Most Rev. Anthony M. Pilla, D.D.
Catholic Bishop of Cleveland
United States Trade Representative's
North American Free Trade Agreement
September 9, 1991
I am Anthony Pilla, Catholic Bishop of Cleveland. I am pleased to be able to participate in this hearing -- and particularly grateful that you were willing to schedule me at the eleventh hour. I welcome your initiative in conducting these hearings on the North American Free Trade Agreement (NAFTA) .. a subject of great importance to our countries and of great interest to all of us.
I am also a member of the Executive Committee of the U.S. Catholic Conference, the public policy agency of the U.S. Catholic bishops. As you know, we have already expressed our interest in the subject of this hearing; and we have held extensive conversations with our fellow bishops in Mexico on the matter as well. We were privileged to have Ambassador Hills at our joint consultation with the Mexican bishops in May of this year; and we wrote to her on June 4, 1991, expressing many of the thoughts we want to share with you today. (A copy of the letter is attached, for the record.)
Five years ago our bishops' Conference published a pastoral letter on the U.S. economy, Economic Justice for All; it was the product of more than five years of hard, careful work and listening by a committee of bishops appointed for that purpose. We began the letter with this statement: "Every perspective on economic life that is human, moral, and Christian must be shaped by three questions: what does the economy do for people? What does it do to people? And how do people participate in it?
In that document we dealt with trade, among other things. We acknowledged its central place in economic life; and we recognized that although there is no theology of trade .. no Ten Commandments of trade .. the three questions we raised nonetheless apply. Market forces must be guided by moral choice. Trade, too, must have a human face. Like other economic activities, trade involves human actions and human decisions, and therefore moral judgment.
Without trying to provide specific do's and don'ts for trade, we nevertheless said in our pastoral letter that the basic questions are: Who benefits from the particular policy measure? How can any benefit or adverse impact be equitably shared? We could apply this test both to the impact of trade on U.S. workers and to how the other trading partners especially the developing countries fare in overall trade relationships.
With the prospect of NAFTA we now have a specific example of a trade relationship which is in the process of negotiation and whose content can be affected by the public debate. We also have the benefit of the views of our fellow bishops in Mexico, as well as the experience of the U.S.-Canada free trade agreement that has now been in effect for two years.
As bishops, as pastors and teachers, we see this possible trade agreement not simply as a new economic arrangement or a controversial political issue, but as a question involving serious moral dimensions and many human consequences. We believe that the economic choices of our two nations including the negotiation of this treaty should be guided by a priority concern for the poor in both lands and by a firm commitment to the dignity of work and the rights of workers. These principles are grounded in traditional Catholic teaching on economic justice and have marked our approach to this treaty.
Our study and discussion since we wrote to Ambassador Hills have confirmed and strengthened our conviction that the views we outlined in that letter some of which parallel those that have also been expressed and advocated by other individuals and groups are critical to the working out of a trade agreement that will maintain the dignity of work, the rights of workers, and the welfare of the poor in both countries. We believe that these important human needs go beyond the logic of the market.
In our letter to Ambassador Hills we listed several goals which we feel should guide negotiators on both sides. In our view, the agreement should:
- enhance the life and dignity of our two peoples overcome economic injustice, reduce economic disparities, and build bridges of commerce, and sustainable, economic development between the United States and Mexico;
- offer decent work for just wages and in decent working conditions;
- address the serious problems of unemployment and underemployment in both countries;
- stabilize the immigration flow by discouraging illegal immigration and offering more employment opportunities at home;
- respect the rights of workers, including the right to organize in order to exercise those rights.
As we wrote to Ambassador Hills, we think that the increasing economic integration of the United States, Mexico, and Canada holds potential benefits for the people of all three countries. We simply want to ensure that the agreement achieves that potential through economic choices that improve the living standards of the people involved.
As we have pointed out, we are particularly concerned about the possible .. some say probable .. loss of jobs here, as U.S. firms seek to reduce costs by shifting operations to Mexico to take advantage of lower wages; the average Mexican worker earns about one tenth what the U.S. worker makes for a comparable job. It is essential that planning begin now to arrest the decline in real wages (in both countries) and to help workers and families in this country cope with the emotional and financial strains of possible job loss. We need better programs of training, income replacement, and adjustment assistance.
