CAFTA: Nicaragua Might Benefit at Expense of Honduras
Submitted by fyl on Thu, 2007/06/28 - 08:45.
Eyes on Trade of Public Citizen offers an account of how CAFTA apparently benefited Honduras at the expense of Mexico and now how Nicaragua may "benefit" at the expense of Honduras.
First it was Alcoa workers in Mexico who were pitted against lower wage Honduran workers. (They were told by Alcoa that they "could hire two Hondurans for every Mexican.") Now that Alcoa has busted a union organized at its wire harnessing plant in the El Porvenir Free Trade Zone in Honduras--immediately firing all 50-plus union leaders and organizers--local Alcoa management is threatening that if the workers continue to organize, the plant will be shut down and relocated to NICARAGUA, where "labor is cheaper and workers don't make so many demands or cause problems." Alcoa's race to the bottom strategy has spread from the U.S. to Mexico and now to Central America, where under CAFTA the workers are being pitted against each other to work for less and abandon their legal rights...
Video Clip on wire harness making in Nicaragua
This link (if it work) is part of a short video clip from pronicaragua. It is done by a man who started a wire-harness factory in Nicaragua, Arnecom. Now there more than one and the operation is much bigger. The clips sort of shows some images of the operation. This might not be connected in any way to the lead story, but the business they got was business they lured from Mexico, ad it is the same product:
http://www.pronicaragua.org/videos/Arnecom.wmv
Ford (via Alcoa)
The article is very short. There is not much detail about the workers or what they do, or who buys their product. This particular place makes autos wire harnesses, with the work basicallie farmed out for Ford, and perhaps some Mazda which Ford sells as Fords, etc. The article is fairly accurate as best I have seen in local papers. Here is a link to a site I do not really endorse but their short story offers a little more perspective: http://ww4report.com/node/4124 You could ignore the sexual harrassment accusations that are tied on later to the story. Not to say they are false claims but try finding a big business in Honduras where such things do not happen on an hourly basis. The rest of the story is of serious concern but the factory is not unique when it comes to worker conditions and should not be punished justs for that or singled out for that.
wire harnesses for cars are buggy whips
Back 20 years ago, a model electric train could run at different speeds, turn rails on an off or run in different directions and it was all done with bits of wire from a central controller. Limited function, difficult maintenance.
Not any more. Now you can have a dozen trains with built in video cameras, lights, sirens, running at different speeds in different directions and its all done with a microchip in the train and 2 wires from the controller to the rails. Much simpler, more function, no wiring harness.
One day, the car companies will do this and a wire harness will be one wire that goes around the car and connects every single device in parallel. You beep the horn, a signal is put on the one wire - the only device that recognizes that unique signal is the horn. "beep".
In other words, cheaper to make, more reliable, easier to install, less copper, easier to fix.
... and no need for a wire harness factory.
Think of the number of wires between a TV remote control with 20 different functions and the TV / stereo / DVD it controls. See what I mean?
Go build that wire harness factory somewhere else - its already obsolete.
Tony X Robins, Jinotega
Wire Harness
But, have you seen a recent wire harness setup? It is quite complicated, and they make good money because they are complicated and still very much needed. Every car main controls are via a wire harness. Even $50,000 cars, and definitely the Fords supplied via Alcoa. Have you considered selling your car elec tv remote control idea to Toyota or Ford? Course if the AA remote batteries die or you lose the remote or the car next to you on highway is with some drunk with the same remote, you cant control anyting inside the car...or most outside the cabin. The wires dont just control the car controls they connect them. If you change from a wired switch for fan to remote control you still need all the wires for the fan to battery and speed control wires and resisttor blobk wores for different speeds, etc. The remote doesnt eliminate most of the wires needed and would create some more wires for the sensor to detect the remote signal for each control. A car is not really like a tv set. A modern car is more like 50 tvs lined up each doing a different thing.
A race to the bottom
Capitalism is and always has been a race to the bottom where the lowest cost providor will win out in the end.
As long as there is one single country in the world without 'workers rights' (whatever THEY are!) then production will migrate around the globe. Someone, somewhere, will want to do the job 10 cents cheaper and there is nothing that can be done to change that system.
Communism, price controls, import export tarrifs, wage controls, labor laws are all like putting your finger on a blob of mercury. The market adjusts and your finger is on nothing.
I want my car 50 cents cheaper. I want my pension, invested in a car company, to rise. I want a job at any price. I am the market.
How can it be any other way?
Alcoa moves to Nicaragua, pollutes the environment, employs lots of people, people ask for more money, Alcoa says no, people organize and pass laws, Alcoa moves to Albania. After Albania, Chad, Cape Verde, Fiji ... So the world turns.
Tony X Robins, Jinotega
Who's at the bottom? The poor.
It's a gambit any corporation will make to reduce its cost. They're not evil. They're doing what they must to be competitive. Can they get away with? Sure, as you point out, where they're allowed to. But Nicaragua has to let them in first. Knowledge is power. Knowing what they've done, perhaps Daniel will protect people & environment by making just demands. Ya think? Alcoa cannot just sink capital into foreign soil, build a plant, without expectations of a reasonable return. If their costs suddenly jump, maybe they really can't afford to continue. They are not the only aluminum producers in the world.
These simple economic principles don't only affect corporations, they affect governments and individuals as well. All that handle money are capitalists. Didn't Hugo Chavez speak of possibly building an aluminum processing plant in Nicaragua, after the petroleum refinery, of course, when he addressed the people in Leon on March 11, 2007? IF it happens, who would dare unionize its labor force?
We, who are well-off, view it as a race to the bottom. There are poor by the thousands in Nicaragua who would stand outside the factory door day & night for a chance to earn what they offer to pay. Miserable as we know it to be, it lifts them up from the poverty pandemic to latinamerica. Now, the desperately poor of centralamerica risk their lives, and make Faustian bargains with coyotes, all for a chance to work in the States, often long hours, substandard conditions, and receive less than minimum wage (because they're illegal). Why would any human endure such today? We all know why. They're leaving something much worse. Therein lies the rub, alas, poor Yorrick.
Without question the largest economic force in the world today is China. They set the standards that businesses must meet or beat to survive, and those standards are pretty grim. Who supports them? Consumers everywhere, especially the poorest. All kinds of 'things' are coming into the marketplace in Nicaragua, 'things' made in China & Asia that people can afford, surprizingly. And, more than ever, it's buyer beware! Just look at all the cell-phones in poor Nicaraguan hands.