who denies the giant sucking sound depressing the wages of lower-skilled
Americans need only look around. This book is an ominous portent of the Gore
administration.
Singing the same old protectionist song, August 15, 2000
Reviewer: Jonathan Kay from Toronto, ON Canada
There are two protectionist camps in the United States. In one is Patrick Buchanan and
his doctrine of America First. His populist pitch is simple: Foreigners are taking our jobs. In
the other are people such as Harper's publisher John R. MacArthur. As a salon-dwelling
member of protectionism's lefty camp, he cares deeply about complex issues such as
rainforest preservation and child labour. He has a harder job than Buchanan: When he
knocks free trade, he can't limit himself to the dubious proposition that it harms American
workers. He has to tackle the even more dubious proposition that it threatens labourers in
the developing world as well.
MacArthur's new book, The Selling of 'Free Trade', advances the argument that the
American campaign in favour of the North American Free Trade Agreement was a cynical
sham. The businessmen who lined up behind Bill Clinton simply wanted a piece of paper to
protect their Mexican sweatshops from expropriation. NAFTA was about investment, not
trade. And so the five-letter acronym is a lie all by itself.
If you share MacArthur's distrust of globalization, then the bulk of the book -- the
detailed back-story of how Clinton and his staff won political support for NAFTA -- will be
of great interest. But if you do not, The Selling of 'Free Trade' will be a bore. The nuts
and bolts of Washington logrolling are not inherently captivating. A reader who comes at
The Selling of 'Free Trade' with a benign view of NAFTA will find the story of what lobbyist
met which congressman where and who issued what press release when to be dull and
dry.
MacArthur, knowing this, spends roughly a third of his book trying to convince his readers
that NAFTA was not only corrupt in conception, but also harmful in effect. He relies
mostly on anecdote; and why not? Storytelling is a protectionist's best friend. The
benefits of free trade are widely diffused among consumers and manufacturers, while the
costs, though smaller, are borne by an identifiable group of failed business owners and
laid off employees.
And so, in the very first chapter, MacArthur makes a lunge for our heartstrings by
sketching the post-NAFTA shutdown of the Swingline Inc. stapler manufacturing plants in
Queens, N.Y. We are told the tale of Gorica Kostrevski, a hard-working Macedonian
immigrant who, after 26 years with Swingline, loses her union job as a machine operator
when the company moves its operation to Mexico. From there on in, MacArthur tirelessly
summons up the image of poor Gorica to lacquer a human-interest veneer onto his
political chronology. Later on, MacArthur takes us to the Mexican city of Nogales, home
to thousands of American-owned assembly plants (maquiladoras), including Swingline's.
Using the city's impoverished townships as his backdrop, he hammers home the point that
low wages and a lack of independent labour unions produce a work environment that is
"exploitative."
It is not a convincing line of argument. Cheap labour is the one inexhaustible resource
that all poor nations can sell the world. Mexico's exports have skyrocketed since NAFTA's
implementation. And, as MacArthur himself grudgingly admits, the working conditions and
wages available at maquiladoras are better than those available in Mexico's homegrown
industries. If maquiladoras paid a U.S.-scale union wage, or were required to provide
American-style fringe benefits, every one of them would close. Forty-hour work weeks
and ergonomic counsellors are luxuries the developing world cannot afford. And if
MacArthur actually lived in a Nogales shantytown -- rather than merely driving through
one to collect anti-maquiladora sob stories -- I rather doubt he would mind being
"exploited" by an American employer. The "exploitative" tag only makes sense when
MacArthur applies as his benchmark the rights of America's unionized workforce -- a
workforce that, thanks to education and capital investment, is many times more
productive per capita than Mexico's.
On this latter point, the distinction between Pat Buchanan and John MacArthur --
between the leftist and rightist strains of protectionism -- starts to blur. Both venerate
Joe Union and see any threat to his livelihood as a sort of conspiracy. It is just that
Buchanan sees it as a conspiracy against nation and MacArthur sees it as a conspiracy
against class. But, at least Buchanan spares us the argument that he is protecting the
interests of the world's huddled masses. MacArthur, with his sanctimonious play on the
idea of "exploitation," does not.
The Selling of 'Free Trade' carries the mark of a dying breed. Few on the left can look at
South Korea, Ireland and Indonesia and maintain with a straight face that globalization
constitutes an exploitative plot hatched by Nike and McDonald's. While Harper's is still full
of anti-globalization screeds (a recent issue contained an affectionate profile of the
anti-corporate rabble that descended on Seattle in November), other leftist vehicles --
such as The New Republic and The New York Times -- are conceding the obvious. It is
only a matter of time, I suspect, before John MacArthur does the same.
And one more thing: When I finished The Selling of 'Free Trade', just for fun, I phoned
Gorica Kostrevski at her home in Whitestone, N.Y. (there is only one Kostrevski listed for
all New York state). I asked her what happened after she got laid off from Swingline. "I
get new job quick in Manhattan. I do maintenance now," she told me in her thick
Macedonian accent. "More money?" I asked. "Yes, more money," she said, "I am good
worker!"
The death of Franklin Roosevelt's Democratic party, May 22, 2000
Reviewer: Frank J. Walter from New York
The author of this book clearly shows that NAFTA is not about "free trade," but is in fact
an investment agreement designed to protect American multi-national corporations that
relocate to Mexico for "cheap labor". Mexico has a GNP about 4% of the U.S. GNP; the
only people in Mexico who are able to buy American goods are either in the durg trade or
the Mexican government elite. The author tells a story of discarded American workers
(Swingline Staplers, Long Island City) who loose their plant and jobs to their Mexican
brothers and sisters in the great "cheap labor" camps of the Maquiladora Program.
But this is also the terrible story of how Bill Clinton and Co. finished off the party of FDR,
and made it the party of "cheap labor" sold to corporate interests for campaign
contributions. As I read the book I kept thinking that maybe it's time for the American
labor movement to run a candidate for President (Bonier?) and demand a North American
Free Labor Agreement that will protect American workers, Mexican workers-and all
workers everywhere. And I think such a movement would likely attract many on the
American right, who are very anti-authoritarian, and deeply distrustful of what Mussolini
called "corporatism"-which is what Mussolini said fascism was all about.
Great, thought provoking book. Bravo.
