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preferences [GSP), which has been effective in forcing some developing countries to respect international labor rights in exchange for "most favored nation" trading status, for NAFTA's limited coverage and convoluted procedures. The International Labor Rights Education and Research Fund and some unions filed petitions against Mexico with the U.S. Trade Representative under the GSP. The 1991 petition had been rejected; in October 1993 a second petition was denied. A witness from Public Citizen criticized the trinational commission process established in the agreement because of its indeterminate legal status, lack of public participation and very limited powers. She described NAFTA as a facilitator of U.S. investment in Mexico, with protection for capital and for intellectual property but not for worker rights or the environment.

A witness from the Heritage Foundation praised the proposed Labor Commission as a mechanism for technical assistance and useful dialog. He argued that it should not have the power to intervene in domestic labor law enforcement and maintained that Mexican laws and enforcement are far stronger than alleged by NAFTA opponents.

Rufus Yerxa, Deputy U.S. Trade Representative, appeared at the second hearing to provide the administration's position on the labor side agreement. Mr. Yerxa admitted that Mexico had a poor record of enforcement of its labor laws but lauded the side agreement as the first attempt to integrate labor policies in a trade agreement and an opportunity to "put sunshine on industrial relations problems." He said that Mexico was "obligated" to enforce workers' rights to organize and bargain collectively, even though no sanctions would result if this promise was not kept. Mr. Yerxa stated his belief that section 301 could be used to enforce worker rights. b. Benefits.-The hearings illuminated the shortcomings and cooperative potential of the labor side agreement in order to assist Members in determining their position on NAFTA.

c. Hearings.-A hearing was held on September 9, 1993, entitled "Can the Labor Side Agreement Save NAFTA?" On October 7, 1993, a hearing entitled "Labor Issues in the North American Free Trade Agreement" was held.

4. Mexican Detention of U.S. Union Members.

a. Summary. On September 21, 1993, the International Association of Machinists and Aerospace Workers [IAM] sent a busload of 38 members and an interpreter from their convention in Anaheim, CA, to tour the Tijuana maquiladora area and report back on their observations. This trip was made in the context of the union's consideration of the North American Free Trade Agreement (NAFTA). After visiting some communities, the bus stopped in Tijuana opposite a factory which the delegation later learned was the Plasticos Baja California subsidiary of Carlisle Plastics, a Boston company. They were to meet some workers who did not appear and, in the interim, began to talk to a discharged Plasticos worker who was walking by. At that point, Mexican immigration officials boarded the bus, directed it to an isolated area near the immigration office where the union members were confined without access to a telephone, and took the interpreter in a separate car to their office where he was held for several hours. The unionists were ad

vised that they were accused of illegal or "irregular" activities such as discussing working conditions and NAFTA with Mexican workers. Subsequently, in a communication to the subcommittee, the Mexican Ambassador amplified the charges to include "proselytizing" and distributing leaflets to Plasticos workers. He supplied copies of the leaflets that officials had allegedly seized from IAM members.

Upon the return of the group to Anaheim, IAM president George Kourpias wrote immediately to President Clinton, other American officials, and the Mexican Ambassador to the United States objecting to the treatment of his members and requesting an investigation and apology for the incident.

The subcommittee held a hearing within a week of the incident. Mr. Kourpias and two IAM members who had been on the Mexican trip testified under oath about their experiences. They flatly denied having discussed NAFTA or talked with any Plasticos Baja workers. They said they had distributed no leaflets, had never seen the material which the Mexican Ambassador had alleged they were handing out, and pointed out that none of the group could speak Spanish. They described in some detail the severely impoverished housing and living conditions for workers which they had observed prior to the detention incident.

