Mexico after NAFTA (Pax Christi Presentation Sept)

A “Word” like version of this document can be found here

(just click on the word “here” above…it should take you to the link below..)

( http://writer.zoho.com/public/jmflahiff/Mexico-after-NAFTA/script  )
   This version should be easier to read 

 

NAFTA and US-Mexico agricultural trade, emphasis on corn trade :  provision overview and reflections

Last month I gave a short provision on the pros and cons of NAFTA.

In the next 10 minutes (or less) I will focus on one provision…our corn trade with

Mexico and offer some reflections.

As I said last week…

Goal

NAFTA aims to be a continent wide custom free zone with a common approach to trade, energy, immigration, law enforcement, security.  It also envisions the opening upof most borders to the relatively free passage of goods and services.

NAFTA Short Definition

NAFTA (North American Free Trade Agreement) is a comprehensive trade agreement limited to Canada, US, and Mexico in a free trade sphere (since ‘94).

It immediately ended tariffs on some goods, on other goods tariffs were scheduled to be eliminated over a period of years.

(tariff…duties on exported goods…..a country is basically protecting its industries)

No supranational government bodies are involved (as the European Union) or any body superior to any national law.  It is similar to a treaty.  Under US law it is acongressional-executive agreement.

(Congress OK’s our entry into it…and the executive department sends representatives to NAFTA meetings to iron out details….(as Depts of labor, agriculture, commerce))

NAFTA is a900 page document, basically phasing out tariffs, quotas, and replacing country, state/provincial, city laws
     Beyond trade….NAFTA…

                   puts limits on safety/inspection of meat sold in grocery stores

                     elimination of preferences for spending your tax dollars on US made products or locally grown                    food 

NAFTA is not really a trade agreement, it is really an investment agreement

   Core provisions grant foreign investors a remarkable set of new rights and privileges that promote relocation of factories and jobs and the privatization and deregulationof essential services, as water, energy and health care..

 

NAFTA and US/Mexican agriculture

Ultimate goal of corn trade is same as agricultural trade..ultimately elimate import quotas and tariffs with no exceptions

However, the phasing out period was extended to 15 years (2003 bumper year..Mexican tariffs eliminated on US wheat, dairy, hots, pork) phase out period supposedly ended in January with Mexican tariffs on corn/dry beans

Mexican agriculture going thru phase in industrialization, as US, agriculture is playing a smaller role, fewer employees

 As income rises 1%,the GDP of agriculture rises o.6 % (how much of this goes to workers wasn’t stated)

      Follows that Mexico will see more large scale farms, factory type livestock lots, food processing (as canned/frozen meats) at expense of subsistence farmers (these food processing plants by US investors have more than doubled with NAFTA)

Our exports to Mexico have have more than doubled (3.6 billion to 7.9 billion), grains/feeds up 149%, vegetables up 267%

Mexico’s have also increased..sugars (595 percent), beverages (584 %),grains/feeds (328 % about 1/2 as much as US)

At some level there may be some truth that US agribusiness has greatly benefited from both NAFTA provisions (doing away with tariffs/quotas)

AND many of our policies that conflict with NAFTA

….We still have corn and wheat subsidies

…Relief to farmers (as floods)

…$ support for exports to developing countries

 

Mexico before NAFTA (in spirit of NAFTA)

…Import quotas…these have been converted to tariffs…tariffs have been slowly phased out

…Mexico has revised its land tenure laws…greater flexibility in owning/selling/renting land

      (peasant farmers permanently deed small plots of land, 1917 Constitution), so they

     wouldn’t be seized by creditors for example

 

Mexico after NAFTA (subsidies/transitional support..depending on viewpoint)

….subsidize/support sugar industry thru loans)

…income support to agricultural producers

…infrastructure, extension type assistance

 

Sources

US, Mexican and Canadian Farmers and Agriculture. Public Citizen (NAFTA at Ten Series). 2003.  http://www.citizen.org/documents/NAFTA_10_ag.pdf

The Mexican Economy, Agriculture and Environment. Public Citizen (NAFTA at Ten Series). 2003. http://www.citizen.org/documents/NAFTA_10_mexico.pdf

Pax Christi NAFTA overview (presented August 2008)

NAFTA overview for Pax Christi (September 14, 2008)

Short Definition

NAFTA (North American Free Trade Agreement) is a comprehensive trade agreement limited to Canada, US, and Mexico in a free trade sphere (since ‘94).

It immediately ended tariffs on some goods, on other goods tariffs were scheduled to be eliminated over a period of years.

