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Trading Freedom 

Sending Electricity To Nogales Won't Empower The People In This Polluted Borderland Ghetto.

"The captain was watching the kid. The kid looked uneasy. Son, said the captain. We are to be the instruments of liberation in a dark and troubled land."

--Captain White, a fictional composite of American filibusters invading Sonora in the 1850s, from Blood Meridian by Cormac McCarthy


THE GROANING OF earth movers momentarily overwhelms the gurgling of Jose Manuel Robles Jr., seven months on this planet and now contentedly tucked in the shady crook of his father's arm.

Jose Manuel Robles Sr., 26, sits on the concrete block foundation of his rising home in colonia Oasis, yet another budding, bleary slum on the southern flanks of Nogales, Sonora. He cradles his son and he talks, the hot afternoon turning his sweaty face deep crimson.

From this spot both father and son can watch the shifting dunes of Parque Industrial Nuevo Nogales, a 500-acre manufacturing zone being sculpted across the road.

Jose Sr. has so far avoided working for the maquiladora plants springing up practically on his doorstep. "Construction pays a better salary than they pay over there," he says, pointing to ultra-modern factories spreading like brawny fortresses among the subdued hills.

Slim and earnest, with narrow features and curly brown hair, Robles says he can pull down 1,200 pesos a week in construction, compared with the 650 he can make in the American-owned factories.

In American dollars, that's about $120 a week for construction, compared with $65 at the plants.

Tough call.

Things aren't so bad, he says, smiling, here in a place where few norteamericanos would plant their butts for more than five minutes. The family's current home, a scrawny plywood shack, looms behind him. Hell, when money gets tight, he and his pregnant wife just skip food for a few days, he says, and buy a few more cement blocks for their new house.

After all, there are no utility bills to fret about because in colonia Oasis there are no utilities, no running water, no electric light. "But we do have faith," he says, "that things will get better."

He's asked about his hopes for the 1993 free trade masterstroke called NAFTA. Robles smiles again, but his eyes go flat. He playfully rubs the sparsely furred head of Jose Jr.

"NAFTA? No se," the young father says; the foreign words mean nothing.


JOSE ROBLES IS clean-cut, smart and hard-working. Put him in any American city, drop the accent, and he'd be considered just another hard-hat with a solid if unremarkable future.

Only this isn't America. And that makes all the difference in the world.

That's more than a bit ironic too, since Robles and his family are perched on the very flanks of a booming industry founded on the promise of abundant Mexican labor and stoked by the North American Free Trade Agreement. And they remain lousy with poverty, even as the engines of global commerce roar away--Arizona alone recorded $2.28 billion in trade with Mexico in the first six months of this year, a 56 percent jump over the same period in 1999.

Even recently deregulated utilities north of the border are hungrily eyeing the Mexican market. On August 17, Tucson Electric Power applied for federal permission to run a $70 million, 345,000-volt transmission line to Sonora, and the Public Service Company of New Mexico has submitted its own plan to the U.S. Department of Energy for linking to Mexico's grid. According to the latest DOE statistics, United States companies exported 1.9 million megawatt hours to Mexico in 1998, for revenues totaling $61.4 million.

Somebody's obviously making money here, or at least preparing to, and it certainly isn't guys like Jose Robles.

While NAFTA has sparked a smallish middle class in Mexico, and prodded overall trade between the U.S. and Mexico from $82 billion in 1993 to more than $200 billion last year, more and more Mexicans are becoming chattel in this fiefdom of globalization, mostly geared to feeding voracious American shoppers.

In terms of buying power, manufacturing wages in Mexico actually dropped by 24 percent between 1994 and 1997, according to the United Nations. And the Colegio de Mexico, an independent think tank in Mexico City, reports that more than two thirds of Mexicans now live in poverty.

After seven years of NAFTA, wages here have dropped to 1960s levels.