Subcommittee Chairman Peterson requested the State Department to make a full investigation and to report on the role and response of the Department and the U.S. Embassy. Two weeks later, during a committee trip to Mexico in early October, U.S. Embassy personnel supported the position of six Mexican immigration agents who submitted sworn affidavits to the members stating that the IAM delegation has been demonstrating and leafleting at the Plasticos plant. State's assistant secretary for human rights took the same position at a Foreign Affairs Committee hearing several weeks later. Some time later, the Department interviewed 11 IAM members among others. In its final reply to Representative Peterson, on the basis of the Plasticos plant manager's statement and its interviews, the State Department concluded that "... the IAM group was not distributing leaflets, instigating a demonstration, or otherwise engaged in political proselytism." They found the Mexican authorities had made several errors and “. . . suggested that the Government of Mexico review its procedures to ensure that a misunderstanding, as happened in this case, not impede a bonafide dialogue between U.S. and Mexican citizens in the future."

b. Benefits. The subcommittee's hearing and request for a State Department investigation resulted in a change of the official departmental position on this incident. The submission of the presumably false statements from Mexican Government personnel pointed out some of the difficulties of operating in a nondemocratic society.

Additionally, the NAFTA labor side agreement emphasizes cooperation between Mexico and the United States to protect worker rights. The subcommittee hearing focused public attention on the serious obstacles to cross-border communication between United States and Mexican workers, which may impede enforcement of the agreement.

c. Hearings.—A hearing was held on September 29, 1993, in Washington, DC, entitled "Maquiladora Detention: Mexican Treatment of Trade Unionists."

5. Impact of the North American Free Trade Agreement on Employment and Wage Levels of U.S. Workers.

a. Summary. The subcommittee held a series of hearings on the potential impact of the North American Free Trade Agreement [NAFTA] on U.S. employment in an attempt to clarify the various job and wage projections that were bandied about during the NAFTA debate. A variety of economists had used theoretical modeling techniques to project widely ranging levels of job gains or losses that could be expected if NAFTA was approved or rejected. The U.S. Trade Representative made its own estimates that appeared to be based on arbitrary projections of trade gains and losses, but were widely quoted by administration officials.

Other controversial issues that could affect U.S. workers included: (1) Whether minority and female workers would be disproportionately affected in the NAFTA-related job losses; and (2) whether low wages in Mexico were premised on low productivity, as proponents of NAFTA argued, or whether Mexico had a deliberate low-wage, high-productivity strategy that could be very destructive of the U.S. high-wage, high-productivity labor market as opponents contended.

The subcommittee held three hearings. The first hearing reviewed the considerable limitations of the various economic modeling techniques because of their inability to include certain critical factors, such as capital movement and national unemployment levels, and the irresponsible use of these very speculative projections by both sides in the policy debate. Several businessmen testified to the problems they had competing with Mexican goods produced by low-cost labor.

The second hearing focused on the inability of Mexican workers to freely organize unions and collectively bargain to improve their standard of living. Several Mexican witnesses and other labor and human rights experts testified that Mexican unions function as an arm of the government and carry out the government's current lowwage economic policy which U.S. workers must compete with. Since 1987, the Mexican Government, business community, and official unions have operated under "el pacto," a "voluntary" agreement which sets wages, hours, and benefits for Mexican workers. Although productivity has gone up 41 percent from 1981-93, wages in 1993 were only 60 percent of those in 1981.

Independent organizing is swiftly met with mass firings, blacklisting, unilateral tearing up of union contracts by the government, violence and sometimes murder as happened at the Ford Motor plant in Cuautitlan. Requests for independent investigations of these incidents are routinely ignored. Despite this repression, Mexico has retained its "most favored nation" U.S. trade status. The Mexican witnesses also testified that it was extremely difficult for workers to obtain some of their benefits which are supposedly guaranteed by law, such as profitsharing, severance pay, and free daycare.

The capability of workers at state-of-the-art Mexican factories to produce high-quality goods at the same level of productivity as U.S. workers, but at one-seventh of the pay, was explored at the third hearing. A labor economist who has studied Mexican auto plants testified that Mexican productivity for some export-oriented industries is competitive with that of the United States. Bertha Lujan, a leader of the Mexican independent labor movement, said that the most important variables in wage levels were the government's desire to boost exports and control inflation, not worker productivity. An economist from the Hudson Institute testified that because overall Mexican wages and productivity were less than one-fourth of those in the United States and United States investment in Mexico had dropped in the past year, Mexico would not take United States jobs.