No supranational government bodies are involved (as the European Union) or any body superior to any national law.  It is similar to a treaty.  Under US law it is a congressional-executive agreement.

Goal

NAFTA aims to be a continent wide custom free zone with a common approach to trade, energy, immigration, law enforcement, security.  It also envisions the opening up

of most borders to the relatively free passage of goods and services.

 

NAFTA’s effect on politics & economies (broadly speaking)

NAFTA is only one entity that is responsible for recent economic and political changes in the US, Mexico, and Canada. Other factors include individual country economic policies

worldwide, actions and policies of the World Bank and World Trade Organization, and global and local economic indicators (as recessions). No country or group of countries is an island!

It is unfair at times to blame NAFTA for every economic disappointment in the last 10 years. It is always challenging, if not impossible to “tease out” any one variable in any social study.

Everything is interrelated. (Related examples might be the state of our local education and health care).

 

Pro NAFTA points

• For the US, NAFTA has always been more about foreign policy than domestic economy.

                 Mexico has changed from a centralized protective economy to decentralized democratic capitalism. For example, Vincente Fox became president, endin 75 years of dominance by the PRI political party.Mexico no longer is a boom/bust economy with high inflation and debt. Mexico and Chile are the two most stable major economies in Latin America.

• In the US, NAFTA has allowed jobs to be shifted to those with better efficiency.  Manufacturing output has risen 30% since 1994.

• In the US, unemployment fell between 1993 and 2000 (6,9% to 4%)   Real wages have risen.

• NAFTA is not responsible for lost jobs. Unemployment increases are a result of the East Asia economy, recession, and increases in manufacturing productivity.

Con NAFTA points

• In Mexico, hog farming and other farming is disappearing. Farmers cannot compete with the dumping of our grains and corns.    NAFTA has ended tariffs on these products that Mexico had imposed. However, These farm products are subsidized by our government.While relatively cheap for US farmers to grow and for Mexicans to buy, Mexicans cannot afford to buy these        same products grown in Mexico. So, many farmers are crossing into our country (short and long term) to gain employment.

• NAFTA has a “hands off” policy to intellectual copyright (including patents). For example genetically engineered corn is patented. This means that when a farmer grows genetically grown corn, he or she is not allowed to use the seed to grow next year’s crop. To do so is stealing in the eyes of the law, and the farmer can be prosecuted. Furthermore, if such seed blows in from a neighboring farm and grows,  the “receiving” farmer can be prosecuted even though some would call this an act of nature or act of God (think insurance and lightening).

• NAFTA lacks common policy. Each country is still free to negotiate independently with countries inside and outside of NAFTA.

• NAFTA has only 5 members on its dispute resolution panel for arbitration purposes.  Proceedings are not public.

• NAFTA does address the free flow of products and capital (money). However, it does not address the “free flow” of people. Each country has its own immigration laws.

• NAFTA does not seem to address humane/spiritual values (see especially the first two points above).

 

Christian responses (to ponder)

Rethink personal lives

             Think about material goods, what is actually needed, what to buy, where made.  Think about life beyond cars, housing, owning land.  Think about good stewardship.

 

Consider actions

           Ask stores where they get their products, either in person or through letter writing. Express concern for the working conditions of those who grew, manufactured, or shipped the product.

            Consider buying more Fair Trade products (in which the farmer gets a larger share of the profits).  Although the annual global volume of Fair Trade products would only fill one very large supermarket, it is a start However, consider that not buying from companies or stores with goods from “sweat shops” may be hurting the workers. Due to conditions where they live, it may be the only work possible without emigrating. (Think those who work in the flower industry under poor conditions in countries as Colombia).

 

Consider prayer

         Perhaps incorporating actions and rethinking personal lives into a vow of nonviolence

         Pray to make wise purchasing decisions

         Pray that for better listening skills, especially to those living under different economic, social, and political situations.

 

Closing thought

God gives us all we need (materially, spiritually, etc).  However, these gifts very often are through others (God’s instruments). So, for lack of a better word, it behooves us to listen and be grateful for the words, works, and deeds of others. I am thinking of a student from my Peace Corps days in Liberia, West Africa. He asked me if Americans would be interested if he came to the US and taught Mano. Maybe he was voicing something larger, Americans came over to teach, they also had much to offer us.