But before you dismiss such numbers as just another problem in perennially beleaguered Mexico, consider this: Rotten pay or not, factories owned by multinational companies are helping draw record numbers of people to the border. Nor is the demographic tide--and resulting shortages in everything from cold cash to decent housing and clean water--expected to turn soon. According to a 1999 study by James Peach and James Williams from New Mexico State University, the current Mexican border population of 4.8 million is expected to reach 13.5 million by the year 2020.

Billions spent in fruitless immigration crackdowns notwithstanding, that's one heck of lot of poor, desperate folks dwelling in our back yard.

It wasn't supposed to be that way. Started under the 1965 Border Industrialization Program, maquiladora factories were meant to provide an economic boost to the region. Operating under reduced tariffs, these American-owned companies ship components to their plants in Mexico, where they're assembled via cheap labor and then sent back north.

Also called twin plants, the maquiladoras were originally relegated to a 12-mile ribbon along the border. In 1972, they were granted access to the entire country with the exception of Monterrey, Guadalajara and Mexico City.

The industry's growth has been astounding. From 1970 to 1990 its contribution to the border region's gross domestic product jumped by 360 percent, and in 1990 comprised 6.4 percent of national GDP. Today there are more than 2,000 maquiladoras scattered across the country, with 97 in Nogales alone. The factories currently employ more than 1 million people.

Maquiladora policies are made in the hushed corridors of Mexico City, far from the chaotic border. Not surprisingly, most Mexican leaders have gratefully embraced the system, or offered only very tepid criticisms. They point out that twin plant wages are higher than the Mexican minimum ($1-$2 hourly), and currently range from about $53 a week for starters up to $120 for longtime employees. And the factories usually provide perks for their workers, including tiny grocery coupons and basic medical care.

In return, plant managers get more bargain-basement help than they ever dreamed of.

Even in light of NAFTA accords that will erase its special tax status in 2001, the industry remains undaunted. "We're expecting the maiquiladora trade in Nogales to expand by 10 to 14 percent in the next five years," says Luis Peralta, executive director of the 79-member Sonoran Association of Maquiladoras. "This year is the biggest expansion. We finished last year with 33,000 employees. Right now we have more than 37,000 employees."

There are currently 500 maquiladora jobs available in Nogales, he says, "and everything is due to global trade and new markets around the world."

"NAFTA is more than a trading bloc. It's a building block in our efforts to assert America's global leadership on behalf of American jobs and opportunity."

--President Bill Clinton, November, 1993


ENACTED BY CANADA, the United States and Mexico in 1993, NAFTA was touted as a great economic leap forward, providing a schedule of downward-spiraling tariffs that would eventually disappear altogether, in what was suddenly the world's biggest trading block.

Nearly a decade later, it has also spurred an increasingly industrialized, ever-more polluted borderland ghetto. This advent was hardly unforeseen; even in its infancy the accord was attacked by environmentalists who predicted an ecological nightmare, given traditionally weak pollution enforcement standards along the international boundary.

To quiet them, NAFTA architects provided for the creation of the Commission for Environmental Cooperation (CEC), the Border Environment Cooperation Commission (BECC) and the North American Development Bank, or NADBank.

That's a mouthful of acronyms for a single stated purpose: to soften the ecological impact of booming factories along the line. That's no small task, either. Years of criticism have made maquiladora managers quite secretive about their operations, and the pollution they pump out.

Though maquiladoras are required to repatriate hazardous by-products to the United States, this provision has been laxly enforced. And in their Annual Reviews Energy and the Environment report in 1999, independent researchers Diana Liverman, Robert Varady, Octavio Chávez and Roberto Sánchez labeled "industrial plants, especially maquilas" as a "significant source of hazardous wastes in the border region." They also cited "neurotoxic and respiratory symptoms in workers exposed to solvents, dusts and gases in the workplace.

"Water sampling," the report continues, "has revealed high levels of toxic substances such as volatile organic compounds and heavy metals, in rivers and wells downstream of industrial facilities in Nogales."

