December 28, 2007

NAFTA at Fourteen: Historic Showdown Looms

As the 14th anniversary of the North American Free Trade Agreement (NAFTA) fast approaches, rural opponents of the trinational pact are stepping up their mobilizations on both sides of the US-Mexico border. Mexican farm groups and their supporters are gearing up for border-wide actions on January 1, 2008 to protest the final elimination of tariffs on corn, bean, sugar and powdered milk.

This month, adherents of the “No Corn, No Country” campaign, a movement which has drawn the support of hundreds of rural and urban organizations across Mexico, kicked off the latest in a series of planned actions with a Mexico City hunger strike that attracted the support of artists and intellectuals. In a country where maize is part and parcel of a long indigenous history, the specter of foreign corn overwhelming local producers and markets is stirring nationalist sentiments.

“For Mexico, corn and beans are not just food, but they are also part of its history and culture,” said nationally-known cartoonist Jose Hernandez. “With the total opening of Mexico to importations, the destruction of the natural patrimony and culture of our country is being permitted.”

Still No Level Playing Field

NAFTA’s opponents contend Mexico cannot fairly compete with the United States and Canada in the production of basic grains. Recognizing asymmetries between the nations, the trade pact’s negotiators allowed a 15-year phase-in for the complete elimination of tariffs on agricultural products. As the tariff tear-down date draws near, the structural inequalities that existed in 1994 are still pronounced today.

Cited in a US press story, the Mexican Institute of Competition reports that Mexican corn farms yield 6 tons per acre compared with the US average yield of 22 tons per acre. Other press accounts report that US subsidies for corn growers average $20,000 per farmer, while Mexican subsidies amount to about $770 per grower. Currently, Mexico produces between 19-21 million tons of corn annually, a sum dwarfed by the US yearly production total of 300 million tons.

Registering a production deficit, Mexico has grown increasingly dependent on corn imports from the US since the advent of Nafta in 1994. Annual corn imports of 10 million tons account for nearly one-third of the country’s corn consumption. In dollar terms, the value of basic grain imports leaped from $778 million in 1992 to almost $2.5 billion in 2006, according to Daniel Villafuerte Solis, a researcher with the Center for Advanced Studies of Mexico and Central America (Cesmeca).

NAFTA’s proponents argued that liberalized trade would benefit consumers through lower prices, but the promise has yet to materialize in Mexico’s corn tortilla market. According to a recent story in the Mexico-based Cimac news service, tortilla prices have shot up 738 percent since 1994. With international corn prices going up in the wake of the ethanol biofuel boom, Mexican corn consumers are likely faced with further price increases.

The tortilla price pinch continues as Mexican consumers close out 2007, the first year of the Calderon administration, paying 35 percent more for the basic basket of goods than they did in 2006. Manufacturing wages have risen only 4.5 percent in the same time period, according to the Attorney General for Consumer Protection and the Bank of Mexico.

Anti-NAFTA activists charge the trade pact has resulted in the loss of between 1.8 million and 3 million farm jobs during the last 14 years. Mexican Congressman Hector Padilla, the president of the agriculture commission in the Chamber of Deputies, said the rural hemorrhaging was even worse if statistics from 1991 are taken into account. According to Padilla, the number of people employed in the countryside plummeted from 9.9 million in 1991 to 4.9 million in 2006. As is widely documented, many of the displaced campesinos emigrated to the United States.

“According to the World Bank, the results of NAFTA’s application in the agricultural sector have been disappointing,” Padilla said. “We have a countryside in regression, economically stagnated…”

In a snapshot of many rural communities, researcher Villafuerte studied the recent history of Frailesca, Chiapas, an area once known as the “breadbasket” of the southern state. According to Villafuerte, farm production fell from 169,000 hectares in 1983 to 88,000 in 2005. Like many other analysts, Villafuerte predicts the rural problem will only worsen after the full implementation of NAFTA next month.

Don’t Blame NAFTA

Other researchers challenge contentions that Nafta is the cause of Mexico’s deepening farm crisis on NAFTA. A 2005 study by Braulio Serna of the Economic Commission for Latin America and the Caribbean (ECLAC) concluded that NAFTA had little impact on Mexico’s countryside. Instead of free trade, Serna cited other factors for the rural crisis, including government policies, low international commodity prices, backward farming methods, climatic conditions, and global and national economic crises.

Concurring with the ECLAC report, Marcos Ramos, an agricultural researcher with the National Autonomous University of Mexico, said blaming NAFTA for rural economic failures was an “overly simplistic view.” Mexico City economist Luis de la Calle, who participated in the original NAFTA negotiations, said recently that the January 1 opening should have little jolting effect on a market which has gradually opened over the years.

Perhaps in celebration of NAFTA’s 14h birthday, the federal Mexican Radio Institute (IMER) has been running spots sponsored by the Ministry of Agriculture, Ranching and Fishing that tout Mexico’s performance in the global farm market. Featuring the voice of Mexican golf champion Lorena Ochoa, the messages stress Mexico’s “winning” roster of products capable of competing in the world market. According to a report in Inter-Press Service, less than four percent of the 31 million cultivated acres in Mexico is currently devoted to export production. The language employed in the IMER spots is reminiscent of the 2006 campaign rhetoric of presidential candidate Felipe Calderon who urged a “winning” Mexico.

Another Free Trade Showdown Looms

Among other members of Mexico‘s political class, however, criticism of NAFTA’s agricultural provisions is mounting. Politicians from the center-left PRD, Convergencia and PT parties, as well as sectors of the former ruling PRI, are increasingly calling for changes in the trade pact to protect producers of basic grains and other vulnerable products. PRD Senator Antonio Mejia Haro said the Mexican Senate’s rural development commission will conduct forums across the country in March and April next year to hear the concerns of rural producers and residents.

“We are looking at legislative actions that could result in the renegotiation of the agricultural chapter of the trade agreement,” Senator Mejia said. Concerned that reopening NAFTA’s agricultural sections for negotiation could undermine the treaty as whole, as well as send a bad signal to world financial markets, the Calderon Administration and its supporters in the center-right PAN party are balking at reviewing the farm country clauses.

At the grassroots level, US and Canadian rural advocacy organizations including the Minnesota-based Institute for Agriculture and Trade Policy and El Paso’s Border Agricultural Workers Union (UTAF) are backing the “No Corn, No Country” movement’s demands to remove basic grains and food staples from NAFTA and safeguard their production in Mexico. On January 1, 2008, the Democratic Campesino Front of Chihuahua, UTAF and other groups plan a “human wall” at the border in El Paso-Ciudad Juarez under the slogan of “No Walls for Corn, No Walls for Our People Either,”

In a December 14 letter sent to the heads of state of Mexico, Canada and the United States, scores of farm groups from the three nations appealed to the leaders to halt the imminent tear-down of NAFTA’s remaining agricultural tariffs. Until now, no public response to the appeal has been forthcoming from the governments.

Reprinted from Frontera NorteSur (FNS): on-line, U.S.-Mexico border news Center for Latin American and Border Studies New Mexico State University Las Cruces, New Mexico.

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