Sources

The North American Free Trade Agreement. (Headline Series- Foreign Policy Association) George Grayson. 1993

Free Trade (The Reference Shelf). Lynn Messina. 1995

US, Mexican and Canadian Farmers and Agriculture. Public Citizen (NAFTA at Ten Series). 2003.   http://www.citizen.org/documents/NAFTA_10_ag.pdf

The Mexican Economy, Agriculture and Environment. Public Citizen (NAFTA at Ten Series). 2003.  http://www.citizen.org/documents/NAFTA_10_mexico.pdf

Pax Christi – Hunger (10/12/09)

Hello all,

 

Below is a copy of my presentation “outline”.

If you would like to see this as a “Word – like” document, 
    go to

      http://writer.zoho.com/public/jmflahiff/Pax-Christi—Hunger-(10-12-09) 

 

Any questions (including any challenges accessing the above), just let me know.

 

Peace Be With Us!

 

Janice 

jmflahiff@yahoo.com

 

 

 

 

Relationship between Free Trade, Current Food Policy and World Hunger (along with a few talking points for our representatives)

 

This presentation will focus on

(1) Current hunger crisis overview

(2) Factors affecting this crisis, as demand, fuel costs, biofuels, govt agricultural policies, free trade, IMF policies, agribusiness

(3) Talking points for our representatives

(4) Personal level options

 

 

 

(1) Current hunger crisis affects more than 900 million (of 6.5 billion) people (about 1 of 7). This is happening despite (in at least

recent years) that food production is believed to be adequate for the world’s people.  It is not only straining budgets of families

worldwide, but of the assistance programs.  The average family meal in El Salvador has 40 percent fewer calories now than

in May 2006. The cost of providing a meal to a child in Kenya has almost doubled (9 cents to 16 cents).

Many hungry people live in countries that cannot produce enough food, must import it (lack of arable land in their country, drought, do not own enough land.

 

(2) Prices have gone up due to many factors (am going to focus those under human control)

 

Fuel costs/biofuels
         Oil prices have risen rapidly in recent years, driving up agriculture prices, esp those dependent on petroleum (everything from                                        fertilizers, pesticides, gasoline for transportation, )
         Biofuels ..food products (for humans/livestock) are increasingly being used for fuel

 

        ”The price of grain is now directly tied to the price of oil” …Lester Brown, pres of Earth Policy Institute

          for example this year, 1/4 of US corn crop will e sent to ethanol plants…so chickens eat corn…price of eggs go up

          More corn planted, less soybeans planted, fewer acres left fallow

          Biofuels are renewable,and may be affordable in future, presently this is affecting choices in what to plant, food prices, and                                   world hunger

         Rising demand for nonlocal & “grain dense” food

 

 Growing demand for food in developing world (as China, India), with their higher incomes they are for the first time enjoying more                      diverse diets

 This includes rising demand for meat (and grain to feed livestock…ties in with biofuels)

 

        Government agricultural policy (individual countries)

 

 Subsidies (US Japan, EU) applied to one crop directly affect that crop’s production in another country that doesn’t have                                          subsidies…and can affect hunger

       Example….because of govt subsidies, AZ grows cotton where water is scarce (cotton requires a lot of water), this is at                                           expense of farmers in countries as Mali, who then can’t sell their product at a price to feed their family

 

Prohibition or restrictions on exports

          Presently applies to wheat (Russia, Ukraine, Argentina)…and rice (China, Indonesia, India)

              Keep in mind that about 70% of so called developing countries are net importers of food…

                  Upshot is a country as Bangladesh cannot buy rice because prices are so high 

 

        Free trade

     Under agreements as NAFTA, import quotas have been reduced or abolished, and tariffs increasingly dismantled

      (Keep in mind import quotas/tariffs meant to protect local production (as food) from cheaper imports)

      (Case in point, Mexico and corn..at the surface…seems helpful if their is a shortage, but it is at expense of local production

      jobs, improving local production in long run)

 

     Introduction of global agribusiness – Free trade agreements open up lands and markets to outside corporations which

        can…for example…plant high value crops for Western supermarkets (think ..perhaps Chilean grapes, gourmet foods)

       at expense of foods part of native’s diet, what they can afford

 

World Bank and IMF Monetary Fund (since 70’s, increasingly since 80’s)

Structural adjustment policies , set of policies imposed on national governments as condition for receiving loans…

basically these are long term policy changes so a country can resume growth…as market liberalization (esp opening

up to international trade), privatization of state run enterprises…end aid, credits, and advice to small farmers…reduce/

eliminate government market intervention (price fixing)….

Belief is if these countries are more like those of the North, economy will improve ( not the same conditions!)

