Mexican workers struggle to find NAFTA benefits

By Monica Campbell, Globe Correspondent, 10/12/2003

TIJUANA, Mexico -- Nearing its 10th anniversary, the North American Free Trade Agreement is losing its luster.

The benefit of a tariff-free and more structured business environment is no longer incentive enough for US and multinational firms under pressure to cut costs. Many are downsizing their maquiladoras -- as the foreign-owned factories are known. Others are moving to China. Although the $1.75 an hour that a low-end Mexican factory worker averages still lures companies, the 35 cents per hour a Chinese laborer earns is tough to resist.

In the past three years about 540 factories have left Mexico, taking with them more than a quarter million jobs, according to Mexico's national statistics agency. Dave Lopez, operations chief at Aldila Inc., a San Diego-based maker of graphite golf club shafts that runs a factory in Tijuana, said his company has downsized in Mexico. "Golf is down, so we're not hiring like we used to," he said.

The sudden decline in maquiladora jobs is altering the lives of such people as Jesus Ruiz and his family, who migrated here six years ago from Mexcaltitan, a tiny island off Mexico's Pacific coast. There were no jobs back home and the Ruiz family thirsted for the steady work offered in Tijuana, where foreign-owned factories arrived in droves thanks to the 1994 NAFTA pact, which dismantled business barriers among the United States, Canada, and Mexico.

At 16, Ruiz settled with his family at the edge of the low-income community of Colonia Chilpancingo in Tijuana, about a mile from the border. After assembling a home from wood and cardboard scraps, the Ruiz family found work at the factories. Soon the area was solid with shacks as Mexico's poor and jobless arrived seeking work.

Locals named the shantytown Nueva Esperanza, or New Hope, a nod to the better life they hoped the steady factory work would deliver.

But these days, as workers stir at dawn to climb the rocky hill that leads to the plants, the Nueva Esperanza name rings hollow. Many here have yet to see their living conditions improve -- their neighborhood still has no running water, and electricity is rigged and spotty. Flowerpots placed at doorways are the only elegance. And their main hope is that they will not return from work with a pink slip.

Ruiz, now 23, still considers himself lucky. He has managed steady factory work over the past six years and says that his current job -- making bandages and IV bags at the US-owned Tyco International plant for $70 a week -- is a good one. "At least it's clean. I made auto parts before and my hair and face were caked with dirt."

Ruiz hands most of his earnings to his mom for food, the rest is for his sister's vocational school costs.

Ruiz's neighbor Sara Juarez, 36, makes batteries at the Sanyo Electric Co. maquiladora, one of Tijuana's largest. She has worked there for four years without a raise. "The bosses say sales are down, that times are tough," she says.

Juarez has reason to worry. Last year Japan-based Sanyo closed two of its six Tijuana factories, resulting in nearly 2,000 layoffs. Juarez's daughter, Teresa, started her factory work at age 15 (Mexico's legal hiring age is 16, but it is common for youths to get parental permission to work legally from the age of 14). Her income helps, but if times get tough, her only sister, Sara, 15, may have to cut short her schooling and seek factory work as well.

But the ranks of the unlucky are growing. Jorge Arredondo, 31, worked in Tijuana's maquiladoras until late last year, when his factory closed without warning. "They cleaned the place out, took all the valuables," he says. "We never got our final pay." Now Arredondo wakes up at 5:00 a.m. to make fruit juices to sell streetside to factory workers.

Arredondo joins other Mexicans who left their homes to work at the assembly plants and must now decide whether to head to the United States or revert to selling tamales, tortillas, or used clothing (which is how many got by in their hometowns). Along with tenuous labor conditions, workers -- and those who live near the plants -- must also face their grim environmental surroundings. NAFTA's environmental side agreement allows foreign companies to pollute at levels inconceivable in the United States. "We wanted a stronger environmental policy, but Mexico didn't at the time. The problem is not NAFTA, it's Mexico's political system," said Richard Feinberg, an international political economy professor at the University of California at San Diego who helped former president Bill Clinton to craft NAFTA.

The environmental fallout has pummeled Mexico's industrial neighborhoods. In Tijuana, at the industrial park near Colonia Chilpancingo, many workers shave a half-hour off their walk home by taking a shortcut past an abandoned battery recycling plant. The plant closed in 1994 but its guts -- which include a 8,500-ton heap of barrels bursting with toxins -- remain. Wind carries the waste over the houses below, while rain washes it into a school playground.

For years, locals have raised their fists at the factory's owner, Jose Kahn, an 86-year-old who lives in a well-heeled area of San Diego, demanding that he clean up the site. But their only visible victory to date is a government issued sign posted by the dump that warns of hazardous waste. "This shows what a foreign company can get away with," says Lourdes Lujan, who helped form a nonprofit group that pressures companies to clean up their messes. "Look, I'm not against NAFTA. It has brought jobs. But why do companies come here and do what they won't in the US?" asks Lujan.

The situation is similar in Mexicali, a blistering hot, maquiladora-intensive town east of Tijuana. Many factories here roll out large-screen televisions. The city's biggest factories, including Japan's Sony Electronics Inc. and South Korea's LG Electronics Inc., are next to El Robledo, Mexicali's toughest barrio. Unpaved streets are dotted with industrial drums and other refuse from the factories. The air is heavy. Black smoke rolls from a smokestack nearby.

Armirda Ortiz, a longtime resident of El Robledo, rolls up her shirtsleeves to show rashes. "I've had these for a few years now. So has my husband. They get worse when the dust kicks up," she says. Her neighbors complain of nagging coughs, allergies, and asthma. Ortiz's neighbor Lidia Orozco questions it all. "I think there are chemicals in the dust here. Look around. All you see are factories. What else can explain it?"

Adrian Fernandez of the National Institute of Ecology, a research arm of Mexico's environmental ministry, admits that the country's environmental codes remain antiquated. "We push for better policies, but things get so politized and corrupt here," he says.