Thread: Workers Fear Trade Deal

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Posted on: Tuesday, 26 July 2005, 12:01 CDT

Workers Fear Trade Deal

Jul. 26--PRATTVILLE -- This is a story about small towns losing thousands of jobs, and millions of people saving hundreds of dollars.

It's about textile mills and free trade, small communities and their ever-changing faces. Many communities such as Prattville and Tallassee were built on mills that have either closed and or fell victim to free trade deals.

For many tri-county textile and agriculture workers, the North American Free Trade Agreement has crippled their business. They're now trying to make sure the Central American Free Trade Agreement, often referred to as NAFTA's little brother, is stopped in its tracks in Washington.

NAFTA led to the closing of Tallassee's Mount Vernon Mills, the country's oldest continuously operating textile mill, officials say.

While other area textile companies have continued to operate, many have downsized considerably. Crystal Lake Manufacturing in Autaugaville, a broom and mops textile industry, employs just more than 100 workers, about half the number it employed five years ago, Autaugaville Mayor Curtis Jackson said.

Moreover, Pearson Industries, a rope and twine maker in Autauga County, has cut about 42 percent of its work force since 2000, when it employed 70 people. Officials say the company has rebounded somewhat since Sept. 11, 2001, but they fear CAFTA will put more pressure on their business.

Ironically, NAFTA has allowed the company to tap into another market, selling pet toys made of rope in Mexico, said W.R. Pearson, the company's sales manager.

"You'll get a different story depending on who you ask about the effects of NAFTA. Our CEO says it's been a punch in the gut, but I've seen its benefits," Pearson said. "If CAFTA comes along, that's another story. It would take advantage of pitiful working conditions in foreign countries."

Pearson said the company doesn't support either agreement.

Economists say CAFTA would have little effect on American industry, and like NAFTA would help curb inflation and keep textile prices low. The legislation would cut or eliminate tariffs with Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and the Dominic Republican, countries too small to greatly impact American industry.

"Its effects really are going to be minimal," said John Hill, a professor of international business at the University of Alabama.

Hill said NAFTA has been blamed for more damage than it actually did. He said what has been much worse for the textile industry is a multi-fibers agreement that took affect in January. The multi-fibers agreement marks the end of most quotas on textile imports and NAFTA's 10-year anniversary.

He said the biggest fear among agriculture producers is CAFTA will snowball, opening up enough free trade to annihilate the American textile industry.

Mona Mills has seen that happen on a smaller scale in Tallassee with the closing of Mount Vernon Mills.

"It's the end of an era. The town was built around that mill," said Mills, whose father worked at the mill for 10 years. "(NAFTA) may help drop the price of goods, but I'm not sure that compares to the loss of salaries and jobs."

Since NAFTA, textile products have been the cheapest they've been in decades, a great benefit to the American consumer, free trade advocates say. And while almost 1 million jobs have been lost as a result of NAFTA, other jobs have been created in the export sector.

"The consumer has benefited tremendously from NAFTA, and it's a plus for the economy," said Phil Gregorowicz, head of the economics department at Auburn University Montgomery. "But we should be cautious about the effects it has on those industries that don't immediately benefit."

He said the federal government, knowing the effects NAFTA would have on the American textile industry, passed legislation allowing unemployed textile workers to receive federal funding for training in a more high-tech field. The theory behind NAFTA, he said, was to give American textile industries the time to become more efficient.

He said free trade is an economic shot in the arm for more high-tech American companies.

"People think we're not a manufacturing economy, but we manufacture more than we ever have, but because of technology, we need fewer and fewer people to do it," he said. "The real competitive advantage would be in those service areas: finance, banking, insurance, software, law, architecture..."

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Source: Montgomery Advertiser

He said the federal government, knowing the effects NAFTA would have on the American textile industry, passed legislation allowing unemployed textile workers to receive federal funding for training in a more high-tech field. The theory behind NAFTA, he said, was to give American textile industries the time to become more efficient.

That theory didn’t work, now you have former textile workers who have high tech educations working for fast food restaurants.

"People think we're not a manufacturing economy, but we manufacture more than we ever have, but because of technology, we need fewer and fewer people to do it," he said. "The real competitive advantage would be in those service areas: finance, banking, insurance, software, law, architecture..."

And many of those jobs are being moved overseas or given to people with special work visas who will do the jobs for less.