Jesse Jackson and Ralph Nader appeared before the subcommittee to discuss the impact of NAFTA on minority, female, and blue collar workers in a third hearing. These workers are generally poorer, less skilled, and in "flight-prone" industries. Both sides in the NAFTA debate agreed that the United States would lose bluecollar jobs if NAFTA was passed. African-American workers in general are disproportionately affected when blue-collar jobs are lost, particularly in textile, apparel, and auto assembly plants which are expected to be negatively affected by increased trade with Mexico. Also when innercity offices and factories are closed, entire communities are negatively affected. The ability to enforce affirmative action and set-aside programs under NAFTA was also questioned. Economist Raul Hinojosa-Ojeda argued, however, that, based on his economic modeling, he believed jobs would be created for African-Americans and Latinos if NAFTA was approved and lost if it was not.

b. Benefits. The subcommittee's work added significantly to the public debate concerning the effects of the North American Free Trade Agreement by hearing from witnesses, including several from Mexico, who had no other forum in which to appear to testify. Prior to the hearings, the media and policymakers repeated various projections without questioning the validity of the underlying research. By the time of the House vote on NAFTA, even proponents of NAFTA admitted that earlier projections of job gains had been overstated, that there would be painful U.S. job dislocations, and that some Mexican workers and plants were as fully productive as U.S. workers and facilities.

c. Hearings.-Hearings entitled "North American Free Trade Agreement: Are There Jobs for American Workers?" (May 27, 1993); "Organizing Workers in Mexico, A NAFTA Issue" (July 15, 1993); "High Skills, Low Wages-Productivity and the False Promise of NAFTA" (August 5, 1993); and "NAFTA: A Negative Impact on Blue Collar, Minority, and Female Employment?" (November 10, 1993) were held.

6. The Impact of the North American Free Trade Agreement [NAFTA] on Immigration from Mexico and Employment in the United States.

a. Summary.-One of the most common reasons given for approving NAFTA was that it would increase job opportunities in Mexico

and reduce illegal immigration of Mexicans to the United States. Currently, heavily subsidized small farms support a large portion of Mexico's impoverished population. The subcommittee's review of the new farm policies being adopted by the Mexican Government, which reduce subsidies for corn, beans, and basic grains, and encourage the accumulation of large tracts of land for agribusiness, combined with the opening of agricultural markets to more efficient United States and Canadian producers, disclosed that large numbers of rural families are expected to be displaced before the industrial and service sectors can absorb them. Moreover, the Mexican industrial sector is also restructuring and reducing its number of workers while increasing output.

Almost all economists agree that increased illegal immigration to the United States from Mexico for the next 10 to 20 years will result from passage of NAFTA and the implementation of related reforms. This will put downward pressure on unskilled rural and urban wages in both Mexico and the United States. Witnesses before the subcommittee representing Mexican rural and human rights organizations testified to the growing rural unrest in Mexico and the necessity of young men, in particular, to leave to work in the United States. A witness from the Office of Technology Assessment predicted that the internal movement in Mexico would depress wages in Mexico and have "spillover effects" in the United States. An OTA report stated that without redistribution of income from the wealthy to the poor the pressure on Mexicans to emigrate would continue, but that redistribution would take decades, not years.

b. Benefits.-Early statements by immigration experts that there would be a short-term increase in immigration from Mexico were ignored in the media and public debate over NAFTA. By the time of the House vote, the views of these experts had received more attention, although the administration had developed no plan for addressing the increased immigration.

c. Hearings.-A hearing entitled "Mexican Agricultural Policies: An Immigration Generator?" was held on October 28, 1993.

7. Welfare Hotels: A Waste of Federal Funds, Harmful to Homeless Families.

a. Summary. The subcommittee examined the wasteful spending of millions of Federal dollars to subsidize private welfare hotels used as temporary shelter for homeless families and children. The cost of a single hotel room-up to $2,400 a month-could support two to three families in their own homes. But the problem is not just a financial one. The physical conditions of many of these welfare hotels are squalid, and the living experience is psychologically damaging to many children.

This hearing highlighted the fact that despite two congressional investigations of the use of welfare hotels in 1986 and 1988, the Federal Government still subsidizes this wasteful and destructive method of providing shelter to homeless families and children. Congress in 1990 attempted to address this problem with passage of the Cranston-Gonzalez Affordable Housing Act. It required the Housing and Urban Development Department [HUD] to develop a specific strategy for eliminating welfare hotels and to publish pro