Part 1: NAFTA is Fraud on Steroids

This is a prelude to the blog. Please take this into consideration when reading through the postings.

The use of steroids creates a formidable being that is unnatural and distorted. All accomplishments are false and misleading. Likewise, the U.S. multinational companies that partake in NAFTA become dominant, unnatural and distorted and their results are false and misleading. Once outside the confines of the United States, the U.S. companies enter the world of corruption, influence peddling, power brokerage and fear mongering.

The list of the injured encompasses the gamut of the citizenry of the United States and Mexico.

The list of the injured is astounding; the hapless Americans transferred to work in Mexico, The Government of Mexico, The Government of the United States, The stockholders of the U.S. companies, the citizenry of Mexico and the citizenry of the United States.

The hapless Americans that are transferred to work in Mexico are usually a core of employees that have survived a massive layoff because their jobs were exported to Mexico. The U.S. companies secure Mexican work permits for their American employees all the while telling them they will remain on the U.S. payroll and be subject to U.S. labor and tax laws while working in Mexico.

They’re told the only exemption is a personal service tax levied by the Mexican Government. They’re told not to fear because the IRS grants a foreign tax credit on their U.S. income taxes. If they question the incongruities of working in Mexico under U.S. law, they’re usually told NAFTA makes it legal. At no time during this process are the Americans advised by the U.S. companies of the American workers rights under The Mexican Constitution and Labor Law.

When any company incorporates in Mexico, it must by Mexican Law sign a covenant known as the “Calvo Clause.” A “Calvo Clause” is unique to most Latin American countries and requires a foreign investor to agree to comport themselves as a citizen of Mexico. They agree to abide by all of its laws and be subject to the Mexican courts if a legal dispute arises. They further agree not to seek the protection of any branch of the government of their resident country. They’re told that failure to adhere to the covenant can result in a forfeiture of all of the investments in Mexico. Few, if any shareholders are ever told of this stipulation.

Mexican Law requires that before an employer puts an employee to work, the employee must be apprised of their rights, guarantees, wages, benefits and perquisites as provided for under the Mexican Constitution and Labor Law. In general U.S. companies do not tell the Americans who will work in Mexico that they are subject while in Mexican territory to the protections and guarantees of the Mexican Constitution and Labor Law.

Nor are they told they qualify for the numerous lucrative Mexican mandated benefits and perks, such as double and triple overtime, seventh day pay, 15 days Christmas bonus, 25% vacation premium, free medical services, free child care services and 10% of the profits declared by their employer. These are some but not all of the benefits and perks found in Mexico.

Some Americans, like myself are becoming aware of their civil and labor rights under Mexican Law. Most have initiated legal actions to recoup monies improperly withheld from their paychecks.

To forestall the American workers, some U.S. companies have begun circulating a document whose purpose is ostensibly to protect the American workers from being assessed additional Mexican taxes. The true nature of the document is to frighten the American workers into believing they are the ones who owe added taxes. The document fails to say that added taxes would only result if withheld wages and benefits were to be paid to the American workers.

Moreover, the document menaces the American workers with a vow to file an action in a Superior Court if and when the American workers pursue their civil and labor rights in Mexico. The document fails to disclose that the Labor Commissioner for their U.S. state of residence is the sole party empowered to adjudicate labor, wage and hours issues. The Labor Commissioner cannot rule on labor issues that arise outside the state.

Some Americans working in Mexico have bucked the system and sought redress through the Mexican courts. Nearly all have won, but because the victories can only be to the victor, the rest of the Americans suffer. To receive their due compensation, the other Americans must also seek redress through the Mexican court system.

Subsequent postings will reveal in detail the full implecations to the citizenry of the United States, Canada and Mexico of the actions of the rapacious corporations and scofflaw executives.