So what are NAFTA's environmental side agreements doing about this mess? Not much beyond cranking out endless committee reports and boosting travel budgets for government workers, say some environmentalists.

Established as a communications clearinghouse, the CEC has provided activists a venue for venting their concerns. In turn, the BECC is a binational review council that certifies environmental and infrasctructural projects--theoretically with plenty of public input--for poor border areas. Those projects are then referred to NADBank, which arranges for low-interest loans or for grants.

Despite lukewarm support from Congress and cuts in its operating budget, by last year BECC had certified 27 projects, 12 in Mexico and 15 in the United States. And as of last spring, NADBank had fashioned seven BECC-certified loans--including an $80 million package to revamp Nogales' dilapidated water system.

But getting the money to ground zero has been tough. NADBank has faced difficulty in locating funding sources, and the process has also become vulnerable to abuse. In 1997, for example, BECC came perilously close to certifying a massive sewer-system upgrade in upscale Green Valley, a move that couldn't have been further from its mission.

"I have wondered about this potential in a number of projects," says Mark Spalding, an international environmental policy expert in Del Mar, Calif. Spalding helped design NAFTA's environmental off-shoots, which he calls largely effective. Still, he's seen some bad stumbles. "Green Valley is one that after the fact seemed to have been ill-advised," he says, "as a system which was going to feed growth and feather the nests of powerful economic interests."

Dick Kamp, executive director of the Bisbee-based Border Ecology Project, gives the process a mixed review. "BECC has been cumbersome and inadequate at times, but is probably a success as a public filter," he says. On the other hand, Kamp also notes friction between BECC and the NADBank, which is less reactive to public scrutiny. "Many BECC people see NADBank as a complicated evil," he says. In the end, it comes down to "a little money out, and lots of politics."

Another NAFTA step-child was the Integrated Border Environmental Plan, aimed at strengthening binational cooperation in tightening environmental laws and reducing pollution. But IBEP's scattered approach to these problems--and its members' repeated, unfortunate referrals to the border region as "an arid wasteland"--didn't garner much confidence. In 1995 the body was reshaped by the Environmental Protection Agency and its Mexican counterpart, the Secretaría de Medio Ambiente, Recursos Naturales y Pesca, or SEMARNAP, into the U.S.-Mexico Border XXI Program.

Critics say this program, like its precursor, has added up to much jabbering, plenty of meetings and a slew of reports with few concrete results. Case in point: Despite its mandate to make border pollution data highly visible to the public, results from an EPA-funded air quality study begun in both Nogaleses--Arizona and Sonora--in the early '90s were secreted away for years. Now, most of the information is available only online. The problem there is that low-income Nogales residents (which happens to be most Nogales residents) on both sides of the line don't have computers.

What's behind the delays and shifty bureaucratic behavior? Both the EPA and the Arizona Department of Environmental Quality, which did the actual legwork on the Ambos Nogales Air Quality Monitoring Study, claimed that results couldn't be released until they were thoroughly analyzed. And of course the only qualified analyst in the world was booked up. For years.

The real reason the results (which finally proved mundane anyway) were hidden so long? Mexican officials from SEMARNAP, reportedly under pressure from maquiladoras, didn't want their ambient dirty laundry aired for public consumption.

This and other diplomatic, binational tie-ups have planted serious doubts about Border XXI's ability to effect real border improvements.

"I guess they've been good at compiling information, but exactly what else they're doing is a big question," says Michael Gregory of Arizona Toxics Information, also based in Bisbee. "Really, I think they were thrown in under NAFTA to appease environmentalists, but I haven't seen them actually create anything tangible."

Gina Weber is an EPA U.S-Mexico border coordinator. She defends the program, saying the EPA and SEMARNAP had to start from scratch. "Frankly, a lot of it involves changing laws. Mexican law does not permit certain data to be released. But what (Border XXI) says is that we were even able bring both parties (EPA and SEMARNAP) to the table" to discuss the issues.