Instead…argued…made it easier for multinational corporations to go in, easier for richer countries and multinationals

to extract goods at cheap prices and export cheap foodstuffs and other products…

 

Agribusiness 

(Corporations outside the so called developing countries..as ADM [anyone watch NewsHour?), Cargill, Nestle)

 

A few large companies dominate world's food system, large share of international markets for grains,

fertilizers, pesticides, and seeds

 

Agricultural commodities  are pretty much a monopoly,they are making record profits

    Cargill's went up 86% in quarter ending Feb 2008  (it controls 25% of US wheat exports, operates in 66 countries)

                      2004, settled suit of price fixing in corn sweetener market, 

     ADM- also operates in corn sweetener market, owns shipping/trucking subsidiaries as well as mills/storage facilities

                          worldwide 1993 found guilty of price fixing , fined $100 million by US govt, 2002 & '03 find for massively violating                                 environmental  air quality laws   (just cost of business???, )

       Remember, the very poor peform most farm work, whether on their own plots or in agro-industrial farms...their low labor cost

                     making it possible for us to eat well, (too well), while their educational, social, and political opportunities are minimal

                     Not only is modern agribusines dependent on cheap labor, but also cheap energy, water, soil overuse (fertilizer                                                     dependence)

 

     Food processing is also in hands of fewer and fewer large corporations (as Nestle), 

 

 

(3) Talking points/policy rethink

 

Energy conservation

Lately there is much private sector research and products to alternative sources of energy (solar, wind energy production,                                                        smaller cars,hybrid/electric cars).

However, not much government policy to overall energy reduction (energy use by new buildings/houses, computers [gaming                                                    takes a lot of energy], label info (how many energy units went into processing something) )

 

What role should the govt have in overall energy reduction? How much should be voluntary private sector driven? How much by

standards organizations?

 

 

Population….

  What should our govt policy be to aiding other countries in stabilizing populations

     (family planning, “spacing children”, birth control,etc)

 

Biofuels

What should be our govt policy in regards to biofuels?  Should they be encouraged?

 

Food Aid

Some say that aid for the hungry is often the dumping of surpluses by rich counries, undercutting local producers and even                                                  driving them out of business…Credits offtered to poor countries for agricultural imports can boost indebtedness and can create                                       import dependency..

How would your government policies address this?

 

 What do you think about offering agricultural extension services (both in our country and in other countries)  that are based on                                            listening to the farmer and what works best…

before offering ideas on based on our “best practices” and current research? 

 

Agribusiness

What responsibility do US based agriculture corporations have towards the farmers and others they employ directly or                                                           indirectly?

What responsibility to they have to the land and natural resources they directly or indirectly use?

Should these companies be regulated, and if so, to what degree in our countries policies, laws, as well as free trade                                                                   agreements we sign with other countries.

 

Lastly…

Should food be considered just another commodity (to be stocked privately, to be accepted as a product for speculation,                                                        hedging, etc) or is it a basic human right that should be treated differently.

 

If yes to the latter, how?

 

 

(4) Personal level options

    Think about consumption levels, how often do I need to eat meat? how much? how often?

    Think about how often I need to eat out of season food, gourmet food,processed food

    Think about if and how to incorporate more organic and/or locally grown food into my diet

    Think about buying more quality goods in which worker gets fair wage/price

    Think about “chatting people up” about these things without being preachy

        (St. Francis said, preach…use words if you must)

 

 

 

References

 

Sources

A New Era of World Hunger? The Global Food Crisis Analyzed (Global Policy Forum. Briefing paper)
James Paul and Katarina Wahlberg. July 2008. http://reliefweb.int/rw/lib.nsf/db900SID/PANA-7HRDHY?OpenDocument

Making a Killing from Hunger. We Need to Overturn Food Policy,Now!
 Grain. April 2008.  http://www.grain.org/nfg/?id=565

Responding to the Global Hunger Crisis.
Michael Learner. (Bread for the World Background Paper). June 2008. www.bread.org/learn/background-papers/2008/june-08-background-paper. pdf 

FAO: More Free Trade, More Hunger.
Esther Vivas. 2006. http://www.monthlyreview.org/mrzine/vivas200608p.html 

 

 

 

 

Pax Christi – Hunger presentation (Oct 12, 2009)

Here’s the link to the somewhat detailed outline of my talk

(Click on the link below, it should bring up the document)

http://writer.zoho.com/public/jmflahiff/Pax-Christi–Hunger-(10-12-09)

 

Any difficulties or challenges, please contact me!
I can send a copy of the document (don’t have Word at home, it’s something similar, and
hopefully compatible with your computer)