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