Regardless, there's not much time left to render any greater accomplishments: Border XXI's mandate runs out this year, and there's no requirement under NAFTA to create a binational replacement.

Still, one thing these treaty side-agreements have forged is a new soapbox and cross-border links for activists like Gregory. In turn, this has left a few of the powerful--including outgoing Mexican President and free-trade champion Ernesto Zedillo--a bit unnerved.

When an international web of environmentalists recently helped kill a deal between the Mexican government and Mitsubishi to build a $100 million salt water processing plant on a fragile stretch of Pacific coastline, Zedillo came unglued. "It infuriates me that some groups used this project to gain fame and even, I have to say, to reap economic and political profits," he bitterly told reporters.

At a February gathering of the World Economic Forum, he went on to attack "the globophobes, self-appointed representatives of civil society (who) are trying to save the people of developing countries from development."

"It can't mean anything but good in terms of U.S. interests."

--Former U.S. Secretary of State James Baker, remarking on the presidential-election victory of pro-business candidate Vincente Fox.


FORMER AND INCOMING Nogales mayor Abraham Zaied Dabdoub is a strange cut of populist, a walking contradiction to equal the name of his Institutional Revolutionary Party. And he's still a proud member of the PRI, which ruled Mexico for 71 unbroken years until the National Action Party's Fox swept the presidential vote on July 2.

Zaied is also a rich man whose portfolio boasts, among other things, a Michelin/Uniroyal dealership and a Shell franchise. In fact, the mayor-elect is about as wired to the local business elite as a fellow can be, considering his blood-ties to the Dabdoub family. The Dabdoubs control much of Nogales' commerce, and also own plenty of property in the U.S., including filling stations, a chunk of land near the Tucson International Airport, and the repainted school buses that haul Sonoran shoppers north to the Wal-Mart in Nogales, Ariz.

He's likewise on congenial terms with the Kyriakis clan, also longtime Nogales power-brokers, and owners of El Cid Restaurant on Calle Obregon's tourist row. Nikita Kyriakis is the prime mover behind Parque Industrial San Carlos, a new 500-acre development that will eventually include factories, retail outlets and nearly 4,000 "low income homes" for workers, according to an advertisement in the maquila trade magazine Picture Yourself in Northern Sonora.

Even Zaied's nephew, Cesar Dabdoub, is hard at work developing the gargantuan Parque Nuevo, near the Robles' home in colonia Oasis.

But oddly, just as during his first mayoral stint from 1994 to 1997, the mayor-elect remains a pit bull when it comes to attacking both NAFTA and the maquiladoras. Today he sits calmly behind a big desk, in a well-insulated office anchored by department store art and tan leather couches. Only occasionally is the hush broken by diesel trucks roaring into his Shell station next door, on the southern tip of Calle Obregon.

A square-jawed, stately-to-taciturn politician who looks to be in his late 60s, Zaied cuts to the chase. "In Nogales we have 97 maquiladoras, so we don't have unemployment," he says. "But where in a U.S. factory workers might make $8 or $10 an hour, people working in maquiladoras receive only four or five dollars a day."

And it's just as expensive to live here as in Arizona, he says. "The only difference is the salaries."

Besides measly incomes, the maquilas provide "social security," such as doctors and medicine for the workers and their families, he says. "But the American companies are here because they are making money. Maquiladoras are OK in that they give jobs to people, but they don't pay a penny to the city for services like streets, sewers and police."

Instead, the plants pay a federal housing tax of about 5 percent on each worker's salary. That, combined with property taxes and transit fines, is then sent to the federal government. Of that total, the government returns only 20 percent to Nogales, Zaied says.

Still, the maquilas do have occasional spasms of generosity. "Sometimes, if they want, they help (with charitable projects), maybe with five, eight, 10,000 dollars--if they want to," he says. "There is no law to make them pay a penny. But we need money.

