Plants in Mexico Draw Criticism

Some say free trade would cost more US jobs. US FOOD INDUSTRY

WORKERS here are already experiencing the benefits and problems that will likely accompany passage of a free-trade pact between the United States and Mexico.Four US-owned frozen-food factories in Irapuato operate under special laws that allow them to pay low duties on exported goods. The US factories here have created hundreds of new industrial and agricultural jobs. But critics charge that the jobs are low-paying, that several thousand American workers have lost their jobs, and that US firms are damaging the Mexican environment. US and Mexican trade representatives are currently negotiating the free-trade pact, which would eliminate most tariffs between the two countries. The treaty must then be approved by legislatures in both countries. Irapuato is located about 200 miles northwest of Mexico City in Guanajuato state. One dusty street here sports factories owned by Green Giant, Del Monte, Simplot, and Birdseye. They operate as maquiladoras, plants that pay tariffs only on value added to products imported from the US. The US companies import seed, fertilizer and packaging material - and ship the frozen broccoli and cauliflower back over the border. Green Giant pays its workers $4.30 a day, just above the legal minimum wage. Irapuato union organizer Antonio Mosqueda says other factories in the area pay much higher.

Wages don't meet expenses "In Irapuato a worker with a wife and three children must earn $19 a day just to survive," Mr. Mosqueda says. As a result, most spouses and children of frozen-food plant employees must also work. He concedes that working conditions are somewhat better at Green Giant than at some Mexican-owned factories. And the workers are grateful to have any jobs, he notes. "Before they had nothing, now they at least have this." Still, he criticizes the plants for paying low wages, not allowing unionization, and for damaging Irapuato's environment. He says Green Giant is depleting the area's fresh well-water at a time when many in Irapuato drink and irrigate with polluted water. "If the free-trade pact passes, many other cities in Mexico will become like this one. The rich will get richer, but the poor will get very much poorer," Mosqueda says. Green Giant management in Irapuato and the US declined to be interviewed. However, Mike McCully, Green Giant's manager of agricultural investigation, conceded to the San Jose Mercury News that the company "is pumping out more water than is being replaced" in Irapuato. The company is planning to build a recycling system to save water.

US plants shut down The problems in Irapuato are also felt in Watsonville, Calif., once known as the frozen-food capital of the US. Should the US-Mexico free-trade pact pass, residents of Watsonville fear many more jobs will migrate to Mexico. Watsonville sits in a rich agricultural valley about 100 miles south of San Francisco. Since 1979 Watsonville has lost over 2,000 frozen food jobs due to plant shut-downs. Last year Simplot closed two northern California plants and Green Giant is in the process of closing another, shifting at least some production to Irapuato. Today 40 percent of the frozen vegetables sold in the US come from Mexico. Oscar Rios, vice mayor of Watsonville, says Green Giant workers in Watsonville were earning $7.60 an hour; Irapuato workers earn $4.30 a day. "The difference is pure profit for Green Giant," Mr. Rios says. "There's almost no work in this area's frozen-food plants, in large part because of the cheaper product from Mexico." To protest the plant closing, former Green Giant workers in Watsonville have organized a boycott of that company's products, hoping to gain better severance and retraining benefits. Rios says that if the free-trade pact passes, it will only accelerate the loss of American jobs to Mexico. Fernando Ysita Septien, a Mexico City businessman and consultant to US firms, acknowledges that some US workers will lose their jobs if the pact passes. "But others in export industries will gain jobs," he says. In Mexico, free trade may hurt some industries, such as textiles, but "the pact will make Mexico much more competitive in world markets," Mr. Ysita says.