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Article August 1, 1994

<CR><RD><BR><CS:BOLD>NAFTA JOB COST PUT AT 5,000 AND COUNTING<BR><BR>Byline: </CS>Joanna Ramey<BR><BR>WASHINGTON -- The U.S. job loss from the North American Free Trade Agreement tallies 5,225, at latest count.<BR>At least that's the number of...


NAFTA JOB COST PUT AT 5,000 AND COUNTING

Byline: Joanna Ramey

WASHINGTON — The U.S. job loss from the North American Free Trade Agreement tallies 5,225, at latest count.
At least that’s the number of workers granted federal assistance from the Labor Department’s office of NAFTA Transitional Adjustment Assistance, as of July 18. The workers lost their jobs at 62 factories that shuttered or trimmed their work force because production either moved to Mexico or Canada or competition from the two countries affected sales.
Of these, 934 workers from nine of the 17 domestic apparel and accessories companies applying for NAFTA assistance have been deemed dislocated because of North American trade.
During the same time, the office rejected requests from 73 companies.
How meaningful these figures are in terms of measuring NAFTA’s impact depends on who’s talking. NAFTA proponents say the figures show that the doomsday forecasts of massive job loss were greatly exaggerated. Opponents of the treaty, however, see it differently.
Greg Woodhead, economist with the AFL-CIO’s Task Force on Trade, said that to regard the federal assistance numbers as a barometer for NAFTA’s impact “doesn’t make any sense whatsoever.” That’s because of the bureaucracy involved in filing for such assistance, he said, and the fact that many people losing work because of plant closings or cutbacks were not direct employees of the plants involved.
He further pointed out that the figures demonstrate little of the continuing potential for job loss, as companies are pushing ahead with investment in Mexico, given the liberal investment provisions in the pact.
“These deals are being done,” said Woodhead. “The economics for job loss are still in place, including the eight-to-one wage differential [with Mexico]. It just takes time for the effect to be felt.”
Pro-NAFTA Gary Huffbauer, senior fellow for international trade at the Institute for International Economics, asserted that the federal assistance numbers were a valid measure and were coming in much lower than even the administration’s expectations. The administration used Huffbauer’s economic models for its NAFTA job loss statistics during the pact’s contentious debate in Congress.
“At this point, I would have expected 20,000 to 30,000 workers would have been awarded adjustment assistance,” Huffbauer said.
“It’s the dog that didn’t bark,” he concluded.
Among the apparel companies whose workers were granted assistance are:
The L. Grief Cos., Shippensburg and Lehigh Valley, Pa. Officials found that layoffs in the first six months of 1994 can be tied to increased imports of men’s suits, sport coats, pants and vests from Mexico and Canada.
Dee Fashions Inc., Centralia, Pa., apparel contractor for the ZumZum and Niki junior formalwear labels, closed in January 1994, following a gradual paring down of production since October 1993 as it gradually shifted to Mexico.
USA Enterprises Inc., Conyers, Ga., Bamberg, S.C., and Sparta, Tenn., contractor for men’s pants. Labor officials attributed USA’s February closing to its customers switching to Mexico contractors.
Waynesboro Apparel Inc., Waynesboro, Ga., shuttered in May, shifting its denim jeans and shorts production to its Mexican subsidiary.
Apparel companies whose workers were denied NAFTA assistance include:
Fruit of the Loom, Osceola, Ark. Labor officials attributed layoffs to the company’s consolidating its two-plant production of long-sleeve T-shirts into one domestic plant and not to shifts in production to Mexico or Canada.
Bonis Sportswear, Tampa, Fla. Officials pinned the February shuttering of the factory to the company’s shifting production to Honduras, Guatemala and El Salvador.
Kayser-Roth Corp. Workers at its former Sevierville, Tenn., legwear outlet claimed they qualify for NAFTA assistance because Kayser-Roth is now owned by the Mexican legwear company, Grupo Synkro SA. Although officials haven’t ruled on the application, only production workers are eligible for the benefits, according to terms set out by Congress. For their part, Kayser-Roth officials have said closing the company’s 29 factory outlets, resulting in the loss of 180 jobs, is part of a companywide streamlining unrelated to Grupo Synkro’s ownership.
— Fairchild News Service