"When I was mayor before, our budget was only $7 million for 300,000 people. Once (former Tucson mayor) George Miller came to visit me, and I almost didn't have the guts to tell him that. Finally I did tell him, and he couldn't believe it."

In his next term, Zaied plans on prodding maquiladoras into donating to local schools. "Listen, I don't want to touch their money," he says. "I just want them to spend something. They're making too much money. It's legal--I'm not saying it's not. But it would be very nice on their part to spend some money in the city for their 40,000 workers that live here, because every worker has a husband or wife or children that would benefit."

The mayor also plans to lobby the federal government for assistance on behalf of Nogales' teeming poor. When it's suggested that such a campaign might prove dicey for him, a dyed-in-the-wool PRI-ista, under Vincente Fox's PAN administration, Zaied calculates his answer with a light chuckle. "In Nogales, my party lost everyone except for me," he says. "We lost a state representative, a federal representative, our senator lost.

"I'm the only one from the PRI that won," he says, "and I won 800 percent more votes than in 1994." Playing hardball with maquiladoras is apparently good politics.

Nor do a few jabs at free trade hurt. "NAFTA is good for the United States, not for Mexico," he says. "Oh yes, they've been exporting everything to Mexico. The United States wanted it, and that's why we have it."

"There is another name for the maquila industry and it is production sharing. That is just what the industry does, shares the wealth of production with its neighbor. We all live a little better."

--From an editorial by Don Nibbe, publisher of El Paso-based Twin Plant News.


MAQUILADORAS PRE-EMPTED NAFTA by some three decades, and in that time the companies have perfected the art of manipulating their employees like herded cattle. Picture Yourself in Northern Sonora showcases the sophistication of this industry, with full-page ads beckoning companies to gleaming industrial parks, the best of them complete with cookie-cutter housing for workers. There are ads from "shelter companies" like PINSA that offer to help upstart maquiladoras negotiate this new frontier with consultants and a ready-to-go workforce.

There's even an ad touting the eagerness of Nogales laborers to be useful. "Sonora, Work To Please And Win!" says the slogan, superimposed over a photo of blissful young Mexicans cheering from bleachers, young Mexicans looking intent, a young Mexican in a yellow hardhat shooting hoops, and a young Mexican dressed for results in a dark power-suit and tie.

On this page there are no shacks, no skinny children, no slimy pools of brackish water.

It portrays, in short, a manufacturer's Xanadu.

Jesus Morales Esquivar, 26, wears a faded blue sport shirt with a rip under the armpit, and he sits waiting for his shift outside the Weiser Lock plant. Here, for 700 pesos a week, or about $70, he stacks crates in the warehouse. He's clean-cut, buffed, and seemingly resigned to the job. He says the company treats its workers OK. But it's darned tricky to support a wife and 3-year-old daughter on his paycheck. "We can't save anything," he says. "The money is too low."

Weiser Lock is shutting down its Tucson manufacturing operation and relocating everything to this new $25 million, 280,000-square-foot behemoth in Nogales' Parque Nuevo. That means it will soon fire 800 to 900 Tucson workers making $7 to $8 an hour in assembly-line jobs. They're already being replaced by Mexicans like Jose Morales, pulling in $1.25 an hour--plus benefits like overtime, Christmas bonuses and medical care. That "fully loaded package" raises the Mexican workers' hourly total anywhere from $2.25 to $2.75 per hour, says Weiser president Vern Schroeder.

He defends his company's move, saying that NAFTA has provisions for helping laid-off Tucson employees find other jobs, or go back to school.

As for the new hires in Sonora, "It's the greatest thing for them," he says. "Just think what their options were before. I mean, they were unemployed. And right now, basically, when you look at what they're capable of earning ... and that's certainly a lot lower than in the United States, but for example, we give them two meals a day, a breakfast and a lunch. We give them medical attention. We have a doctor and a nurse on staff."

