COLUMN LEFT / ALEXANDER COCKBURN : A Foretaste of Free Trade’s Real Price : An investigative report on U.S. aid to offshore job flight causes a panic in the White House.

President Bush traveled to New York last week and there, at the United Nations, took out political insurance against a scandal that could detonate the fears of many American voters about what “free trade” agreements really do for jobs and living standards.

To the surprise of the international delegates mustered in the General Assembly building, Bush launched a vigorous attack on a part of his own government, the U.S. Agency for International Development, which operates under the aegis of the State Department and whose mandate is the furnishing of technical assistance to poor nations. Bush called USAID a “weapon in the Cold War” that had outlived its function and must now be forged into an instrument fostering “mutually productive economic relationships.”

The President had a very particular reason for criticizing USAID as a creature of the Cold War past. For weeks, the State Department and White House had known about--and been deeply apprehensive about--a CBS “60 Minutes” segment that aired Sunday.

The theme of the “60 Minutes” investigation, which was aided by labor organizer Charles Kernaghan and Rep. George Brown (D-San Bernardino), was the way that U.S. agencies--primarily USAID--have, since 1980, subsidized U.S. manufacturers to move offshore and relocate in Central America, there to take advantage of a work force paid about $5 a day.

These manufacturers, with the aid of low-interest U.S. government loans, move to a country like El Salvador or Honduras, setting up in so-called “export processing zones,” of which there are now more than 200 scattered across Central America and the Caribbean. These zones are sites exempted from national laws assembling commodities such as apparel or electronic goods, most of them destined for duty-free entry into the United States.

The “60 Minutes” investigators, posing as executives of “New Age Textiles,” an apparel business hoping to to relocate from Miami to cheaper locales farther south, recorded U.S. government officials eager to help them take jobs out of the country. In Honduras, “New Age Textiles” recorded the managers of one industrial park financed by U.S. government money assuring them that any workers looking to organize a union could be fired on the spot, and their names placed on a blacklist.

Then, in El Salvador, the investigators asked one top USAID official, John Sullivan, about the threat of union labor. Sullivan responded, “There are certain names that we know that you will probably not want to hire.”

These tape-recorded words are in good measure what caused panic back in Washington. U.S. law permits duty-free licenses for certain goods manufactured offshore, so long as they are produced under conditions respectful of internationally accepted labor rights, including the freedom to organize and to bargain collectively. Similar conditions are supposed to apply to foreign beneficiaries of U.S. credits and investments.

The bottom line here is the North American Free Trade Agreement between the United States and Mexico, an issue that has been threatening to ignite throughout the campaign. Hence the White House’s attempt at damage control with the last-minute inserts in the U.N. speech.

The realities exposed in the “60 Minutes” segment fly in the face of Bush’s assertions about the benefits of the treaty and support the claims of its critics.

The Administration and its boosters reckon that after the initial loss of about 150,000 low-end U.S. manufacturing jobs, there will be a net gain of about 600,000 jobs in the United States as free trade yields its long-term benefits, including a wage and employment boom in Mexico.

The Central American model shows the reality: pure job flight, plus a relentless lowering of wage standards for Central American workers. In August, 1990, the services of a Salvadoran garment worker, “Rosa Martinez” (she’s “more than just colorful”), were being advertised in the United States for 57 cents an hour in an ad for a private-sector creation of USAID. In an ad a year later, Rosa’s hourly rate had dropped to 33 cents. Since 1982, after a decade of trade liberalization and foreign investment, Mexican wages have fallen 50% percent in real terms. Critics estimate that the treaty will, over 10 years, have a net cost of half a million U.S. jobs and will cut the yearly real income of U.S. blue-collar workers by $1,000.

The final irony is George Bush’s vision, in his U.N. speech, of what USAID should become: an agency “promoting economic partnerships among our private sectors.” This is precisely what USAID has been since 1980, as it promotes job export and hands out the blacklisted names to employers it has financed to go south.