NAFTA will inevitably have at least as much impact on investment as on trade. In this regard, we said in Economic Justice for All, We need to examine...the extent to which the success in the U.S. market of certain imports is derived from exploitative labor conditions in the exporting country, conditions that in some cases have attracted the investment in the first place. The availability of cheap labor is a tremendous temptation to a firm seeking to maximize profit, and it hurts workers in both countries.
We have also called attention to some environmental questions that we feel need to be addressed. We are aware that Mexico has modeled many of its environmental laws on those of the United States and that President Bush reported to the Congress on some dramatic instances of Mexican enforcement of these laws. Nevertheless, we are uneasy about the environmental aspects of economic relations between the United States and Mexico. The wind blows polluted air across the borders, and rivers carry polluted water in both directions. There has been, for example, a mass exodus of furniture manufacturers from California to Tijuana to avoid pollution controls, and last week's GATT decision in Mexico's favor against the United States on the tuna issue is not encouraging from an environmental point of view.
Another area of particular interest to our Conference and to our fellow bishops in Mexico is the impact of the future agreement on immigration. It seems clear that the lack of economic opportunity because of the stagnant development of the past decade has driven many Mexicans across the border into the United States. A new trade agreement if its benefits in Mexico include greater respect for workers and their rights, greater educational opportunities, better health care, clean water and improved sanitation, and increased access by the poor to adequate housingwould be a far-reaching instrument of sustainable development.
As a matter of fact, we see this agreement as involving not only trade, investment, immigration, and environmental matters, but, even more fundamentally, development itself which we equate with improvement of the quality of life of people. It must be borne in mind, however, that the United States and Mexico are at very different stages of development: Mexico, for instance has an agricultural system whose orientation toward export leaves large segments of the population undernourished; Mexico owes a crushing $100 billion to foreign creditors, many of them in the United States; unemployment is high, and wages are low; and the availability of education and health care is spotty. Mexico, moreover, is already in danger of increasing its dependency on the United States. We must make sure that in a trade agreement that will inevitably have some bearing on all of these conditions the poor are not further disadvantaged.
Finally, experience thus far with the U.S. Canada agreement of 1988 clearly indicates the absolute necessity of some mechanism to monitor the agreement and resolve disputes. Because of the similarity of the Canadian and U.S. economies, it has been rules of origin rather than labor rights or environmental problems that have offered the greatest difficulties. But these agreement between two nations whose economies are as different as those of Mexico and the United States.
We would urge, moreover, that any such commission or monitoring body should not be restricted to persons directly involved in trade or investment, but should include persons from all three countries, representing all major political parties in each country, as well as the general public i.e., consumers and public interest groups.
Catholic social teaching stresses the dignity and rights of the human person, created in Gods image. This principle was repeated most recently by Pope John Paul II in his encyclical letter Centesimus Annus, written to commemorate the 100th anniversary of Pope Leo XIIIs letter Rerum Novarum, which, in 1891, launched what we now call modern Catholic social teaching by supporting workers rights and limitations on private property.
In this latest letter, the Pope, after commenting on the value of the market as an economic mechanism, nevertheless warns that "there are collective and qualitative needs which cannot be satisfied by market mechanisms...There are goods which by their very nature cannot and must not be bought or sold.
For the U.S. Catholic conference, the questions that we and others are raising are matters that should be central to the negotiations on the trade agreement with Mexico .. and with other developing countries as well. If they can be integrated into the process, we have every hope that a just trade agreement can be worked out which will contribute to sustainable economic development and greater economic justice in both the United States and Mexico.
In conclusion, we ask you to resist the temptation to see this negotiation as an exercise in raw economic power, a process of sorting out winners and losers in both societies. We urge you to respond to the human face of trade .. to consider first the workers at risk and the poor with so little hope. We urge you to seek an agreement which truly has as its fundamental criterion how it touches the lives, dignity, and rights of the poor and of vulnerable workers.
This will not be an easy achievement, but it would be a huge step forward for two neighboring societies which have much to gain or lose as a result of your work. We wish you well in this important endeavor.
Thank you for this opportunity and for your attention.