As for Mayor Zaied's complaints that maquiladoras take much but return little to the community, Schroeder says, "You've got to decide what is the private sector's responsibility, and what is the public sector's responsibility. Do we donate? Yes. We actively contribute to charities and things down there. Do we donate for the infrastructure down there? No, but we certainly pay taxes."

And more. For example, a new maquiladora digs its own wells, and then is charged by the city for the water it pumps, he says. "So we do all the work, and put all the investment into our property, and then we pay them. We basically turn over (our improvements) to the city."

Weiser really had no choice but to move across the border, he says, considering American consumers' taste for low-priced merchandise. "Our industry is pure economics. I can tell you that we didn't move to Mexico in order to enhance profits. Our objective was survival. When companies move to Mexico, or the Far East, which is even cheaper, all those cost savings are passed on to the consumer. When is the last time I've had a price increase at Home Depot or Lowe's?"

Under NAFTA, manufacturing jobs aren't the only gainful employment being shipped south.

Up the hill from Parque Nuevo, in the Kyriakis family's sparkling new Plaza Bel Greco, Domino's Pizza delivery drivers are primed and ready to spread pies to the masses, or at least those than can afford them. According to a shy, pretty teen behind the counter, a "Crunchy Grande" with jalapeños and chorizo comes in at 100 pesos, or about $10.

She says she makes about 1,300 pesos herself every two weeks.

But business is brisk, as the delivery boys goof off before mounting their fleet of Wolf motorcycles, all adorned in brilliant red, white and blue shirts.

They're asked about NAFTA, the agreement that makes their jobs possible. They just shrug, before kick-starting their machines to life.


THERE'S ONE MORE irony to life under NAFTA, says Francisco Trujillo, director of Nogales' 625-member chamber of commerce, or Cámara Nacional de Comercio, Serbicios y Turismo. "What happens is that merchants here are tied to the exchange rate of the dollar to the peso. And that's because a lot of the products that are consumed here are imported from the United States."

In other words, every time the peso takes a dip Nogales merchants take it in the shorts, by having to pay more for goods often produced by their own countrymen and then shipped north. At the same time, American companies here make out like bandits through reduced labor costs.

Meanwhile, many small businesses are being squashed by fierce competition from big American retailers now rushing to Mexico. The effects are worse in the country's interior, Trujillo says. "And the reasons are very simple. The terms under which NAFTA was signed were designed to benefit large corporations, mainly U.S. companies that came into Mexico and basically took over the market. I'm talking about Safeway, Wal-Mart, K-Mart. As a result, in cities like Hermosillo the small local businesses, the hamburger stands, the small retail clothing stores, are virtually gone because they cannot compete with those big firms.

"So really, the positive effects of globalization have not been seen by the small businessman in Mexico. And the regular citizens of Mexico are paying the price."

Farther up the street in Mariscos Mazatlan, restaurant owner Armando Rojo Lopez is digging bottles of Squirt from a blue cooler. The corner shop is clean and breezy, and four diners sit around a folding table in the corner, alternately gazing at a blaring TV, and across Calle International to the dingy border wall.

On the Arizona side, the wall is spiffy, tastefully decorated with blue-green iron bars. But from here all you see are surplus metal sheets from the U.S. Air Force, welded together in an ugly column that climbs gloomily up steep hills to the east.

Armando Rojo isn't much cheerier himself. Business has been slow, very slow, he says. He goes over to stir a pot of fish stew, and comes back to the counter, wiping his round face with a towel.

In between culinary duties he's asked for his opinion on the North American Free Trade Agreement.

"NAFTA?" He pauses. "Never noticed. It makes no difference to me."

He waves at the departing customers. Then he goes back to the stewpot, now steaming into the sunlit room, and carrying its rich aroma out into a brave new globalized world.

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